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Private sector hiring returns to pre-COVID levels

New Jersey added 9,800 jobs and its unemployment rate remained at a low 3.9% in June, the state Department of Labor and Workforce Development said Thursday, a sign that Businesses and consumers continued their robust spending despite the highest levels of inflation in 40 years.

With the latest job gains, the Labor Department noted, New Jersey has regained all 702,000 private sector jobs it lost in the first two months of the pandemic in 2020.

“Despite all the worries about inflation, the worries about consumer spending, the state’s labor market is still very, very strong,” said James W. Hughes, an economist at Rutgers University.

The monthly unemployment bulletin is made up of a survey of employers’ payroll to measure the number of jobs and a household survey to measure the unemployment rate. It’s seen as a key economic indicator, Hughes said, as employers will begin to cut hiring, or even lay off, if they see a bleak outlook.

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There are more than a few annoying signs. Among them: Russia’s invasion of Ukraine drove up oil prices; and U.S. consumer prices last month rose at the fastest pace in 40 years, continuing a trend that prompted the Federal Reserve to raise interest rates in a bid to slow the economy.

On Main Street, however, New Jersey employers are still hiring.

The Laundry Room, an Eatontown-based commercial and residential laundry service, serves Monmouth and Morris counties. And she’s been trying to hire a delivery driver for just over a month without success, said Chris Siciliano, co-owner of the business.

“Business is good, to be honest,” Siciliano said. “The business is definitely there. I can’t complain about that. Inflation has really squeezed our (profit) margins, but when it comes to real business, I really can’t complain.”

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New Jersey’s labor market, like that of the country, has recovered from COVID-19 losses faster than economists expected thanks to a huge federal stimulus and record interest rates that have boosted money in consumers’ pockets, experts said.

When the public sector is included, the Garden State has recovered through June 98% of the jobs it lost at the start of the pandemic, according to the United States

The state Department of Labor said Thursday that New Jersey ended the first half of the year with 96,000 jobs, a slightly slower pace than last year but still considered historically strong.

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Last month, New Jersey added jobs in five of nine major private sectors.

Notably, the leisure and hospitality sector added 7,600 jobs during the month. The industry, hard hit by the pandemic, has recovered around 97% of the jobs lost.

In addition, trade, transportation and utilities, which includes retailers, added 4,200 jobs; and education and health services added 3,800 jobs.

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However, financial activities lost 2,700 jobs; professional and business services lost 2,600 jobs; and the construction industry lost 2,200 jobs. And as interest rates rise, making it more expensive for consumers and businesses to borrow money, economists expect the labor market to cool.

“In my view, we just haven’t felt the effect of the rate hike yet, and the resulting recession is on its way,” said Jennifer Hunt, an economist at Rutgers University. “But I admit to being very uncertain – the strength of the latest jobs report was quite surprising. Inflation in itself is not a reason to think the labor market would be affected; rising interest rates.”

Michael L. Diamond is a business journalist who has written about the New Jersey economy and the health care industry for over 20 years. He can be contacted at [email protected]

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