Rising incomes will have an “outsized” impact on NJ

From the Record:

Some optimism about the state economy, for a change

New Jersey’s economy has rarely failed to disappoint in recent years, but economist Joel Naroff thinks that may change in 2016.

He foresees a solid national performance, with economic growth of around 3 percent. And while New Jersey won’t match the nation, the state will enjoy a similar performance – unlike past years, when the state has clearly lagged, Naroff said.

“We are beginning to follow national trends again,” said Naroff, who is economic adviser to the Trenton-based New Jersey Business and Industry Association, adding that his comments reflect only his own views. “That’s good news.”

“I am positive about the direction the state’s economy is going in,” he said. “I am not saying it’s going to be strong. We are not going to have a great economy. But we had improvement in the second half of 2015, and that will carry through to 2016.”

The upbeat forecast from the economist, who heads his own consulting company, contrasts with his past laments about the state’s lackluster economic recovery.

He has worried that no industry appears to be strong enough, or with enough potential, to lift the state out of the doldrums created by the decline of such past powerhouse sectors as manufacturing and telecommunications, the downsized casino industry, the weakened financial sector and the diminished pharmaceutical industry.

Yet the state is coming into its own as a distribution, logistics and warehouse hub, and that will help, Naroff said. The rise of online shopping requires logistical excellence to get goods purchased online quickly to consumers, and the state’s ports, infrastructure and proximity to the vast metropolitan market make it well placed to benefit from the shift, he said.

Outside of that, Naroff said the economy will be helped by a rise in incomes, which will have an “outsized” impact on New Jersey, because of its dense population.

“I think the state economy accelerates in 2016, in no small part because we will finally start seeing better income gains,” he said. “And that feeds back. Income gains means greater demand. Greater demand means more hiring. More hiring means more income. And you set off this positive impact.”

This entry was posted in Economics, Employment, Housing Recovery, New Jersey Real Estate. Bookmark the permalink.

50 Responses to Rising incomes will have an “outsized” impact on NJ

  1. grim says:

    From HousingWire:

    Black Knight: Home prices keep rising, now just 5% off pre-crisis peak

    Home prices continued rising in October, marking the 42nd straight month of year-over-year home price appreciation, according to a new report from Black Knight Financial Services.

    Black Knight’s Home Price Index report for October showed that home prices rose 0.2% from September to October. Home prices in Oct. 2015 were also 5.5% higher than one year prior.

    According to Black Knight’s report, October’s national home price index of $254,000 puts national home prices up 26.9% since the bottom of the market at the start of 2012, and just 5.3% off the June 2006 peak of $268,000.

    According to Black Knight’s report, the state of New York led all states in price gains for the 4th month in a row, with a 1.1% increase. In the New York City metro area, home prices rose 1.2% in October.

    Ranking behind New York were Nevada and Utah, both of which rose 0.8% from September.

    Connecticut once again saw the most negative movement among the states in October, with home prices there falling by 0.6% month-over-month, Black Knight’s report showed.

  2. No Billionaire Left Behind (the good one) says:

    Bundy’s privilege is something to behold

  3. Libturd supporting the Canklephate says:

    And I ordered Chinese food in last night. Orange chicken and pork fried rice for lunch today. Yum!

    In other news, I think I found the leak on the return to the furnace. That silly $19 moisture detector did the trick. It’s really amazing. One could never feel the moisture, but the closet in the basement where the leak was was registering 10 times higher for moisture than the bathroom with the bathtub/shower. Everything else registered zero. Now lets pray this is the only leak.

  4. grim says:

    Must be getting cold, had the garage door open yesterday for a couple hours while cleaning it out, had a little guy try to move in.

    Dogs were going nuts all night, heard some noise in the basement and found a little flying squirrel trying to get out the door.

    At first I thought it was just a baby squirrel, but the sucker launched off the side door and glided back down into the basement, cracked the side door a bit, and went in for the pincer movement through the other side of the basement, shoo’ed him out.

    Pretty cool little guy, I got some photos as it was hanging on the door. Totally not a baby squirrel, but an honest to goodness little flying squirrel. Had no idea that those things even lived in Jersey.

    Joys of homeownership.

  5. The Great Pumpkin says:

    Thanks. Appreciate it.

