The jobless rate in New Jersey decreased 0.7 percentage points over the month, and 2.5 percentage points over the year—the sharpest declines across all states. At 3.3%, the unemployment rate now stands below its pre-pandemic level of 3.5% in the garden state.
The biggest reason behind a sharp decline, however, is the decrease in the labor force. A whopping 17.4k people left the workforce in the last month—a huge step back in the labor force recovery. Only 61% of the state’s population is working as of September, well below its February 2020 participation rate of 61.8%.
The state is still 37k payrolls away from recovering all the jobs it lost during the first two months of the pandemic. Business demand for labor is strong, but the declining supply of workers is constraining job growth. Nevertheless, the pace of job gains in 2022 so far—14.8k new jobs added each month, on average—has been much higher than the 9k average monthly gain in 2021. Businesses are succeeding in replacing turnover and expanding, but the hiring environment in New Jersey gets ever tougher as the labor force contracts.