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Economists: NJ's prospects moderate, but losing high-tech jobs
12/1/2005, 5:07 p.m. ET
By BONNIE PFISTER The Associated Press

TRENTON, N.J. (AP) — Information released Thursday by the Federal Reserve Bank of Philadelphia suggests brighter prospects for the state's economy, even as a Rutgers University study reported an erosion of high-tech jobs.

The Garden State lost 14 percent of its technology employment from 2000 to 2004, with the number of pharmaceutical jobs shrinking here even as they swell nationally, according to a report commissioned by the state's Commission on Science and Technology.

Sometimes called the "nation's medicine chest" because of its many drug makers, New Jersey "is on its way to becoming a handbag," said Joseph Seneca, a Rutgers professor who co-authored the report.

Demand for short-term profits has prompted private industry to cut back on research, Seneca said. That has pushed R&D to university-based centers, and he said New Jersey would do well to make sustained investment there.

Seneca said acting Gov. Richard J. Codey's proposed $150 million stem-cell research center at Rutgers, the state's public university, is among initiatives that could stem the erosion of high-tech jobs.

"New Jersey has always been an innovative state from Thomas Edison on. ... It's a good location, and a high quality of work force," Seneca said. "We're calling for the state to make investment to try to grow in science and technology, where we have been leaders."

Overall, however, New Jersey's outlook for growth has improved somewhat in the past month, said Ted Crone, an economist at Philadelphia's Federal Reserve Bank.

The bank noted the already-low jobless rate declined and businesses got busier in both hours logged by manufacturing workers and delivery of goods.

The unemployment rate fell half a percentage point to 3.9 percent in October, although overall employment, still just over 4 million, declined slightly
"But that is still above (the number of jobs) in August, so we gave back some of the gains in September, but not all of them," Crone said.

The jobless rate nationally last month was 5 percent.
Less rosy, however was the increase in unemployment claims and a decline in new home building.

Housing permits declined slightly to just under 2,000 in October, while initial unemployment claims grew by 4 percent in October.

Again, that figure was still more positive than August's showing, suggesting the state's economy is growing at a normal rate.

Overall, "this is better than last month," Crone said. "Last month growth was modest. This month we're moderate. Modest is a shade lower for us."

But on the heels of such news as New Jersey-based Merck & Co.'s 7,000 job cuts globally through 2008 — including 250 right way in Rahway — no growth is likely in the pharmaceutical industry anytime soon, Crone said.