ECONOMY
Recession ? This Economic Slowdown is Something Different
By Leroy Roberts Contributing Editor
As Alfred E . Newman used to say , “ What , me worry ?” When it comes to predicting the state ’ s economy , the emerging downturn may be worth worrying about , but for reasons that we have not ever experienced before . Unlike prior recessions , we are just shaking off two years of pandemic-driven disruptions and all the structural changes it has inspired , from a work-from-home labor force to shortages in everything from TP to vehicles .
There is no shortage of conflicting economic news , however . Two-quarters of down earnings have signaled the start of a recession , yet the state still has a shortage of labor and a budget surplus . There again , while we have a shortage of labor , some major corporations have announced preemptive layoffs .
Meanwhile , the increasing cost of goods continues to spawn inflation , even while fuel costs trend downward from their springtime highs . Interest rates , too , continue to rise as the Federal Reserve attempts to curb inflation that some feel was caused at least in part by the government ’ s infusion of trillions of dollars into the economy during the pandemic . And of course , lingering COVID-related supply chain shortages disrupt production and add further pressure on prices . No doubt , this economy is full of contradictory indicators – some cyclical , and some structural .
What about New Jersey ?
So far , only a few sectors in New Jersey ’ s economy – namely real estate – are experiencing a significant downturn ( off 19.8 % in July over 2021 ) in sales . Even so , the fall season is seeing recession talk transform into preemptive trimming . Recent actions include predictions of lower earnings , scrapping of growth plans by giants like Amazon , and workforce reductions from Google and Goldman Sachs , among others . The stock market , too , is responding by purging value .
What do the experts think about New Jersey ’ s ability to weather this economic downturn ?
“ Pundits will tell you we are in uncharted territory ,” jokes James Hughes , Ph . D . University Professor , Distinguished Professor of Urban Planning and Dean Emeritus of the
“ Lower to middle-income workers will experience the economic pain of this recession , while wealthier neighborhoods will likely see this downturn as more of an inconvenience .”
James Hughes , Ph . D . University Professor , Distinguished Professor of Urban Planning and Dean Emeritus of the Edward J . Bloustein
School of Planning and Public Policy .
The good news , of course , is that the economy rebounded . From April 2020 through July 2022 , the nation created nearly 22 million jobs , bringing the nation back to pre-COVID employment
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Daren Silverstein , President , and CEO of The CLI Group
Edward J . Bloustein School of Planning and Public Policy . “ The truth is , we don ’ t really have a clue .”
With that said , Hughes provides a bit of economic history to use as a reference point for judging our current economic situation .
“ Between 2010 and 2020 , the nation expanded employment creating 22.7 million jobs , or about 2.2 million jobs a year for a decade ,” Hughes notes , adding that in New Jersey , we gained about 405,000 jobs in that decade .
Unfortunately , when the pandemic shut the economy down , March through April of 2020 succeeded in wiping out all of the job gains of the prior decade , and then some . Nationally , we lost a staggering 29.9 million jobs in what Professor Hughes refers to as a two-month recession . For New Jersey , job losses were even more severe : the state wiped out 732,000 jobs , or nearly double the jobs created in the prior ten years of economic expansion .
Kristen E . Crouchelli , CPA , MBA , PSA , Senior Manager for the Nonprofit and Social Services Practice at SobelCo
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