    Marilyn says:
    January 4, 2016 at 4:14 am
    Here you go, If you are retired and want to preserve wealth Raleigh and this area is a nice area to do that. It has all the amenities and a much lower cost of living. If your loaded and I mean loaded retired and don’t give a crap stay in NJ, because its not NYC rich. Its not Greenwich CT rich and people don’t show off here. Its very low key rich. Now if your broke and working or getting a social program or getting crumbs off the rich stay in the North East. Now if your union, govt, or State , stay in the North East. If your mim. wage , stay in the North East. Only certain demographics I feel should come here. If you can transfer and make 50K – 120K you are damn ripe to come here and sock away some decent money. You see in a red state you can sock away money if you middle class, in a blue state you spend all you money if your middle class. Any other class your in don’t come. You wont be happy. So the key is Middle Class come, Rich, or poor stay in the Blue States!!

  6. The Great Pumpkin says:

    The pumpkin strikes again.

    “Outside of that, Naroff said the economy will be helped by a rise in incomes, which will have an “outsized” impact on New Jersey, because of its dense population.

    “I think the state economy accelerates in 2016, in no small part because we will finally start seeing better income gains,” he said. “And that feeds back. Income gains means greater demand. Greater demand means more hiring. More hiring means more income. And you set off this positive impact.””

  7. Fast Eddie says:

    Flying Squirrels? Where the f.uck do you live? ;)

  8. joyce says:

    Do you know what the difference is between something happening and a prediction?

    The Great Pumpkin says:
    January 4, 2016 at 10:44 am
    The pumpkin strikes again.

    “Outside of that, Naroff said the economy will be helped by a rise in incomes, which will have an “outsized” impact on New Jersey, because of its dense population.

    “I think the state economy accelerates in 2016, in no small part because we will finally start seeing better income gains,” he said. “And that feeds back. Income gains means greater demand. Greater demand means more hiring. More hiring means more income. And you set off this positive impact.””

  9. Ragnar says:

    Those little squirrels suck. They love attics, and can get in through tiny cracks, or gnaw their way in. After moving in to my house 5 years ago I discovered that there have been several generations of wars against them. So we hired carpenters to patch gaps, got my exterminator to set out traps for them, and gave them some tasty poison pellets to munch on. I once was woken up at 3 am when a trap caught a squirrel but unfortunately didn’t kill it, so it was spinning the screwed-down trap around noisily. So I put it out of its misery with a board. They’ve been gone for the last few years, but suspect they will try to get in there again.

  10. The Great Pumpkin says:

    Yes. Point is, economists are now bringing up the factors I was calling back in 2012. My prediction for wage inflation in 2017/18 is getting stronger by the day. It’s now becoming clear that it is not an “if” we will get wage inflation, but a “when”.

    joyce says:
    January 4, 2016 at 10:47 am
    Do you know what the difference is between something happening and a prediction?

  11. Marilyn says:

    Happy New Year Pumpkins!! And by the way, Im thinking of already another place to move in 5 years, if the market keeps crashing, maybe I will be back in some Southern Hillbillyville. You will be seeing me running after a car on Lizard Lick. HAHA!!

  12. Libturd supporting the Canklephate says:

    I predict there will be another eclipse at some point in the future.

  13. The Great Pumpkin says:

    “How come more people are retiring in their early 20s? Why are middle-age men becoming stay-at-home dads? What’s keeping women out of the workforce other than illness, kids or school?
    Those are some of the questions raised in a new Bureau of Labor Statistics report that shows changes over the past decade in why people stay out of the labor force. Finding answers is key for the Federal Reserve as it maps the contours of a job market that’s becoming harder to predict with the aging of the baby boomers and shifting household priorities.”

    http://www.bloomberg.com/news/articles/2016-01-04/yellen-s-job-puzzle-why-are-20-somethings-retiring-

  14. The Great Pumpkin says:

    The Great Pumpkin is coming. From the looks of it, it will come hard.

    “For Americans between the ages of 20 and 24, the share of those sidelined over the past decade because they were in school increased, unsurprisingly, during the decade that included the Great Recession. What’s more unusual is that the share of 20- to 24-year-olds who say they’re retired doubled from 2004 to 2014.

