New Jersey’s Economic Situation Charles Steindel New Jersey Department of the Treasury November 20, 2013
Feb 25, 2016
New Jersey’s Economic Situation
Charles SteindelNew Jersey Department of the Treasury
November 20, 2013
2
Getting a Focus on the Present
• National data shows ongoing growth, but there’s still a long way to go to full recovery. – Inflation remains very low.
• State data releases delayed, as an aftereffect of the federal shutdown.– The latest job and housing permits numbers are
for August!– The available information suggests ongoing
growth.
3
The National Situation
• Employment and output are growing, but there still is a long way to go before conditions are back to normal.
• The outcome of the federal budget talks may be further near-term cuts in spending.– Better than a shutdown, but…
4
Real GDP Growth Continues
2007 - Q1
2007 - Q3
2008 - Q1
2008 - Q3
2009 - Q1
2009 - Q3
2010 - Q1
2010 - Q3
2011 - Q1
2011 - Q3
2012 - Q1
2012 - Q3
2013 - Q1
2013 - Q3
-10-8-6-4-20246
Percent change, annual rate
5
Despite Ongoing Job Growth
2010 - Jan
2010 - Apr
2010 - Jul
2010 - Oct
2011 - Jan
2011 - Apr
2011 - Jul
2011 - Oct
2012 - Jan
2012 - Apr
2012 - Jul
2012 - Oct
2013 - Jan
2013 - Apr
2013 - Jul
2013 - Oct
-200-100
0100200300400500600
Change in Nonfarm Jobs, Thousands
6
A Big Job Gap Remains
2000 - Q1
2000 - Q4
2001 - Q3
2002 - Q2
2003 - Q1
2003 - Q4
2004 - Q3
2005 - Q2
2006 - Q1
2006 - Q4
2007 - Q3
2008 - Q2
2009 - Q1
2009 - Q4
2010 - Q3
2011 - Q2
2012 - Q1
2012 - Q4
2013 - Q3
125000
129000
133000
137000
141000
145000
Nonfarm Employment 2001-2007 Trend
Thou
sand
s
7
Inflation Remains Very Subdued
2008 - Jan
2008 - May
2008 - Sep
2009 - Jan
2009 - May
2009 - Sep
2010 - Jan
2010 - May
2010 - Sep
2011 - Jan
2011 - May
2011 - Sep
2012 - Jan
2012 - May
2012 - Sep
2013 - Jan
2013 - May
2013 - Sep
-3
-2
-1
0
1
2
3
4
5
6
Overall CPI "Core" CPI (excluding food and energy)
% ch
ange
from
yea
r ago
8
Under these circumstances, the Fed continues to do all it can to support growth, while…
9
Preparing for Internal Change
10
New Jersey Conditions
• Latest hard numbers on employment and homebuilding are from August.
• Information from business surveys and other sources suggests ongoing growth.– Sandy recovery only part of the story.
11
NJ Firms See Conditions as Stable in the U.S.
Apr-11
May-11
Jun-11Jul-1
1
Aug-11Sep
-11Oct-
11
Nov-11Dec-
11Jan
-12Feb
-12
Mar-12
Apr-12
May-12
Jun-12Jul-1
2
Aug-12Sep
-12Oct-
12
Nov-12Dec-
12Jan
-13Feb
-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13Sep
-13Oct-
1380.00
85.00
90.00
95.00
100.00
105.00
110.00
115.00
120.00General Business Conditions, U.S.
12
And in New Jersey
Apr-11
May-11
Jun-11Jul-1
1
Aug-11Sep
-11Oct-
11
Nov-11Dec-
11Jan
-12Feb
-12
Mar-12
Apr-12
May-12
Jun-12Jul-1
2
Aug-12Sep
-12Oct-
12
Nov-12Dec-
12Jan
-13Feb
-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13Sep
-13Oct-
1380.00
85.00
90.00
95.00
100.00
105.00
110.00
115.00
120.00
General Business Conditions, N.J.
