COVID-19 Updated Market Insights for Northern New Jersey

Northern New Jersey – As Bleak as New York 

The Northern New Jersey metro area shed 408,100 jobs year over year, or 18.8%, according to the April Bureau of Labor Statistics employment results. This rate of decline ranked 75th of 82 metros or in the bottom 10. As bad as this was, it was better than New York City’s loss of 19.2% as well as Long Island (-21.7%) and Westchester County (-22%). Northern New Jersey’s unemployment rate climbed to 15.9% which was worse than New York City’s 14.6%. While these numbers are preliminary, the near-term outlook remains cloudy. Although many furloughed jobs will be restored after the shelter-in-place is lifted, a large number of jobs were saved by the payroll protection program (“PPP”) which incentivized companies to keep their staff on the payroll. If the PPP is not renewed in July, these “saved” jobs will be lost for good and the job losses could rise further 

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Looking for additional insights? Explore our interactive COVID-19 map to analyze the potential impact on commercial real estate markets.

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Of Northern New Jersey’s losses, 25.5% or 104,200 jobs were in the leisure and hospitality sector. This equates to a rate of decline of 59.6%. The retail sector shed another 46,800 jobs, a decline of 21.4%. Netting out these two concentrated sectors puts the remaining year-over-year rate of job decline at 14.5% which ranked 78th of 82 metros, or in the bottom 5. To be fair, the range of losses for the non-retail-leisure-hospitality net category varied from -20% (Detroit) to -1.6% (Washington, DC) with the middle one-third of the metros ranging from -5.9% to –9.1% range. 

Northern New Jersey’s office sector 68,100 jobs year over year, which was a rate of decline of 11.9%. This ranked 74th of 82 metros. The middle one-third of metros saw office sector losses of -5.0% to -8.7%. The metro average decline was 6.6%. 

To put these cumulative job losses in context, Northern New Jersey’s seasonally adjusted job gain over the last expansion was 179,600 jobs, a growth rate of 9.0%. The recent seasonally adjusted loss of jobs accounted for 238% of the gains in the recent expansion. This means that the metro area shed 2.4 jobs in two months for every job that it had added over the last ten years. This bleak ratio ranked 78th of 82 metros. The equivalent ratio for the U.S. was February-to-April jobs lost accounted for 94% of the 22.7 million jobs added from the nadir of February 2010 to February 2020.  

Northern New Jersey’s transportation and warehouse sector lost 21,000 jobs year over year, a decline of 18.7%. United Airlines is estimated to employ 14,000 in the Newark area according to choosenj.com. These and the other businesses that depend on air travel face serious risks. An $82 billion federal spending bill passed In December allocated $700 million for Amtrak’s Northeast corridor as well as other funds for railroad repair that will hopefully put people to work over the next few years. But the biggest question surrounds the survival of the brand new 3-million-square-foot American Dream mall that opened in late 2019 and added 2,600 leisure and hospitality jobs in the metro. The complex took years to build and was just gaining momentum. Even if it is opened soon, many would-be visitors might be apprehensive about going to an indoor water park or skating rink in July. 

Thus, the outlook in Northern New Jersey is mixed: coronavirus cases are finally starting to flatten or decline in the metro, and more of the economy has re-opened. Still, many retail stores may remain shuttered as companies may not have the stamina to re-open. Moreover, many businesses are surviving on the Payroll Protection Program. If this is not renewed this month or next, many more businesses will cut jobs and/or fold.  

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You may also find our website dedicated to COVID-19 to be helpful during this time. Visit moodys.com/coronavirus for our latest research and views on the credit and economic impact of COVID-19. This site brings together insights from across Moody’s to help you better understand the financial implications of the outbreak