    Other reasons for not working are also on the rise. More men between 25 and 54 cited home responsibilities, while women of the same age range increasingly point to illness or school as the leading cause. The data also show, perhaps not surprisingly, that men and women without a high-school diploma are more than three times as likely to be out of the workforce than their peers with a college degree.
    Demographic changes aren’t the only pieces of the puzzle that have changed the employment landscape since 2004. The BLS report showed that among male veterans between 25 to 54 years old, the number who reported a service-connected disability rose to 1.2 million in 2014, from 726,000 in 2003. That rise coincides with U.S. military combat in Iraq and Afghanistan.
    Fewer people willing or able to take a job might eventually cause a shortage of workers, leading to surge in wages and longer-term inflationary pressures, according to Princeton University economist Alan Blinder, a former Fed vice chairman.

    “We’re going to be running out of labor as we go through time,” Blinder said on Bloomberg Television Dec. 31.

    Understanding why people aren’t in the workforce — and whether it’s permanent or temporary — is important for the Fed. Policy makers are trying to estimate remaining slack in the labor market and the outlook for inflation as they weigh the timing of the next interest-rate increase.””

  15. Mike says:

    5 If it’s like a regular squirrel it will return since the garage is now considered his home.
    If so set a trap or leave the car running with the garage door closed.

  16. Hughesrep says:

    2

    Y’all-Queda?

  17. Your 2012 predictions were for 2014… then in 2013 for 2015… then in 2014 for 2016…

    El Gourd-o has predicted 55% wage inflation — the only problem is we got 0.5%.

  18. Pumpkin-head’s Brain Surgeon:

    20 year-olds aren’t working (euphemistically, “retiring” — its not exactly like they’re taking in the early bird specials in Boca…) because they are better off short and long term ‘working for the state’.

    How you foresee any remarkable wage inflation given there is a some vast pool of untapped labor sitting idle defies logic.

  19. Comrade Nom Deplume, the anon-tidote says:

    Well, looks like Pumpkin’s broken clock may be coming up on the right time. Fair is fair, and if he’s right, I’ll eat whatever contralacy I directed his way in opposition (though I think I largely stayed out of it, not being an especially good macroeconomic forecaster). Though the jury is still out so I counsel against victory laps there pumps.

  20. joyce says:

    18
    Similar to all the vaunted economists (and 1 or 2 people here) saying, “Just wait until next year when the Fed raises rates…”

    Problem being they said that for over five years.

  21. joyce says:

    19
    Agreed. Referring to them as retired is a pathetic mischaracterization. If there is a labor shortage (real or contrived), easy solution = more visas!!

  22. Marilyn says:

    21. HAHA, your right.

    And to the one who said the 20 somethings are eating that early bird special in Boca. HAHA!! This is very funny. I could just picture little Schumtzi ordering at The Red Apple Rest #2 Cafeteria……

  23. Marilyn says:

    and remember everything is coming up Roses, ohh I mean Pink in Boca!

  24. The Great Pumpkin says:

    Whatever, you are now making it seem like I am pulling this out of my a$$. You know damn well that I have been calling for 2017/2018 for a long time.

    Anon E. Møøse, Who never bit anyone’s sister says:
    January 4, 2016 at 12:11 pm
    Your 2012 predictions were for 2014… then in 2013 for 2015… then in 2014 for 2016…

    El Gourd-o has predicted 55% wage inflation — the only problem is we got 0.5%.

  25. Marilyn says:

    25 PA has so many cool things. Very cool !

  26. The Great Pumpkin says:

    Those people are gone with the wind. Call them retired, or whatever you want to call it, but they are never coming back to the labor market. If they do return, they will be your minimum wage workers. I would not consider these individuals to be skilled and ready for work. Quite the opposite. They gave up, and have found other means of survival. Don’t want them sucking off the welfare tit of the government, then give them a “make work” job. Otherwise, no one will hire them. They are almost employable after being out of the labor market for so long.

    Anon E. Møøse, Who never bit anyone’s sister says:
    January 4, 2016 at 12:15 pm
    Pumpkin-head’s Brain Surgeon:

    20 year-olds aren’t working (euphemistically, “retiring” — its not exactly like they’re taking in the early bird specials in Boca…) because they are better off short and long term ‘working for the state’.

