Although job creation in New Jersey has been better than most of the country, economic growth remains disappointing. The federal "Jobs and Growth Plan" has failed to produce the jobs its proponents projected.

According to the latest numbers, New Jersey gained 9,500 jobs from April to May. And the previous month's estimate was also revised upward. Trade, transportation and utilities as well as the retail trade sectors led in the number of jobs gained. In addition, the unemployment rate has declined to 4.9 percent, the lowest level since October 2001.

"The recent picture has been positive," said NJPP President Jon Shure. "But looking at a wider perspective, New Jersey has a ways to go."

The federal Jobs and Growth Tax Relief Reconciliation Act was passed in May of 2003 and implemented in June. The stated mission of the tax-cut measure was to stimulate the economy and increase jobs. But the increase in jobs is far below what supporters of the act projected. Nationally, supporters of the tax cuts predicted creation of 306,000 jobs per month for the United States. Nationally, 3.366 million jobs were expected to have been created by May 2004; however, only 1.365 million new jobs exist. This is a shortfall of over two million jobs.

From June 2003 to May 2004, 98,600 jobs were supposed to have been created in New Jersey under this federal "Jobs and Growth Plan." As of May 2004, the federal plan has fallen 31,000 jobs short in New Jersey. To hit the federal target, New Jersey must gain 13,400 jobs per month on average for the rest of the year, not the 9,500 gained this past month.

Job creation has failed to keep up with the growth of the working age population since the recession ended 38 months ago in November 2001. Job growth since the recession ended has been only 0.9 percent while the working age population growth has increased two percent. If job growth had just kept up, New Jersey would have approximately 42,000 more jobs than it actually has now.

Jobs have been lost in some sectors. Approximately 500 jobs were lost in the financial sector from April to May. And the decline of manufacturing jobs has continued with 500 additional jobs lost. New Jersey's manufacturing industry has experienced a decline of 10.4 percent since the recession ended, a loss of 40,200 jobs.

For more on JobWatch, go to http://www.jobwatch.org. The JobWatch analysis takes into account differences that can be expected among states in terms of job creation. EPI uses state-by-state employment forecasts of Economy.com, a leading forecaster of regional economics. Economy.com provides employment projections for each state for the fourth quarter of 2002 to the fourth quarter of 2004. Using this data, EPI calculated each state's share of the total employment growth and applied it to the projected 306,000-jobs-per month growth rate to calculate how much employment growth each state should experience if the federal government's employment projects were realized. That works out to an average of 9,000 new jobs per month for New Jersey.

Economic Policy Institute's JobWatch tracks current trends in the U.S. labor market and offers up-to-date readings on its status. New Jersey Policy Perspective is a non-profit, non-partisan organization that conducts research and analysis aimed at providing information to help inform debate in New Jersey.

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