New Jersey is more than a half-year into a mild recession that should end in early 2010, according to a Rutgers University economic forecast released Wednesday.
The state will lose about 20,000 jobs beyond the 10,000 already lost this year before a recovery begins, said the semiannual report of the Rutgers Economic Advisory Service.
The report appears to be the first analysis to claim that New Jersey is in recession and describe its breadth and magnitude.
“The state’s job base has barely changed since the beginning of 2006, while employment in the U.S. continued to grow until December 2007,” said Nancy Mantell, the service’s director.
A recession is generally considered two consecutive quarters of falling gross domestic product, so confirmation occurs after a recession has started. No such measure is available for New Jersey, so the Rutgers assessment is based largely on job losses, Mantell said.
New figures Wednesday from the state Labor Department presented an even harsher picture than the Rutgers report, finding that New Jersey lost 14,100 jobs in the first half of the year.
The report comes as residents of New Jersey and the nation cope with growing unemployment, rising prices for gasoline and food, but falling prices for real estate.
“Things are going to be a little tight for a while. But compared to the national recession, we don’t think this will be as bad,” Mantell said.
Gov. Jon S. Corzine and others have said the nation has already entered a recession. The acting chief of the governor’s Office of Economic Growth, Angie McGuire, on Wednesday said the administration has taken steps to address tough conditions, including cutting spending in the state budget that took effect July 1.
From the Asbury Park Press:
New Jersey’s economy, struggling with soaring energy costs and a faltering housing market, is headed for a mild recession that will last until 2010, Rutgers University researchers said Wednesday.
The prediction of impending job losses puts off any hope of a recovery in the real estate market. Housing prices are expected to fall 12 percent to 15 percent during the next year, experts said.
“I wish the outlook were otherwise,” said Patrick J. O’Keefe, a director at J.H. Cohn, an accounting firm, and the former chief executive officer of the New Jersey Builders Association. “But the laws of gravity that govern the relationship between household income and home prices can only be suspended for so long.”
The outlook is grim. Nancy Mantell, director of the Rutgers Economic Advisory Service, said she expects the state to fall into a recession later this year that will last about nine quarters — into 2010 — and cause it to lose about 31,000 jobs.