Lately, New Jersey has been having a hard time with its economy. For the third month in a row, the state has lost more jobs.
In fact, the New Jersey Labor Department said that between July and August, the state lost 4,400 jobs.
And this follows even bigger losses between June and July, when 11,500 jobs disappeared, and another 4,200 between May and June.
These numbers show that companies have slowed down on hiring, and things aren’t looking as strong as they did a year or two ago.
Although, things were different in 2022 and 2023. The state added around 200,000 jobs as businesses rushed to fill positions after the COVID-19 pandemic.
It was when many people were changing jobs, often for better pay, and companies were offering bonuses to attract workers.
Economists say this was an unusual time and not something we usually see. Now, things are settling back down, and job growth is slowing.
Unfortunately, this might mean that a recession is on the way. Given these troubling signs, New Jersey’s unemployment rate is one of the highest in the country at 4.8%, and the state is only behind places like Washington and California.
Perhaps part of the reason for this high unemployment is the number of people living in New Jersey.
Especially now, many people are looking for work, so when companies stop hiring or start laying people off, the effects are felt quickly.
Meanwhile, the Federal Reserve recently cut interest rates by 0.5%. Though this is supposed to help businesses and consumers by lowering borrowing costs, experts don’t think we’ll see the results for about a year.
So, while the rate cut is a good sign, it won’t fix things immediately.
On a more positive note, inflation is another area where we’re seeing some improvement. It has dropped to 2.9%, the lowest it’s been in three years. In North Jersey, inflation is slightly higher at 3.7%, but that’s still an improvement.
However, just like the interest rate cut, this doesn’t mean the economy will bounce back immediately.
Despite the progress, businesses are still being careful, and hiring more workers isn’t likely to happen quickly.
Speaking of businesses, some large companies in New Jersey have made announcements about jobs and wages.
For example, companies like Target, Aldi, Bank of America, Verizon, and Burlington Stores have said they will either raise wages or hire more people for the holiday season.
A recent New Jersey Business and Industry Association survey found that 28% of businesses plan to hire more workers in 2024.
On the other hand, 7% expect to hire fewer people, and 66% think their workforce will stay the same. Thus, while some businesses are making moves, many are staying cautious.
Nonetheless, some industries in New Jersey are facing serious challenges. There have been big layoffs in areas such as finance, healthcare, and pharmaceuticals.
Last year, companies like Bed Bath & Beyond, based in Union, filed for bankruptcy and cut over 1,300 jobs in the state. At the same time, Prudential Financial, based in Newark, also laid off hundreds of workers.
Meanwhile, major pharmaceutical companies like Bristol Myers Squibb and Novartis have also let go of staff.
Moreover, the pharmaceutical and biotech industry layoffs have increased by 28% since last year.
This is due to changes in how these companies operate, like the use of new technology and shifts in drug research.
Still, one of the most troubling areas right now is healthcare. CarePoint Health, which runs three hospitals in Hudson County, announced that it might cut up to 2,600 jobs by the end of the year.
Given the current trends, this is surprising because many hospitals in New Jersey are actually growing and expanding.
Even so, CarePoint has been having financial trouble for a while now. Last year, the company even asked the state for a $130 million bailout but only got $8 million in emergency funds.
In an interesting contrast, CarePoint’s struggles are particularly striking, especially since most hospitals in New Jersey are thriving.
For example, Valley Health is building a new hospital in Paramus, and Hackensack Meridian Health is raising millions to support its growth.
CarePoint, however, has been struggling due to how it was run in the past.
Private owners bought the hospitals more than ten years ago when they were nearly bankrupt.
Over the years, the owners turned the hospitals into for-profit businesses and made some improvements, but they also charged high prices, especially for out-of-network care.
Because of these costs, CarePoint became one of the most expensive hospitals in the country. At one point, Bayonne Medical Center charged more for some procedures than any other hospital in the U.S.
Despite these problems, local leaders are stepping in to try to help. Jersey City Mayor Steve Fulop and Hoboken Mayor Ravi Bhalla have joined CarePoint’s board and are working on a plan to keep the hospitals open and avoid layoffs.
While businesses, workers, and leaders are doing their best to handle these challenges, getting New Jersey’s economy back on track will take time and effort.