Focus NJ’s 2021 economic review shows NJ’s challenges emerging from pandemic
Among the key data found in the latest interactive report:
- Unemployment in New Jersey remained stubbornly high throughout the year relative to the national rate, though it fell well below the records set in 2020.
- New Jersey’s gross domestic product exceeded pre-pandemic levels in the first quarter of 2021 for the first time since the emergence of COVID-19. GDP growth was faster than the national rate in three out of four quarters, but the state’s overall annual GDP growth rate was lower than that of the United States
- The number of New Jersey workers quitting their jobs peaked in August 2021. But the state’s “quit rate” hasn’t always matched the national rate.
- The number of small businesses open in the state remained well below pre-pandemic levels, even as the economy appeared to rebound.
“This review represents an interesting snapshot of New Jersey’s economy at a time when there was still a lingering hangover from the worst of the pandemic, with some stability beginning to take shape,” the Focus executive director said. NJ, Kyle Sullender.
“That said, it’s clear that New Jersey had a bigger hill to climb in areas like employment and the number of small businesses that opened earlier this year.”
Interestingly, New Jersey’s total labor force, which includes employed workers as well as those seeking employment, peaked at 4.7 million in June 2021 – before declining to 4.63 million from July to December. .
The state’s labor force participation rate also ended 2021 at 62.6%, which was slightly lower than where it started the year (62.9%).
Unemployment in New Jersey has fallen steadily throughout 2021. In January, there were 339,496 unemployed. But by December, that number had dropped nearly 30% to 234,108 workers.
Still, New Jersey ended 2021 with an unemployment rate of 5.1%, higher than the national rate of 3.9% at the end of the year.
New Jersey also saw more workers leave their jobs in 2021 than in any previous year – although its “quit rate” peaked at 2.7% in August 2021, which was below the national peak of 3.0% in December.
Total personal income at the state level increased 41.9% from the fourth quarter of 2020 to the first quarter of 2021 – the dramatic increase closely tied to federal and state stimulus efforts in response to the pandemic.
This sharp increase, however, was not sustained as revenues fell about 17% in the second quarter of 2021 and remained relatively flat for the rest of the year in the absence of additional stimulus measures.
New Jersey’s GDP grew at an annualized quarterly rate above 7% in the first and fourth quarters of 2021. It should be noted, however, that the state’s GDP growth declined to an annual rate of 2.2% in first quarter of 2022, as announced last week. .
As of the last week of 2021, the number of small businesses open in New Jersey was 8.77% lower than in January 2020. Yet small business revenue in New Jersey was 31.5% higher than that. that they were in January 2020.
“These conclusions would seem contrary,” Sullender said. “But it suggests that many small businesses have not survived the economic shocks of the pandemic, while those that have have benefited from strong consumer demand.”
To view Focus NJ’s 2021 Economic Review, with comprehensive data and interactive charts on New Jersey’s labor force, overall employment and employment by industry, unemployment, personal and per capita income, overall GDP and by industry, consumer spending and small business open, click here.
Focus NJ acknowledges and thanks Bank of America for helping to make this research possible through its support of the Bank of America Scholars Program.
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Focus NJ – the Center for Economic Research and Workforce Solutions – is a nonpartisan, nonprofit research foundation launched by the New Jersey Business & Industry Association in February 2020. It provides in-depth analysis of public policy, industry trends and economic indicators that impact New Jersey’s overall accessibility, workforce, and competitiveness.