Trenton, February 27, 2008 – Revised employment figures for 2007 show that NJ's economy produced jobs at a slower pace than originally estimated. Based on newly benchmarked data, New Jersey employers added 4,700 jobs, over the year, December 2006 to December 2007, a downward revision from the originally estimated gain.

"While the original surveys overestimated the number of jobs created in 2007, today's report shows that employment trends over the year followed the previously-reported pattern. NJ's economy added 15,300 jobs over the final eight months of 2007, after employment declined by 10,600 jobs in the first four months of the year," said Labor Commissioner David J. Socolow. "While the overall state economy experienced moderate job growth during the latter part of last year, there were significant job losses in the construction and financial sectors, due to the national downturn in the housing market and the credit crunch stemming from failures in the mortgage industry."

Previously released nonfarm employment estimates, including those for 2007, have been revised to new employment benchmarks required annually by the United States Bureau of Labor Statistics. The process re-anchors monthly sample-based survey estimates to full-universe counts of employment, primarily derived from records of the unemployment insurance tax system. As a result of the benchmark process, the estimated level of nonfarm payroll employment in NJ was revised downward by -0.6 percent. This year's revision was in line with those made in prior years. Benchmark revisions over the past ten years have averaged plus or minus 0.7 percent. Nationally, nonfarm employment estimates for 2007 were revised downward by -0.2 percent.

Seasonally adjusted estimates also have been revised to incorporate the experience of 2007. Unadjusted nonfarm wage and salary employment data has been revised back to 2005 while seasonally adjusted data have been updated back to 2003.

Labor force estimates for NJ were also revised for 2007. For the year, revised unemployment averaged 4.2 percent and fluctuated in a narrow range of 4.2 to 4.3 percent during 2007 (see technical notes.)

As a result of the annual adjustment process — conducted each year at this time by every state — the previously announced 29,400 seasonally adjusted job gain over the December 2006 to   December 2007 period has been revised downward to 4,700. The revised gain from December 2005 to December 2006 was 29,900.

The largest job gains over the December 2006 to December 2007 period were recorded in the education and health services (+11,100), professional and business services (+6,100), other services (+2,600) and information (+2,400) supersectors. The employment gain in education and health services was mainly due to payroll expansion in the health services sector. Jobs in this area have been expanding rapidly over the past several years, partly in response to changing demographics, specifically the aging of NJ's population.

Holding back job growth were losses recorded in the manufacturing (-8,400), financial activities (-7,900) and construction (-4,100) supersectors. The loss in manufacturing continues a long-term downward trend for factory jobholding in NJ. Contractions in financial activities and construction may indicate a larger NJ impact than previously estimated from pressures related to the struggling housing market and the sub-prime lending situation. 

In January 2008, employment in NJ contracted, with payrolls receding by an estimated 9,500 over the month based on seasonally adjusted data. According to preliminary estimates from the NJ Department of Labor and Workforce Development's monthly survey of employers, nearly all of the loss occurred in the private sector (down by 9,200) with  public payrolls down by 300.  The statewide unemployment rate moved higher in January, by 0.3 percentage points, to a seasonally adjusted 4.5 percent, but New Jersey's rate remained well below the national rate of 4.9 percent.

Over the month, employment losses were recorded in seven of the eleven industry supersectors. Most notable were losses in the professional and business services (-3,500) and trade transportation and utilities (-3,100) supersectors. Losses in professional and business services were registered in the administrative support, waste management/remediation services component (-3,500), while the jobs decline in trade, transportation and utilities was reflective of a greater than seasonally expected drop in retail trade employment (-1,600).

Moderate job gains were recorded over the month in education and health services (+700), information (+300) and other services (+100).

Compared with January of last year, the unadjusted workweek for manufacturing workers rose by 0.1 hour to 41.7 hours, average hourly earnings increased by $0.96 to $17.78 and weekly earnings rose by $41.72 to $741.43. Over the month, the workweek decreased by 0.5 hour, hourly earnings fell by $0.14 and weekly earnings declined by $2.98.

Technical Notes

 

Labor Force/Unemployment

Current monthly resident labor force, employment and unemployment estimates are developed using a modeling procedure based on statistical regression techniques. The procedure uses the following variables: (1) responses to the U.S. Bureau of Labor Statistics' monthly Current Population Survey (CPS) of about 1,500 households in New Jersey; (2) unemployment insurance claimant data; and (3) estimates of nonfarm wage and salary employment obtained from the New Jersey Department of Labor and Workforce Development's monthly survey of a sample of employers. In addition, the estimates use new population controls developed by the U.S. Census Bureau, and new seasonal adjustment factors which incorporate the experience of 2007.

Both seasonally adjusted estimates and not seasonally adjusted estimates were revised back to 2003. Revised sub-state estimates will be released on a flow basis between March and June 2008 and will be available on the Labor Planning and Analysis Web site.

Note: Effective with January 2008 data, monthly revisions to labor force estimates will resume.

Nonfarm Employment (Current Employment Statistics Survey)

The nonfarm employment estimates are developed each month from the CES survey sample of approximately 6,000 employers in New Jersey. The estimates have been revised to a 2007 "benchmark" or universe count of employment derived from unemployment insurance records of over 276,000 New Jersey employers. This procedure is done every year at this time. This year, revisions to the not seasonally adjusted estimates were made back to 2005. Seasonally adjusted estimates were revised back to 2003 based on the experience through 2007.

In addition, establishment survey data have been updated to the 2007 North American Industry Classification System (NAICS) from the 2002 NAICS basis. The update resulted in minor definitional changes. Published data for New Jersey industries was not affected.

 

For more information on the annual benchmarking process, please refer to the March 2007 issue of New Jersey Economic Indicators.

Press Release Tables