Jones Lang LaSalle
Fed: N.J. economy will cool
Jobless rate, slowdown in housing market cited
BY LINDA A. JOHNSON
ASSOCIATED PRESS
TRENTON -- Rising unemployment, a slowdown in the housing market and declining business for vendors could add up to an anemic economy for New Jersey in the coming months, according to the latest data from the Federal Reserve Bank of Philadelphia.
The regional bank's latest forecast for the Garden State, issued Friday, pegs economic growth through early next year at just 0.4 percent, a precipitous drop from the bank's past two forecasts of modest growth.
Economist Ted Crone, a vice president at the bank, said the drop "could be just a little blip."
"I would want to have a couple more months' data before we go out onto a limb" by predicting much slower growth, he said.
The prior two forecasts were for economic growth of 1.8 percent, then 1.4 percent, each during the subsequent nine months, but both were later revised.
The most recent forecast, for example, was cut from 2.2 percent growth to 1.4 percent, and the 0.4 percent estimate could be revised later.
The data used for the latest forecast, collected in April, include the biggest jump in the state unemployment rate in more than three years, Crone said, from a 4.5 percent rate in March to 5.1 percent in April, the highest level in two years.
Meanwhile, vendors surveyed by the bank reported getting raw materials and goods to customers quicker, a sign they had less business to handle, and the number of new-home construction permits dropped from about 2,240 in March to 1,660 in April.
Crone said the market for new and existing homes has been slowing nationwide as well as in New Jersey, with prices increasing less rapidly and the inventory of unsold homes rising.
"We don't expect a total collapse. It's just like letting a little air out" of the once-hot market, he said.
Despite New Jersey's rising unemployment rate, the number of jobs in New Jersey increased in April, to 4.075 million positions from 4.069 million in March. That comes after the state added only about 4,000 jobs from January through March.
Crone said he's unsure why so few jobs were added in the first quarter, but he said it could help explain the disconnect between April's employment and unemployment numbers, as many people are out of work for weeks before they apply for unemployment compensation.
The average hours put in by manufacturing workers dipped from 42.4 hours per week to 42.2 hours. That figure has been above 42 for about a year, which Crone said could be a sign that some employers are postponing hiring new workers by having current employees work longer hours.
The bank also reported that New Jersey's economy shrank by 0.1 percent in April but grew by a total of 2.3 percent from April 2005 to last month.
On the Net:
http://www.phil.frb.org
Fed: N.J. economy will cool
Jobless rate, slowdown in housing market cited
BY LINDA A. JOHNSON
ASSOCIATED PRESS
TRENTON -- Rising unemployment, a slowdown in the housing market and declining business for vendors could add up to an anemic economy for New Jersey in the coming months, according to the latest data from the Federal Reserve Bank of Philadelphia.
The regional bank's latest forecast for the Garden State, issued Friday, pegs economic growth through early next year at just 0.4 percent, a precipitous drop from the bank's past two forecasts of modest growth.
Economist Ted Crone, a vice president at the bank, said the drop "could be just a little blip."
"I would want to have a couple more months' data before we go out onto a limb" by predicting much slower growth, he said.
The prior two forecasts were for economic growth of 1.8 percent, then 1.4 percent, each during the subsequent nine months, but both were later revised.
The most recent forecast, for example, was cut from 2.2 percent growth to 1.4 percent, and the 0.4 percent estimate could be revised later.
The data used for the latest forecast, collected in April, include the biggest jump in the state unemployment rate in more than three years, Crone said, from a 4.5 percent rate in March to 5.1 percent in April, the highest level in two years.
Meanwhile, vendors surveyed by the bank reported getting raw materials and goods to customers quicker, a sign they had less business to handle, and the number of new-home construction permits dropped from about 2,240 in March to 1,660 in April.
Crone said the market for new and existing homes has been slowing nationwide as well as in New Jersey, with prices increasing less rapidly and the inventory of unsold homes rising.
"We don't expect a total collapse. It's just like letting a little air out" of the once-hot market, he said.
Despite New Jersey's rising unemployment rate, the number of jobs in New Jersey increased in April, to 4.075 million positions from 4.069 million in March. That comes after the state added only about 4,000 jobs from January through March.
Crone said he's unsure why so few jobs were added in the first quarter, but he said it could help explain the disconnect between April's employment and unemployment numbers, as many people are out of work for weeks before they apply for unemployment compensation.
The average hours put in by manufacturing workers dipped from 42.4 hours per week to 42.2 hours. That figure has been above 42 for about a year, which Crone said could be a sign that some employers are postponing hiring new workers by having current employees work longer hours.
The bank also reported that New Jersey's economy shrank by 0.1 percent in April but grew by a total of 2.3 percent from April 2005 to last month.
On the Net:
http://www.phil.frb.org
posted by Jones Lang LaSalle NJ News Blog at 9:36 AM
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