The New Jersey unemployment rate for January 2009 was 7.3 percent compared to the national rate of 7.6 percent for the month.  In addition, the results of the annual adjustment process — conducted each year at this time by every state — showed that the previously announced seasonally adjusted job loss from December 2007 to December 2008 of 63,000 was revised to 85,700. Labor force estimates also were revised for 2008 and the state’s revised 2008 unemployment rate averaged 5.5 percent fluctuating in a wide range of 4.6 to 6.8 percent.

“While New Jersey continued to follow the national trend in employment losses, our unemployment rate has consistently remained below the national average,” said Labor Commissioner David J. Socolow. “Revised employment figures for 2008 indicate that the negative effects of the national recession on New Jersey's economy were greater than initial estimates showed. Based on newly benchmarked data, New Jersey employment declined by 85,700 jobs from December 2007 to December 2008.”

Most sectors of the New Jersey economy lost jobs over the December 2007 to December 2008 period except for education and health services, which added 15,500 jobs, and leisure and hospitality, which added 2,100. The largest losses were recorded in the trade, transportation and utilities (-31,000), professional and business services (-23,100), and manufacturing (-20,000) supersectors.

All of the over-the-year losses were attributable to the deteriorating U.S. economy as the national recession deepened in the second half of the year. The drop in trade, transportation and utilities was driven by the loss of over 20,000 jobs in the retail trade segment as merchants trimmed staff in response to slow consumer spending. The loss in manufacturing continued a long-term downward trend for factory jobholding in New Jersey.

The contraction in professional and business services was mainly due to job losses in the administrative support/waste management/remediation segment, resulting from steep declines in hiring at temporary employment and staffing agencies.  These jobs are typically the most at risk during economic downturns as companies shed nonessential contract workers as business slows or in an effort to reduce costs.  Other sectors that experienced substantial job losses included construction (-14,600) and financial activities (-13,100), reflective of the continuing crises in the banking, mortgage and housing markets.

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 New Jersey's population. Gains in leisure and hospitality were due to hiring in the arts, entertainment and recreation component.

Despite employment reductions at the state (-5,000) and federal (-1,600) levels, public sector employment was higher by 3,000 over the December 2007 to December 2008 period due to hiring at the local government level (+9,600).

In January 2009, employment in New Jersey contracted for the twelfth consecutive month with payrolls receding by an estimated 8,900 over the month based on seasonally adjusted data. According to preliminary estimates from the New Jersey Department of Labor and Workforce Development's monthly survey of employers, all of the loss occurred in the private sector (down by 9,300); public payrolls advanced by 400. The statewide unemployment rate moved higher in January by 0.5 percentage point to a seasonally adjusted 7.3 percent. New Jersey's unemployment rate remained below the national rate of 7.6 percent.

From December 2008 to January 2009, over-the-month employment losses were recorded in the professional and business services (-6,700), manufacturing (-4,900), financial activities (-4,800), construction (-2,900) and leisure and hospitality (-1,600) supersectors. Industry sectors that recorded notable gains included trade, transportation and utilities (+8,500) and education and health services (+2,300).

Compared with January of last year, the unadjusted workweek for manufacturing workers decreased by -0.5 hour to 41.2 hours, average hourly earnings increased  by $0.60 to $18.39 and weekly earnings increased  by $15.83 to $757.67. Over the month, the workweek decreased by -0.3 hour, hourly earnings rose by $0.02 and weekly earnings decreased by $4.69.

 Technical Notes:

Nonfarm Employment (Current Employment Statistics Survey)

Nonfarm employment estimates are developed each month from the Current Employment Statistics (CES) survey, a sample of approximately 5,500 employers in New Jersey. Previously released nonfarm employment estimates, including those for 2008, 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 through the third quarter of 2008, primarily derived from records of the unemployment insurance tax system.  The universe count of employment is derived from the records of over 276,000 New Jersey employing establishments.

Seasonally adjusted estimates also have been revised with new seasonal factors that incorporate the experience of 2008. Unadjusted nonfarm wage and salary employment data has been revised back to 2006 while seasonally adjusted data have been updated back to 2004.

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 monthly Current Population Survey (CPS), conducted as a joint effort of the US Bureau of the Census and the US Bureau of Labor Statistics. of about 1,100 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 2008. Both seasonally adjusted estimates and not seasonally adjusted labor force estimates were revised back to 2007.

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