TRENTON—If you’ve been reading the newspaper lately, you may be of the opinion that New Jersey is well on its way to recovery. Although the new jobs numbers are encouraging, one good month of job creation does not a recovery make. Despite the big bump in the number of jobs created in March, the federal government is still far behind in its job growth predictions when applied to New Jersey.

This is the primary finding of an analysis of jobs data through March 2004, conducted by New Jersey Policy Perspective and the Washington-based Economic Policy Institute as part of EPI’s JobWatch program to monitor employment nationwide since the latest round of federal tax cuts. For more on JobWatch, go to http://www.jobwatch.org.

"Gaining 12,900 jobs in a month is encouraging," said NJPP President Jon Shure. "The trouble is, we’d have to gain that many jobs every month through December to meet the promise of the federal tax cuts that are going disproportionately to the wealthiest people."

The federal Jobs and Growth Tax Relief Reconciliation Act was passed in May of 2003 and implemented in June. The stated mission of the tax-cut measure was to stimulate the economy and increase jobs. But the increase in jobs is far below what supporters of the act projected. Nationally, supporters of the tax cuts predicted creation of 306,000 jobs per month for the United States.

• According to the New Jersey Department of Labor’s most recent updated employment statistics, including preliminary March 2004 data, New Jersey gained 12,900 jobs in March. The unemployment rate dropped from 5.4% to 5.2%.
• In total, 44,800 new jobs were created in New Jersey since June 2003, compared to the projected 80,600 that were supposed to occur from the federal tax cuts. This is only a 56% "success rate."
• In March 2004, 28 months after the recession ended and recovery started, the unemployment rate in New Jersey was 5.2 percent. This is higher than the rate at the beginning of the recession in March 2001 (3.5 percent) and at the end of the recession in November 2001 (5.1 percent). New Jersey is one of 44 states that have higher unemployment rates than when the recession began.
• The failure has been widespread around the nation—job growth projected for the federal economic plan has fallen short in all 50 states and Washington D.C. Given the shortfall in new jobs across the country, this will make it even more difficult to meet the federal goal of 5.5 million new jobs in the United States by the end of 2004.
• Only 0.4% of jobs have been gained in New Jersey since the recession ended. In contrast, the working-age population in New Jersey has grown by 1.9% during this time. If job growth since the recession ended had just kept up with working-age population growth, New Jersey would have approximately 59,800 more jobs than it actually has now. New Jersey is not alone in this comparison. It is one of 46 states where the working-age population growth rate has been higher than the job growth rate since the recession ended.
• Since the recession ended in November 2001 to latest data collected for March 2004, New Jersey has had a decline of 10.5%, or 40,400, of its manufacturing jobs.

The JobWatch analysis takes into account differences that can be expected among states in terms of job creation. EPI uses state-by-state employment forecasts of Economy.com, a leading forecaster of regional economics. Economy.com provides employment projections for each state for the fourth quarter of 2002 to the fourth quarter of 2004. Using this data, EPI calculated each state’s share of the total employment growth and applied it to the projected 306,000-jobs-per month growth rate to calculate how much employment growth each state should experience if the federal government’s employment projects were realized. That works out to an average of 9,000 new jobs per month for New Jersey.

Economic Policy Institute’s JobWatch tracks current trends in the U.S. labor market and offers up-to-date readings on its status. New Jersey Policy Perspective is a non-profit, non-partisan organization that conducts research and analysis aimed at providing information to help inform debate in New Jersey.

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