New Jersey's private-sector employers added 7,700 new jobs in May on top of a gain of 4,600 in April, providing the biggest boost to private-sector employment growth so far this year, according to information released June 13 by the NJ Department of Labor (NJDOL) in its monthly employment report.

With the creation of 12,300 private-sector jobs in April and May, New Jersey has added a modest 11,900 private-sector jobs in the first five months this year. The April-May employment spike offset a small job loss in the first quarter.

“The addition of 12,300 private sector jobs in April and May is a welcome development,” said NJBIA President Philip Kirschner. “We are hopeful that this is the beginning of a period of strong job growth.”

The bulk of the gains so far this year have come in the service sector, particularly in leisure and hospitality (3,900), education and health services (3,600) and professional and business services (2,200). Over the same period, the manufacturing sector has lost 3,100 jobs, and construction has added 900 jobs. ( See Table 1 below )

May's big gain also brought total private-sector employment in New Jersey to a record high of 3,434,000 jobs, surpassing the pre-recession peak of 3,430,000 set in December 2000. (Private-sector employment includes all jobs except government jobs.)

The State now has 4,000 more jobs in the private sector than it did before the onset of the recession. While this is a watershed development, it was a long time in coming. It has taken six and a half years for employment in the State's private sector to get even with and surpass pre-recession levels.

The NJDOL also reported that New Jersey's unemployment rate fell by one-tenth of a percentage point to 5 percent in April. This is up from the expansion low of 4.2 percent set in May 2005.

While the State's recent job gains are welcome, they come against a backdrop of weak employment growth over the last several years.

In 2005, New Jersey created 42,900 private-sector jobs, after producing only 20,200 private sector jobs in 2004. ( See Chart below ) Since it got underway in April 2003, the current expansion has produced an average of less 27,600 private sector jobs a year (on an annualized basis). This is far less than the average of more than 70,000 jobs new jobs produced annually in the expansions of the 1980s and 1990s.

The rate of job creation also has been slower in New Jersey than in the nation as a whole. New Jersey was 41st in the nation in its rate of private-sector job growth in 2004. Private-sector employment grew by 1.3 percent in New Jersey last year, below the national job-growth rate of 1.6 percent.

Most of the job growth over the last six and a half years has come in the construction trades and in certain service industries, particularly in health, education, leisure and hospitality. ( See Table 2 below )

Since December 2000, construction employment has grown by 20,500 jobs for a gain of 13.3 percent. Education and health services have added 64,400 jobs for a gain of 12.7 percent, and companies in the leisure and hospitality industries have added 39,800 jobs, an increase of 13.1 percent.

But the professional and business services sub-sector, an important engine of job growth in the 1990s, has lagged. Modest gains over the last three years and a half years have failed to offset sharp recession losses, leaving that sector still a few thousand jobs shy of its pre-recession high of more than 600,000 jobs.

Manufacturing employment has declined steadily throughout the period although losses have moderated over the last two years. The State's manufacturers now employ 320,000 people, 102,000 fewer than they employed six and a half years ago.

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