13
South Jersey Firms:Backing Off Giddy Spring Views, but Still Positive
on the Region
2008 - Q1
2008 - Q3
2009 - Q1
2009 - Q3
2010 - Q1
2010 - Q3
2011 - Q1
2011 - Q3
2012 - Q1
2012 - Q3
2013 - Q1
2013- Q3
-80.0
-60.0
-40.0
-20.0
0.0
20.0
General Activity in the Region
14
Philadelphia Fed’s Regional Manufacturing Index is Elevated
2008 - Jan
2008 - May
2008 - Sep
2009 - Jan
2009 - May
2009 - Sep
2010 - Jan
2010 - May
2010 - Sep
2011 - Jan
2011 - May
2011 - Sep
2012 - Jan
2012 - May
2012 - Sep
2013 - Jan
2013 - May
2013 - Sep
-50.0-40.0-30.0-20.0-10.0
0.010.020.030.040.050.0
General Activity
15
New Jersey Housing on the Rise
2008- Jan
2008 - May
2008 - Sep
2009 - Jan
2009 - May
2009 - Sep
2010 - Jan
2010 - May
2010 - Sep
2011 - Jan
2011 - May
2011 - Sep
2012 - Jan
2012 - May
2012 - Sep
2013 - Jan
2013 - May
0
5000
10000
15000
20000
25000
Housing Permits (12-month total)
16
Gains Centered Outside Shore Counties
2008 - Jan
2008 - May
2008 - Sep
2009 - Jan
2009 - May
2009 - Sep
2010 - Jan
2010 - May
2010 - Sep
2011 - Jan
2011 - May
2011 - Sep
2012 - Jan
2012 - May
2012 - Sep
2013 - Jan
2013 - May
0
4000
8000
12000
16000
20000
1000
2000
3000
4000
5000
6000
Housing Permits (12-month total)
Rest of the State (left axis)Monmouth, Ocean, Atlantic (right axis)
17
New Jersey Single-Family Home Sales Growth Outpacing the Nation
(percent change from one year ago)
2012 - Sep
2012 - Oct
2012 - Nov
2012 - Dec
2013 - Jan
2013 - Feb
2013 - Mar
2013 - Apr
2013 - May
2013 - Jun
2013 - Jul
2013 - Aug
2013-Sep
0
5
10
15
20
25
30
35
40
New Jersey U.S.
18
Auto Sales Are Also Rising
2008- Jan
2008 - May
2008 - Sep
2009 - Jan
2009 - May
2009 - Sep
2010 - Jan
2010 - May
2010 - Sep
2011 - Jan
2011 - May
2011 - Sep
2012 - Jan
2012 - May
2012 - Sep
2013 - Jan
2013 - May
2013-Sep
300000
350000
400000
450000
500000
550000
600000
New Car Sales (12-Month Total)
19
New Jersey’s Personal Income is Moving Up
2008 - Q1
2008 - Q2
2008 - Q3
2008 - Q4
2009 - Q1
2009 - Q2
2009 - Q3
2009 - Q4
2010 - Q1
2010 - Q2
2010 - Q3
2010 - Q4
2011 - Q1
2011 - Q2
2011 - Q3
2011 - Q4
2012 - Q1
2012 - Q2
2012 - Q3
2012 - Q4
2013 - Q1
2013 - Q2
420.0430.0440.0450.0460.0470.0480.0490.0500.0510.0
Billions of Dollars - Annual Rate
20
New Jersey’s Labor Force Participation and Unemployment Rates
• Our labor force participation rate is about where it was in early 2011, and is now more than 2 points above the noticeably reduced national rate.
• The drop in the national labor force participation rate has helped lower the nation’s reported unemployment rate. That factor has been much less evident in New Jersey.
21
Labor Force Participation RatesThe Gap Between New Jersey and the Nation has Widened
2011 - Jan
2011 - Mar
2011 - May
2011 - Jul
2011 - Sep
2011 - Nov
2012 - Jan
2012 - Mar
2012 - May
2012 - Jul
2012 - Sep
2012 - Nov
2013 - Jan
2013 - Mar
2013 - May
2013 - Jul
63
63.5
64
64.5
65
65.5
66
66.5
67
New Jersey US
22
Our Continuing High Participation Rate Has Held Back Declines in Our Unemployment Rate
2011 - Jan
2011 - Mar
2011 - May
2011 - Jul
2011 - Sep
2011 - Nov
2012 - Jan
2012 - Mar
2012 - May
2012 - Jul
2012 - Sep
2012 - Nov
2013 - Jan
2013 - Mar
2013 - May
2013-July
66.5
77.5
88.5
99.510
NJ Unemployment RateNJ Unemployment Rate if Participation Rate Moved Like the Nation's