At one point Thursday, the Dow Jones Industrial Average had fallen 780 points. Drops of hundreds of points, partial rebounds and more drops have characterized the stock market this fall.
Time to worry? Not much, and even a normal cyclical recession doesn’t seem imminent. Certainly nothing like the financial panic that led to the severe recession of 2007-2009, which shrank economies from South Jersey to the United States and beyond.
With the Dow still above 24,000 and not that far from record levels hit earlier this year, a share-price change of just 3 percent produces a 700-point swing. And the stock market and the economy aren’t the same thing. They sometimes go their separate ways.
South Jersey happens to have a national-stature economist who weighed in on this Thursday, saying the markets seemed to believe the Trump administration’s tax cuts “would produce an extended period of excessively high growth.” Joel Naroff, whose second home is in Margate, said the U.S. economy remains in good shape, even as the markets are overvalued and in disarray.
The same day, the New Jersey Business & Industry Association released its annual Business Outlook Survey, which made clear the state poses significant threats to the regional economy.
New Jersey’s economy still trails that of the nation, but has been strong enough to give most Garden State businesses a good year. Of 898 businesses responding to the survey, 55 percent reported higher sales and just 19 percent lower.
Most credit the national economy, rated excellent or good by 89 percent. Just 40 percent said the same about the New Jersey economy.
Three-quarters gave pay raises this year and said they expect to do the same next year. But only a third expect the state economy to be better in the first half of 2019, while a third expect it to be worse. One big factor: The vast majority said New Jersey government hasn’t made progress over the last year on easing regulatory burdens on companies.
Businesses see particular problems on the horizon, mainly related to initiatives pushed by state Democrats.
Two-thirds said increasing the minimum wage to $15 an hour would impact their business, 39 percent said significantly. They expect to respond — in order of likelihood — by raising prices, reducing staff, reducing employee hours and increasing automation.
Even more companies — 77 percent — said they had business-related concerns about legalizing marijuana for pleasure use.
The survey’s laundry list of problems with doing business in New Jersey also makes a handy guide to what government should do to make everyone more prosperous: • Reduce taxes and fees • Control government spending • Control labor costs • Reduce the cost of regulatory compliance
South Jersey suffered more from the severe recession and its own casino-industry downturn because New Jersey’s economy didn’t recover as strongly as the nation’s.
The Jersey Shore and a rebounding Atlantic City would be in better shape today if state government had done even an average job of enabling economic growth. If it doesn’t at least achieve the ordinary by the time the next recession inevitably arrives, this region will suffer needlessly again.