    How you foresee any remarkable wage inflation given there is a some vast pool of untapped labor sitting idle defies logic.

  27. The Great Pumpkin says:

    *They are almost non-employable after being out of the labor market for so long. Sad to say, but they really don’t count in labor statistics. So don’t use this population as justification for no wage inflation. This population will not have the power to hold down wages.

  28. Libturd supporting the Canklephate says:

    Just saw airfare to Vegas from Philly for $172 on American round trip. All hail fracking.

  29. No Billionaire Left Behind (the good one) says:

    that’s funny

    Hughesrep says:
    January 4, 2016 at 12:10 pm
    2

    Y’all-Queda?

  30. Grim says:

    Last time I saw a flight to Vegas that cheap is when America West was still doing the $179 weekend flight.

  31. Statler Waldorf says:

    Used to play nice with squirrels, and related pests. Learned my lesson. Now it’s a peanut butter and D-CON buffet for the pests.

  32. Grim says:

    I did that flight at least 6-7 times.

  33. Ragnar says:

    I predict that 2017 will come. Scroll out in your Outlook calendar and you’ll see that I nailed this prediction already. I’m an awesome forecaster.

  34. Ragnar says:

    15, “The Great Pumpkin is coming. From the looks of it, it will come hard.”
    Here’s a photo of the results:
    http://tinyurl.com/thegreatpumkincame

  35. Libturd supporting the Canklephate says:

    First class has been floating around $600 for the past few months. That’s how I’ve been going since they give me $750 travel reimbursement. My buddies will be sardining it back in steerage.

  36. nwnj3 says:

    #31

    Mostly inapt, and apparently borrowed from a site named http://www.liberalamerica.org.

    https://www.google.com/#q=%22Y%E2%80%99all-Queda%22

  37. leftwing says:

    Chi, from yesterday

    Thanks for the advice. I misspoke, he was deferred (not waitlisted) at two schools.

    We spoke with his adviser right before break, made the strategic decision to put any reach out on hold until after break. Jury seems split on approach – too much too hard can alienate, not enough contact and you don’t care. Definitely having something new to say seems one common element.

    First quarter grades (unofficial) are solid, he’ll be going back with those.

    Ben also nails it, the biggest factor is likely the pull of your counselor at the school and his willingness to use it specifically on you. My guy confirmed with his counselor pre-break that two classmates were accepted at his second school and 25 – yes, twenty five – from his class had applied. It seems like his counselor has a very solid relationship with admissions at this school, unlike MIT, even though we traditionally don’t place many there. My guess is that the remaining kids that go there from his class will be the ones that the counselor actively supports with admissions.

    So, while the clanging chorus with no current experience in these matters (Pumps) continues to blindly pronounce NJ best in education without any defining parameters I am becoming more convinced the best place to get a top student accepted most easily into a leading institution is not a high end NNJ suburb, but an area demographically differentiated (income/geography) that places fewer students in such institutions.

  38. chicagofinance says:

    left…..I would have mentioned it several months ago, but you kind of want to fake authenticity as well as you can on the kids application……too many of these applicants look staged……10 years ago they stuck out, but now it appears that it is almost everyone in the game…..really push what makes your applicant different…..don’t focus on impressing…..focus on the mosaic of the community…….remember….these are heavily skewed and liberal institutions with a frightening amount of prejudice and bias (perish the thought).

  39. grim says:

    18 outside right now, heading down to 9. Damn I wasn’t ready for this. Nor were the squirrels apparently.

  40. In the end, my kid said fcuk Ivies, fcuk NESCACs, fcuk all the stress his buddies were going through. Applied EA to Emerson- a really good school that offers exactly what he wants to study- got accepted, got 1/2 off tuition, gonna play soccer.

    Game over. No stress, no fuss. Screw all these ‘prestige’ skools; they’re all gonna be pounding salt when the tuition financialization bubble finally bursts.

  41. All you need for squirrels is enough confidence to commence fire indoors.

  42. chicagofinance says:

    In other words….. “liberate tute me ex inferis”……

    Splat What Was He Thinking says:
    January 4, 2016 at 6:11 pm
    In the end, my kid said fcuk Ivies, fcuk NESCACs, fcuk all the stress his buddies were going through. Applied EA to Emerson- a really good school that offers exactly what he wants to study- got accepted, got 1/2 off tuition, gonna play soccer.

