TRENTON, September 17, 2008—National economic conditions continued to take a toll on New Jersey’s job market in August as employers pared payrolls and the state’s unemployment rate moved higher.

Increasing numbers of New Jerseyans entered an already tight labor market in August, driving the state’s unemployment rate up by 0.5 percentage point to a five-year high of 5.9 percent. The New Jersey rate remained below the national rate which also hit a five-year high of 6.1 percent.

According to preliminary estimates from the New Jersey Department of Labor and Workforce Development’s monthly survey of employers, nonfarm wage and salary employment in the Garden State decreased by 2,200 in August to a total of 4,066,600. The majority of the job contraction occurred in the public sector which fell by 1,500 while private sector jobholding decreased by 700. Based on more complete reporting, the previously released July estimate was revised higher by 300 to reflect a June-to-July gain of 100 jobs.

"New Jersey's employment situation was consistent with the national economic downturn, with job losses during the first eight months of this year,” said New Jersey Labor Commissioner David J. Socolow.  “Over the month, New Jersey’s private sector held relatively steady, while three-quarters of the statewide decline in employment came from a reduction of 1,700 state government jobs, largely as a result of state workers opting to accept an early retirement buy-out before the August 1, 2008 deadline,” Socolow said.

In the public sector, declining payrolls at the state (-1,700) and federal (-200) levels were partially offset by a rise in local employment (+400). Local government employment consists of county and municipal employees.

Over the first eight months of 2008, New Jersey’s employment picture has mirrored the national trend; the state’s total nonfarm employment has declined by 0.39 percent (16,000 jobs) whereas the nation’s employment dropped by 0.44 percent (605,000 jobs).

August job gains occurred in information (+700) and education and health services (+600). Advances in the telecommunications industry helped move employment higher in information while hiring in the health care and social services component (+800) was responsible for the gain in education and health services. Smaller over-the-month gains were realized in trade, transportation and utilities (+100) and construction (+100).

The majority of private sector job losses were in two industry supersectors: professional and business services (-1,000) and leisure and hospitality (-900). The decline in professional and business services was due to cutbacks in the professional, scientific and technical services component which was lower by 1,400. Leisure and hospitality employment fell for the fourth consecutive month and may be reflective of consumers pulling back on discretionary spending in light of higher prices for necessities such as food and energy. Small losses were recorded in manufacturing (-200) and financial activities (-100) over the month.

Over the month, the unadjusted workweek for manufacturing workers decreased by 0.1 hours to 41.7 hours, average hourly earnings rose by $0.05 to $17.89 and weekly earnings were up by $0.30 to $746.01. Compared with August of last year, the unadjusted workweek was up by 1.7 hours, average hourly earnings rose by $0.40 and weekly earnings were higher by $46.41.

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