1. U.S. and New Jersey Economic Situation Charles Steindel Resident Scholar Ramapo College of New Jersey November 17, 2014

2. U.S. Situation and Outlook Output will continue to grow at a moderate pace. 2

3. U.S. Situation and Outlook Output will continue to grow at a moderate pace. – International problems may be the greatest concern. – National tax and spending changes highly unlikely. 3

4. U.S. Situation and Outlook Unemployment will continue to move down. – Wage growth likely to pick up. 4

5. U.S. Situation and Outlook Inflation likely to stay contained. The Fed will start raising short-term rates in 2015, but at a gradual pace. 5

6. New Jersey Trends Jobs and incomes have been growing. Car sales, housing permits, have moved up rather sharply 6

7. Private Payroll Employment Thousands 7

8. Why Is New Jersey’s Job Count Still Under the Previous Peak? Partly reflects slower NJ population growth (retailing; health and education). Partly reflects near-term problems (leisure and hospitality; possibly construction). Relative weakness in finance and professional and business services raise longer-term concerns. New York has outperformed New Jersey likely because of the enhanced cachet of its brand. – Shows up in much stronger leisure and hospitality, with spillovers to retailing, construction, and some parts of professional and business services. In any event, current expansion has been more marked than the last one. – Also possible the current number of jobs is being undercounted somewhat. 8

9. New Jersey Private Payroll Employment, thousands (June 2003-January 2008 in red)

10. March 2013-March 2014 New Jersey Job Change Currently reported: -12,800 As suggested by unemployment insurance tax records: 24,500 10

11. Unemployment Rates

12. Labor Force Participation Rates 12

13. Ratio of Employment to Population 13

14. Personal Income Billions of Dollars, Annual Rate 14

15. New Jersey New Car Sales (12-month total)

16. New Jersey Housing Permits (12-month total)

17. The National and State Outlooks 17

18. Real GDP Growth (compound annual rate) 18

19. U.S. Unemployment Rate 19

20. CPI Growth (compound annual rate) 20

21. New Jersey Private Payroll Employment, thousands

22. New Jersey Unemployment Rate

23. Personal Income Billions of Dollars, Annual Rate 23