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-- New Jersey Economy - Overview
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-- Overview Since its early colonial settlement, New Jersey's economy has evolved from its first base in farming and trade, to manufacturing and, most recently, to reliance on service and technology-based industries. The influence of private sector business ventures with New Jersey government also long has been controversial. Commencing in the 1830s, the state government's close--and often corrupt--relationship with the Camden and Amboy Railroad, which financed much of the state government's budget through its operations, led to cynics branding New Jersey as "the state of the Camden and Amboy." Toward the end of the century, the state legislature's approval of laws catering to the interests of giant corporate trusts and monopolies to attract them to legally incorporate in the state brought charges by a leading muckraker that New Jersey was a "traitor state." New Jersey’s corporate landscape features iconic brand names established during the 19th century, including Prudential, Campbell Soup, and Johnson & Johnson. The state's legacy as a corporate hub stems directly from targeted legal and tax updates enacted in the late 1800s. Faced with significant fiscal challenges, New Jersey Governor Leon Abbett collaborated with corporate attorney James B. Dill to fundamentally transform how businesses were chartered and taxed. At the time, common law principles across the United States strictly prohibited corporations from owning stock in other corporations, a restriction meant to prevent monopolistic control. New Jersey altered this legal framework by passing the General Incorporation Acts of 1888 and 1889. This legislation introduced three key shifts:
The state's role as a national leader in manufacturing--which evolved after the Civil War with its key location on the central railroad corridor, access to raw materials and a workforce of recent immigrants--began to erode in the latter years of the last century. In the 1970s, particularly after the spike in energy prices following the Arab oil embargo in 1973, New Jersey lost both existing and potential investment as other locations offered advantages in lower-cost labor, real estate, taxes and energy supplies, resulting in the state experiencing its highest levels of unemployment since the Great Depression of the 1930s. More recent economic trends have seen the growth of technology-based manufacturing industries in electronics, computers and medical devices, as well as a shift toward service industries such as finance and health care. In 2020 and 2021, New Jersey suffered the economic impacts of the COVID-19 Pandemic which led to lockdowns and sharp cutbacks in employment, spending and other activity. In 2022, however, the economy rebounded strongly, resulting in labor shortages and spikes in inflation, particularly in energy, housing and food. By the middle of 2022, New Jersey had regained all the jobs lost in the spring of 2020 and by 2023 had returned to the unemployment rate prior to the Pandemic -- New Jersey’s Modern Business Landscape
New Jersey continues to position itself for enterprise growth. According to the U.S. Census Bureau, the state’s commercial infrastructure features a combination of small companies and large enterprises. The latest New Jersey baseline economic metrics as of 2025: Total Employer Firms 194,218 Total Establishments 231,974 Total Employment 3,636,293 employees Annual Payroll ($1,000) $214,757,817 -- Small Business vs. Large Enterprise Distribution Small businesses form the core foundation of the state's local economy, though employment remains balanced between smaller establishments and major corporations.
-- Gross Domestic Product New Jersey possesses one of the largest economies in the United States. As of recent reports of the U.S. Bureau of Economic Analysis (BEA), , New Jersey's annualized Gross Domestic Product (GDP) has climbed to over $815 billion, representing roughly 2.9% of the total US economic output. On a per capita basis, New Jersey consistently ranks in the top ten states nationwide, driven by high-productivity sectors clustered around the state's major metropolitan corridors.New Jersey continues to hold its position among the largest state economies in the nation. * New Jersey Economy at a Glance, Bureau of Labor Statistics, US Department of Labor * Regional Economic Accounts, Bureau of Economic Analysis, US Department of Commerce -- Employment
According to the U.S. Bureau of Labor Statistics (BLS) and annual benchmark revisions, the state's average annual unemployment rate was 5.2% in 2025. This marks an increase from the 4.6% rate recorded in previous years, placing New Jersey's jobless rate above the national annual average of 4.3%. As of the latest reports, New Jersey’s total seasonally adjusted nonfarm employment sits at 4.38 million jobs. Preliminary employment estimates for January 2026 produced by the BLS indicate that New Jersey payrolls increased by 6,000 over the month. The unemployment rate for January was 5.2 percent, a decrease from December’s rate of 5.4 percent. The leading sectors of private employment in the state remain trade, transportation, and utilities; private education and health services; and professional and business services. In contrast to the highly synchronized, broad-based expansions seen immediately after the pandemic, recent multi-month performance highlights diverging trends among private industry sectors:
Long-term structural shifts continue to alter the composition of New Jersey's core commercial sectors:
-- Largest industries
The largest sector in New Jersey have been finance, insurance, real estate, rental, and leasing. This industry has accounted for about a quarter of New Jersey GDP, compared to 20% for the nation. The second largest industry was professional and business services. The largest contributor to real GDP growth in New Jersey was non-durable goods manufacturing, with computer and electronic manufacturing comprising approximately one-fourth of all manufacturing output. * Regional Economic Accounts, Bureau of Economic Analysis, US Department of Commerce -- Personal income
New Jersey has long ranked among the wealthiest states in the nation. According to data compiled by Wealthvieu.com, New Jersey had the highest concentration of millionaire households among all 50 states in 2025, with 9.76% of its approximately 3.2 million households possessing assets of at least $1 million.
