TRENTON-The number of new jobs in New Jersey has been declining for the past two months. According to the New Jersey Department of Labor, which on March 16 released updated employment statistics including preliminary February 2004 data, New Jersey lost 1,600 jobs from January to February of this year. And the federal government is falling even further behind in its job growth predictions when applied to New Jersey.

Those are key findings of an analysis of jobs data through February 2004, conducted by New Jersey Policy Perspective and the Washington-based Economic Policy Institute as part of EPI's JobWatch program to monitor employment nationwide since the latest round of federal tax cuts. For more on JobWatch, go to http://www.jobwatch.org.

The federal Jobs and Growth Tax Relief Reconciliation Act was passed in May of 2003 and implemented in June. The stated mission of the tax-cut measure was to stimulate the economy and increase jobs. But the increase in jobs is far below what supporters of the act projected. Nationally, supporters of the tax cuts predicted creation of 306,000 jobs per month for the United States.

• Using the revised, benchmarked NJ Department of Labor statistics, through January a total of 31,400 new jobs had been created in New Jersey since June 2003. Compared to the number of jobs that the federal government predicted, 62,700, this was a 50% "success rate".
• Using the preliminary February data, 29,800 new jobs had been created in New Jersey since June 2003, compared to the projected 71,700, only a 42% "success rate". It appears that the rate of the number of jobs created to date compared to what was predicted is decreasing.
• In February 2004, 27 months after the recession ended, the unemployment rate in New Jersey was 5.4 percent. This is higher than the rate at the beginning of the recession in March 2001 (3.5 percent) and at the end of the recession in November 2001 (5.0 percent). New Jersey is one of 45 states that have higher unemployment rates than when the recession began.
• The failure has been widespread around the nation-job growth projected for the federal economic plan has fallen short in 47 of the 50 states as of January 2004. Given the shortfall in new jobs across the country, this will make it even more difficult to meet the federal goal of 5.5 million new jobs in the United States by the end of 2004.

The JobWatch analysis takes into account differences that can be expected among states in terms of job creation. EPI uses state-by-state employment forecasts of Economy.com, a leading forecaster of regional economics. Economy.com provides employment projections for each state for the fourth quarter of 2002 to the fourth quarter of 2004. Using this data, EPI calculated each state's share of the total employment growth and applied it to the projected 306,000-jobs-per month growth rate to calculate how much employment growth each state should experience if the federal government's employment projects were realized. That works out to an average of 9,000 new jobs per month for New Jersey.

Economic Policy Institute's JobWatch tracks current trends in the U.S. labor market and offers up-to-date readings on its status. New Jersey Policy Perspective is a non-profit, non-partisan organization that conducts research and analysis aimed at providing information to help inform debate in New Jersey.

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