New Jersey began the year with one of the highest unemployment rates among U.S. states, and a recent poll said a majority of residents are unhappy with the state economy.
The latest jobs numbers offer some hope, indicating a slight reduction in New Jersey’s unemployment rate in February, lowering it to 5.1%.
Still, the state economy was a key topic Thursday as Gov. Mikie Sherrill’s labor commissioner appeared a legislative budget hearing in Trenton.
Sen. Declan O’Scanlon (R-Monmouth cited lower unemployment in nearby states over the past few years and asked Kevin Jarvis, acting commissioner of the state Department of Labor and Workforce Development, how the Sherrill administration plans to make progress on New Jersey’s jobless rate.
“Connecticut performs better than we do, consistently. Pennsylvania performs better than we do, consistently,” O’Scanlon said. “How do we solve this?”
In his response, Jarvis pointed to a number of metrics used to measure economic strength, including the unemployment rate, which hovered at 5% in New Jersey in February 2025.
“When we look at all those things, what we see is that New Jersey’s economy remains strong and stable,” Jarvis said. “That being said, we always want to see those indicators [going] down.”
During his opening statement to the Senate Budget and Appropriations Committee, Jarvis highlighted his department’s job training and workforce development efforts.
These include partnerships with colleges and universities, technical schools, labor unions and employers, Jarvis said. He emphasized job training once again while answering O’Scanlon’s questions about improving the state economy.
“What we can do to address that is to make sure that workers are trained and can get the jobs that are available to keep that rate as low as possible,” said Jarvis, referring to unemployment figures.
The health of New Jersey’s economy is a key factor for lawmakers to consider as they prepare to draft a state budget for the fiscal year that begins July 1.
Historically, when the statewide unemployment rate is low, that can translate into stronger tax collections that can help support the budget. A robust economy can also mean state government doesn’t have to spend as much on social services, such as food assistance and other government-funded programs.
State Department of the Treasury officials this month appeared before lawmakers to discuss their forecast for the next fiscal year, which calls for a modest year-over-year uptick in tax collections.
They also pointed to some economic uncertainty, primarily due to shifting federal policies, and the ongoing military conflict in Iran, which triggered a surge in fuel prices.
The data released Thursday indicated that New Jersey shed more than 10,000 jobs in February, even as the statewide unemployment rate declined.
Jobs gains that had been estimated for January were also downgraded by the federal Bureau of Labor Statistics, to 3,500 from 6,000, the data show.
Revised jobs assessments released this month for 2025 indicated that New Jersey added fewer jobs during the prior year than was previously estimated by the Bureau of Labor Statistics.
The average annual unemployment rate in New Jersey also went up, to 5.2% in 2025 from 4.6% in 2024, according to the revised annual data released by the statistics bureau.
Views on the national economy were more negative, with 46% rating it as “poor” and 33% as “only fair.” The survey of 1,568 adults took place from March 27-30. It has a margin of error of plus or minus 3.2 percentage points.
Jarvis, during his appearance before lawmakers on Thursday, suggested national economic forces can play a key role in determining how well the New Jersey economy performs.
As an example, he cited inflation, which increased in March at the highest annual rate recorded in the last two years, according to the statistics bureau, amid surging fuel prices.
“Because we have a diversified economy, there are a lot of factors that affect that [unemployment] rate that we can’t always control,” Jarvis said. “We have a lot of sectors that, when [inflation] rates go higher, it affects their ability to continue to grow and create jobs.”
This story is made possible in part by the Corporation for Public Broadcasting, a private corporation funded by the American people.
