New Jersey’s job market is facing a period of significant stagnation, characterized by a sharp increase in layoffs and persistently weak hiring. This downturn marks a stark contrast to previous periods, leaving workers and businesses navigating a challenging economic landscape.
A Surge in Job Cuts
Data from Challenger, Grey & Christmas reveals a dramatic rise in job eliminations across the state. From January through July, New Jersey companies reported cutting approximately 26,700 jobs. This figure represents a significant leap when compared to the 5,800 jobs lost throughout the entirety of the previous year. Further analysis indicates that by June 2025, the state’s unemployment rate had climbed to 4.9%, the highest point since January 2022, with a substantial drop of 9,700 jobs recorded in that month alone. Between February 2023 and February 2024, New Jersey collectively lost 34,000 jobs, underscoring the widespread nature of these cutbacks. In the first quarter of 2025, businesses announced 3,618 layoffs, more than double the number reported for the same period in the prior year.
Factors Fueling the Slowdown
Several interconnected economic factors are contributing to the current weakness in New Jersey’s job market. A primary driver has been the series of interest rate hikes implemented by the Federal Reserve to combat inflation. While these measures have begun to cool price increases, they have simultaneously made borrowing more expensive, impacting business investment and consumer spending. The lingering effects of inflation, though moderating, continue to strain household budgets and increase operational costs for businesses.
Adding to this instability are the volatile tariff policies enacted by the federal government. These policies have created a “rollercoaster effect” for businesses, disrupting supply chains, increasing the cost of imported goods, and fostering an environment of uncertainty that discourages investment and expansion. Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, notes that tariffs act as a significant tax hike, raising prices and costing families thousands annually, while also directly contributing to job losses. Rising energy costs further exacerbate these pressures on businesses.
Businesses Freeze Hiring, Workers “Job-Hug”
In response to these economic pressures, many New Jersey businesses are implementing hiring freezes, cutting expenses, and delaying investment decisions. This cautious approach has led to weak hiring across various sectors. A survey by the NJBIA indicated that while some businesses increased hiring in 2024, the overall net hiring level remained neutral for the year. The shift from a candidate-driven market, often referred to as the “Great Resignation,” has ended, with employers now facing a tighter job market where finding new roles is more challenging.
This heightened insecurity has fostered a “job-hugging” sentiment among workers. Many employees, fearing the difficulty of finding new employment in the current climate, are choosing to stay in their current roles, even if they are dissatisfied. This trend is often described as “quiet quitting,” where individuals maintain their responsibilities but disengage from seeking further growth or improvement due to job security concerns.
Expert Views and Sectoral Nuances
Experts describe the New Jersey job market using terms like “stalled,” “stagnant,” and “weak”. Will Irving of the Rutgers University New Jersey State Policy Lab characterized the year-to-date performance as “a mixed bag – overall, relatively weak”. Charles Steindel, former chief economist at the New Jersey Department of the Treasury, points to a stagnant or even slightly declining labor force, painting a picture of a softer economic environment than job numbers alone might suggest.
While the overall trend is downward, certain sectors continue to show resilience and growth. Education and health services, along with trade, transportation, and utilities, have recorded gains. However, these pockets of strength have not been enough to offset broader losses in areas like professional and business services, information, and manufacturing. The state’s unemployment rate, currently higher than the national average, places New Jersey among states with the highest jobless rates.
Navigating Uncertain Times
The confluence of rising interest rates, persistent inflation, and the disruptive impact of trade policies has created a challenging environment for New Jersey’s economy. Businesses are responding with cost-saving measures that directly affect hiring and employment levels. For consumers, these economic pressures translate into higher prices and concerns about affordability. As the state grapples with these headwinds, the job market remains a key focus, with many watching for signs of recovery and stability in the months ahead. This news continues to be a top item of interest for many residents and businesses across the state.
