Employment in the State’s private sector declined by 2,500 jobs in July, ending a hopeful run of job gains earlier in the year, according to information released today by the NJ Department of Labor (DOL) in its monthly employment report.

“The July job loss comes as a disappointment,” NJBIA Philip Kirschner said. “We had hoped that private-sector employment would continue to expand through the summer. Unfortunately, New Jersey continues to lag the nation in private-sector job growth. The state must do everything it can to improve the business climate in order to create more private-sector jobs.”

The July loss ended five months of modest gains, leaving the State with an overall increase in private-sector employment of 10,900 jobs so far this year, a gain of just three tenths of one percent.  If job growth remains stuck at this low level, 2006 would become one of the weakest non-recession years for employment growth in a quarter century.

New Jersey’s unemployment rate rose to 5.1 percent in July, up from 4.9 percent in June. The unemployment rate has been rising fitfully since hitting an expansion low of 4.2 percent in May 2005.

Most of the losses came in the manufacturing sector, which saw employment decline by 2,800 jobs in July or a total of 6,000 for the year.  The construction sector lost 600 jobs last month, leaving it with a marginal gain of only 400 jobs for the year.

Virtually all of this year’s private-sector job gains have come in the service industries, which managed a small gain of 900 jobs in July and are up by 16,400 jobs for the first seven months of the year.

With July’s job loss, total private-sector employment in New Jersey — at 3,433,000 jobs — is now only 3,000 jobs above where it was six and a half years ago before the onset of the 2001-2002 recession.