    Game over. No stress, no fuss. Screw all these ‘prestige’ skools; they’re all gonna be pounding salt when the tuition financialization bubble finally bursts.

  43. Juice Box says:

    grim is it personal this time with the squirrels?

    queue Geico

  44. leftwing says:

    Clot

    Agree, and I may very well move my kid toward his lower target/safety schools if – big ‘if’ given that so much can change over four years of college – he thinks he wants to go MS. I believe it is easier to get into a great masters program from a better than average school with outstanding grades than from an outstanding school with pedestrian grades. Of course, you give up the five year plan option.

    Chi

    Agree, and it’s frustrating at times. We were mostly advised against more than mentioning the divorce, it appeared as the last ‘activity’ on his common and focused more on the support he gave his younger brother. In reality, it was brutal…we filed October of his freshman year, slugged it out for three years, moved out of our (his) home into two temporary houses. It spanned literally the entire period of his transcript – Frosh through Junior years completely and put him in a position that was very uncomfortably socially. There are so many bad avenues he could have taken especially given the recreational substances nearly openly used by members of one of his HS sports teams. Instead he doubled down on academics and athletics, and excelled in both.

    In all honesty to me his most genuine attribute and the one you take him for after he clears the GPA/ACT/extracurricular bar is his fortitude and response in the face of this divorce (second longest one in our county). Opinion was it would seem too much like self pity and TMI. Maybe, especially for a school that may be hosting Mallala Yousafzai. Who the fcuk knows. Whole thing feels like a crap shoot.

  45. The Great Pumpkin says:

    Do you want your kid to develop and grow to his potential? Nj education will do that. He will be surrounded by a bunch of overachievers that will drive him to be the best that he can be. He will compete with the best, which will in turn make him better. Basically, do you want your kid to get the best public education he can receive or do you want to try and find an easy route to the ivy league?

    If you want your kid to learn with the lesser off kids, understand that there is a good chance that your kid will lose the ambition to do well. Unless he is totally self driven, he will be at loss in the poor school. He’s not competing with his friend’s to get into a college, that’s not cool in a poor school.

    That’s the reason the poor school’s get their top kid in to the ivy league over the more highly touted students from the wealthy suburbs. Do you know what kind of obstacles that poor student has overcome to be at the top of the class in a poor school? It’s most likely totally self-driven, and that is the amazing factor the ivy league wants. The self-driven poor student that was able to overcome the impossible obstacles and outrageous odds to be where there are. They might not be as smart as the 45th ranked student at Tenafly, but what that kid overcame to be where they are is simply amazing. Remember, the poor kid prob didn’t have one member of their family graduate from college. They had no guidance. They hardly had any friends that did well in school, most of their classmates never graduated high school. So to be put into this environment and to come out on top, says a lot.

    That’s also why there is a discount by colleges for good asian students. It’s no big deal, their parents force them to do good in school. It’s nothing special, the majority do well. But take a population that does not do well in school and have someone come out of that population graduating at the top of their class……that means something. That person did a miraculous thing and the colleges want that type of character. This person did it on their own, not with the help of their mom and dad. That’s tough.

    “So, while the clanging chorus with no current experience in these matters (Pumps) continues to blindly pronounce NJ best in education without any defining parameters I am becoming more convinced the best place to get a top student accepted most easily into a leading institution is not a high end NNJ suburb, but an area demographically differentiated (income/geography) that places fewer students in such institutions.”

  46. leftwing says:

    “do you want your kid to get the best public education he can receive or do you want to try and find an easy route to the ivy league”. Neither. The endpoint of his HS education for me is to get him into the highest level college where he can attain solid grades and education by being reasonably challenged academically.

    Achieving that endpoint is my definition of a superior school district. That is why a high end NNJ suburb is likely the place not to be as top end students are left behind by elite institutions for reasons other than their academics. On the other end of the spectrum ditto Newark, for the reasons you also mention.

    The definition of a superior school district for me has little to do with various colored ribbons or manicured lawns.

  47. No Billionaire Left Behind (the good one) says:

    Ivys never accepted Jews, blacks, women, minorities . to this day legacies rule the day

    right wingers should stick to right winger skools

Comments are closed.