TRENTON—New Jersey took another step towards recovery, according to the latest jobs report. For the second month in a row, job growth in New Jersey was positive. But despite the increase, job creation has not kept up with growth of the working age population. And the level of jobs that were predicted to be created in New Jersey as a result of the federal tax cuts in 2003 is still out of reach.

These are the primary findings of an analysis of jobs data through April 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.

"This is mixed news for New Jersey when it comes to taxes," said NJPP President Jon Shure. "On one hand, federal income tax cuts that went overwhelmingly to the wealthiest people clearly have not produced the economic stimulus that supporters promised. But on the other hand New Jersey is doing better than most states, and yet opponents of Corporate Business Tax reform predicted nothing short of disaster. Moving toward making businesses pay their fair share of taxes has not hurt New Jersey's economy one bit."

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. According to this estimate, 10 months into the period since the tax break, 3.060 million jobs were predicted to be created. However, as of April 2004, only 1.043 million jobs have been created.

• According to the New Jersey Department of Labor's April employment statistics, New Jersey gained 9,100 jobs from March to April. Seasonally-adjusted non-farm data for April 2004 shows a total of 4,023,500 jobs.

• In total, 55,800 new jobs were created in New Jersey since June 2003, compared to the projected 89,600 that were supposed to occur from the federal tax cuts. This is only a 62 percent "success rate." To achieve the federal target, New Jersey would have to gain on average 13,200 jobs per month for the rest of the year, not the 9,100 seen in April.

• In April 2004, 29 months after the recession ended and recovery started, the unemployment rate in New Jersey was 5.3 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 (5.1 percent). New Jersey is one of 42 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 49 states and Washington D.C. 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.

• Only 0.7 percent of jobs, or 26,100 jobs, have been gained in New Jersey since the recession ended. In contrast, the working-age population in New Jersey has grown by 1.9 percent during this time. If job growth since the recession ended had just kept up with working-age population growth, New Jersey would have approximately 51,100 more jobs than it actually has now. New Jersey needs 11,600 jobs per month to recover the jobs lost in the recession and accommodate the working-age population growth. New Jersey is not alone in this comparison. It is one of 46 states where the working-age population growth rate has been higher than the job growth rate since the recession ended.

• Since the recession ended in November 2001 to April 2004, New Jersey has lost 40,700 manufacturing jobs, or 10.6 percent of manufacturing jobs.

For more on JobWatch, go to http://www.jobwatch.org. 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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