May 12, 2022
(The Center Square) – The shrinking U.S. economy is a bad sign for New Jersey, given what has happened in the past, says a spokesperson for a research and education organization nonpartisan New Jersey.
“Supply disruptions hurt output, as U.S. gross domestic product shrank at an annual rate of 1.4% in the first quarter,” The Wall Street Journal reported. This is a reversal from the fourth quarter of 2021, which had an annual growth rate of 6.9%. It was the weakest quarter since the spring of 2020 with its pandemic shutdowns that plunged the economy into a deep, but short, recession.
New Jersey’s GDP grew 7.4% between the third quarter and the end of the fourth quarter of 2021, according to the Bureau of Economic Excellence.
“While we won’t see first quarter GDP numbers by state until June 30, if the past is any prologue, such a contraction in the national economy is a bad sign for New Jersey,” said William J. Smith, director of communications. and media relations for Garden State Initiative.
“The state has the seventh-largest economy in the nation and as such would be a significant contributor to the national number,” he said.
“Despite strong growth in the fourth quarter of 2021, our state’s growth rate of 4.9% is significantly below the U.S. average of 5.7%,” Smith said. “Inflation is having a big impact in New Jersey,” he added.
“In a state where the cost of living is well above the national average, inflation not seen in a generation is clearly hitting New Jersey families hard,” Smith said. “The impact is particularly acute when looking at the state’s most recent personal income figures, as the federal government reported that the overall personal income of New Jersey residents fell at an annual rate of 0. .6% in the fourth quarter of 2021.”
The decline in revenue was well below the national rate — which rose 2.4% — and ranked the state 40th in the nation.
Although incomes may have fallen, the state’s labor market has improved significantly through 2021 and into 2022, Fitch Ratings reported. The recovery in employment since April 2020 has accelerated, with 90% of jobs recovered through February 2022, matching the country’s recovery.
Fitch Ratings offered an economic update from New Jersey in its publication assigning a “BBB+” rating to $1.16 billion in school facility construction repayment bonds from the New Jersey Economic Development Authority.
“Federal pandemic assistance, high vaccination rates, state balancing actions, and tax collections that exceeded previous forecasts have kept New Jersey’s finances remarkably resilient relative to forecasts. previous ones,” Fitch said. New Jersey reported strong liquidity in 2022 and does not expect to borrow cash flow in fiscal years 2022 or 2023.
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