New Jersey’s labor market sent mixed signals in August, as the state added jobs but still saw its unemployment rate climb to 5.0%. According to preliminary estimates released by state officials, this marks the highest unemployment level the Garden State has experienced in three and a half years, underscoring the uneven nature of the current economic recovery.
The unemployment rate, now up from 4.9% in July and June, stands 0.4 percentage points higher than it was one year ago. More notably, New Jersey’s jobless rate sits 0.7 percentage points above the national average of 4.3%, widening a gap that highlights challenges facing local workers and businesses.
Job Gains and Losses Across Industries
While employers added 4,900 jobs in August, not all sectors shared in the growth. Professional and business services led the way with a robust gain of 7,300 positions, followed by private education and health services (+1,700), leisure and hospitality (+1,100), and other services (+800). These industries reflect areas where New Jersey has seen steady consumer demand and expanding opportunities, particularly in health care and professional services.
On the other side, several industries reported losses. Financial activities shed 1,400 jobs, construction dropped by 1,000, manufacturing fell by 600, and the information sector declined by 500. Trade, transportation, and utilities also pulled back by 400 jobs. The public sector registered the steepest single cut, losing 2,100 positions in August. These declines offset some of the private sector’s gains and contributed to the uptick in the unemployment rate.
Adding to the complexity, revised figures for July reduced the previously reported hiring gains. What had initially been described as an increase of 7,500 jobs was lowered to 6,400. Though this revision did not change July’s unemployment rate, it underscores how volatile labor market reporting can be from month to month.
Year-Over-Year Perspective
Looking at the broader picture, New Jersey has still added 28,900 nonfarm jobs since August 2024. Six of nine private industry sectors have grown over the past year, with private education and health services leading the charge at +30,200 positions. Professional and business services have expanded by 18,000, leisure and hospitality by 7,100, financial activities by 1,900, manufacturing by 1,300, and other services by 800.
But losses in construction (-10,000), trade, transportation, and utilities (-7,800), and information (-5,000) highlight areas of concern. Public sector employment has also contracted significantly, with 7,600 fewer jobs than a year ago. These figures indicate that while some industries are thriving, others continue to experience contraction that weighs down the state’s overall employment landscape.
What This Means for the Garden State Economy
The rise in unemployment despite net job growth suggests a combination of factors at play. Some workers may be re-entering the labor force in search of opportunities, pushing the unemployment rate higher even as jobs are being created. Certain industries, such as construction and information, remain under pressure from both cyclical shifts and long-term structural challenges.
For New Jersey’s business community, the numbers offer a mixed outlook. The strength in health services and professional fields shows where the state’s economy is expanding, while the continued weakness in traditional sectors like construction and manufacturing suggests areas that may need targeted support. For policymakers and industry leaders, balancing growth across these sectors will remain a key challenge heading into the final months of 2025.
Businesses and residents alike can follow ongoing updates on the state’s economic climate and industry performance by visiting Explore New Jersey Business.
With unemployment now at its highest rate in more than three years, the coming months will be closely watched to see if New Jersey’s economy can continue to add jobs at a pace strong enough to bring more stability to the labor market.
