What happens next with the New Jersey economy?
⚫ A new report finds the NJ economy is still growing despite some concerns
⚫ Interest rate hikes continue to slow inflation but the labor market remains strong
⚫ Any future downturn should be mild according to the report
A new analysis from the Steve Sweeney Center for Public Policy at Rowan University finds that despite mixed signals, the New Jersey economy continues to hum along at a positive pace, and any future downturn will probably be modest.
The Multi-Year Budget Workshop: New Jersey Economic Outlook report was prepared by economist Charles Steindel, a former chief economist for the New Jersey Treasury Department.
He said while the labor market remains strong, there are some short-term concerns.
Borrowing money keeps getting more expensive
“The Federal Reserve has been raising interest rates an awful lot which is going to slow down a lot of areas of the economy and we have continuing supply-type problems,” he said.
He said this will probably result in a period of very slow or limited growth but “the underpinnings are pretty good and I think inflation is beginning to ebb, when inflation slows down enough the Fed will stop increasing rates.”
Steindel believes that could happen later in the spring.
No big crisis anticipated
“And at some point later, if the economy weakens, either late this year or early next year the Fed might start bringing rates down again so I don’t think we’re in for a major crisis.”
He noted there has been some softening of retail sales and the housing market has certainly slowed down “but we keep on adding hundreds of thousands of jobs every month, New Jersey has been doing quite well in jobs, we still continue to see an unprecedented number of job openings.”
He said the report notes moving forward the war in Ukraine and COVID-related labor slowdowns in China can push energy prices higher and will continue to cause grain and other supply chain concerns and job growth in New Jersey may slow, but a significant downturn is not anticipated.
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