After a decade of growth, it’s a ‘Goldilocks economy’ for NJ
As 2020 begins, what can we expect from the New Jersey economy?
James Hughes, Rutgers University professor of economics, pointed out that while economic growth in the Garden State and the nation has not been spectacular, it has been on a positive trajectory for quite a while. In fact, he said we have just passed through the first decade in U.S. history where we have not had a recession.
He said with the state unemployment rate at a low 3.4%, the New Jersey economy looks like it will stay on the same trajectory it’s been on.
“Basically, it’s been slow to moderate growth — not excessive but not lagging," he said. “I think the overall catch-phrase that we could use for 2020 would be a Goldilocks economy: not too hot, not too cold, just right.”
So how long might this unspectacular but positive trend last?
Hughes said right now there is no indication the economic expansion will come to a halt, but it could possibly end for a variety of reasons.
“One could be an external shock, such as the energy shocks in the 1970s. It could be the Fed rapidly increasing interest rates to combat inflation, which happened during the early 1980s," he said.
He said it could also happen because of a bubble, like the housing and credit bubble that burst in the early 2000s.
“Fortunately none of those appear to be on the horizon," he said. "There have not been any bubbles in the economy that are going to cause any problems in the future so steady as she goes.”
He also noted that Australia has not had a recession since 1992, "so it's possible to have a very, very long expansion.”
Hughes added a variety of different “up-skill” programs offered by the state Department of Labor and Workforce Development have had a positive effect on workers and those looking for employment.
“But it’s going to take a long time before you have enough trained individuals to change the direction of the economy.”
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