I give Charles Steindel, the chief economist for the state Treasury Department, credit for honesty.
He could easily have portrayed the February drop in the state’s unemployment rate reported Thursday — from 9.5 percent to 9.3 percent — as a positive sign for the state economy. This is an election year, after all, and the jobless rate is the only employment number for most people.
But when he released his monthly commentary, “New Jersey Economic Insights,” later in the day, Steindel didn’t spin the rate decline at all.
He said the drop “mainly reflected a retreat in the state’s labor force participation rate from its recent unusually elevated levels.”
In short, fewer people were looking for work and therefore eligible to be counted as unemployed.
Steindel can afford to be honest because the overall employment trend is clearly positive for New Jersey.
In February, the state created 12,900 jobs, 7,100 of them in the private sector.
More importantly, the year-end benchmarking adjustments to the nation’s employment data to improve its accuracy resulted in a big upward revision for the Garden State.
In 2012, New Jersey added 66,400 jobs — far above the 48,000 previously believed and the most in more than a decade.
Now, about that jobless rate, which spiked to 9.9 percent in mid-2012 and at 9.3 percent is still well above the national rate of 7.7 percent.
With the revisions, the peak state jobless rate was 9.7 percent, and Steindel said that was driven not by people losing jobs but by more unemployed people returning to the work force.
“With the revisions, it’s clear that New Jersey’s higher-than-national average unemployment rate is directly related to the increase in our labor force participation rate,” he wrote.
Data from the U.S. Commerce Department’s residential employment survey support Steindel’s position.
In February 2012, when the state jobless rate was 9.2 percent, there were 4.15 million people employed in New Jersey. In August 2012, the jobless rate peaked at 9.7 percent, even though nearly 3,000 more people had jobs than six months before.
Since then, the number of New Jersey residents with jobs has increased to more than 4.2 million.
The U.S. labor force participation rate is abysmal, below 64 percent and down more than 2 percentage points just in the past four years.
As the national economy recovers, discouraged and part-time workers will look for full-time work again and the national jobless rate will go up.
Maybe New Jersey is getting a head start on work force participation, and one day the differences in the jobless rate might be reversed.
James Buchanan, who won a Nobel prize in economics in 1986 for advancing our understanding of who benefits from political decisionmaking, died this past week at 93.
One of Buchanan’s central premises was that public officials often choose what’s good for them rather than for the general public. That has become more obvious in the five decades since he co-authored “The Calculus of Consent.”
He recommended that the federal government be constitutionally required to balance the federal budget to compel politicians to control public spending.
A program administered by the New Jersey Small Business Development Centers will provide consultants to advise owners on the best ways to restore and reopen businesses damaged by Hurricane Sandy.
The one-on-one meetings at existing or temporary small business centers are free, funded by a grant from the U.S. Small Business Administration.
Small-business owners in Atlantic, Cape May and Cumberland counties can arrange a meeting by calling 609-347-2174.
Businesses in Ocean County should call 732-842-8685.
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