R/ECON has released its Winter 2025 economic forecast for New Jersey, revealing a slowdown in the state's economic growth. The annual gross domestic product (GDP) growth is expected to decline more sharply in 2025 compared to previous forecasts, despite the third quarter of 2024 showing relatively strong growth.
The job market in New Jersey has remained largely unchanged throughout 2024, with little variation in payroll employment and labor force participation rates. The state's unemployment rate remains elevated and is expected to continue at this level over the long term.
Nationally, Moody's December forecast predicts stronger near-term growth than earlier projections, supported by upward revisions to the 2023 annual growth rate and robust performance in 2024. "Moody’s December forecast calls for stronger near-term growth than at the time of our summer forecast," states the report. The fourth-quarter growth rate of 2.6% was anticipated to raise annual growth to 2.8%. Furthermore, Moody's revised Q3 real GDP growth for the nation from 2.8% to 3.1%. This forecast also aligns with recent Federal Reserve actions regarding interest rates.
New Jersey's payroll employment will see a modest increase by the end of 2024 on a year-over-year average basis, though a weakening trend is evident in the latter half of the year. This mirrors national trends and suggests a sharper slowdown over the next two years.
Revised population estimates from the U.S. Census Bureau show significant population growth in New Jersey, with an increase of over 230,000 people over three years. Despite this population rise, labor force numbers have declined slightly and are projected to continue decreasing moderately over the next two years.
As of Q3 2024, housing prices for new and existing homes have continued to rise year-over-year in New Jersey, while sales remain stable.
The R/ECON Forecast incorporates data from Moody's economy.com as well as state-specific GDP and employment figures through Q3 2024. It also uses personal income data through Q3 2023. R/ECON aims to enhance economic forecasting tools' quality and accessibility with support from the New Jersey State Policy Lab.