Source:https://wealthvieu.com
Incomes for New Jersey residents rose by about $1,600 in 2024 and remain among the highest in the nation, but the state’s homeowners pay some of the highest monthly costs in the nation, according to the U.S. Census Bureau’s 2024 American Community Survey. Among the measures the state has implemented that help bridge income gaps are a guaranteed minimum wage — significantly higher than the federal wage — that increases based on inflation, along with social safety-net programs that were broader than federal mandates. As in the nation as a whole, concerns regarding wage stagnation and growing income inequality have become increasingly prominent in public policy discussions. According to U.S. Census Bureau data released in 2021, New Jersey ranked 11th among the 50 states and the District of Columbia in terms of income inequality, as measured by the Gini Index. The highest levels of income inequality were reported in the District of Columbia, New York, Connecticut, and Louisiana. New Jersey ranked below Georgia and above Arkansas in the national rankings. Income inequality also varies considerably within New Jersey. Among municipalities and census-designated places, Deal, Far Hills, and Millville exhibited some of the largest income inequality gaps, while Leeds Point (within Galloway Township, Atlantic County) and Heislerville (within Maurice River Township, Cumberland County) recorded some of the lowest levels of income inequality. According to the website PropertyShark, in 2025 New Jersey reached a new high with six ZIP codes placing among the country’s top 100 most expensive real estate markets. Alpine’s 07620 reclaimed the state’s top spot with a record-high median sale price of $4.35 million (ranking 13th nationally). Deal’s 07723 placed second in the state at $3.55 million (ranking 22nd nationally). The remaining State entries making the national top 100 included Stone Harbor’s 08247 at $2.55 million (#57), Short Hills’s 07078 at $2.415 million (#69), Avalon’s 08202 at $2.36 million (#75), and Allenhurst’s 07711 at $2.15 million (#93). Nationally, California’s market share dropped to 61% of the country's priciest ZIP codes. Furthermore, after an eight-year run as the nation's most expensive ZIP code, Atherton’s 94027 fell to second place with an $8.33 million median. It was dethroned by Miami Beach's Fisher Island (33109), which claimed the country’s highest spot with a surging median home sale price of $9.5 million. * Income in the United States 2024, US Census Bureau * New Jersey Per Capita Personal Income 1930-2019, Federal Reserve Bank of St. Louis * Census shows NJ had highest median household income of any state in 2022, NJSpotlightNews.org * Bearfacts New Jersey, Bureau of Economic Analysis, US Department of Commerce * Most Expensive US Zip Codes by Median Sale Price 2022, PropertyShark.com * Median NJ income on the rise, poverty declining, Census Bureau data shows, 1/6/2023, NJSpotlight.org -- Poverty
The poverty rate in New Jersey went up by 1.1 percentage points to 10.2% in 2021, according to estimates from the US Census Bureau’s American Community Survey Between 2019 and 2021 (2020 data was skipped, due to the pandemic interfering with survey responses), poverty increased more in New Jersey than nearly all other states. The state’s median income dropped by 1.7% in that time. Only Hawaii and Maryland registered bigger increases since 2019. The state’s median income dropped by 1.7% in that time. The poverty rate in New Jersey was roughly 10% among native-born American citizens, 9% among naturalized citizens and 21% among foreign-born non-citizens. Among racial and ethnic groups, poverty rates were around 18% among Hispanic residents, 16% among Black residents, 14% among multiracial residents, 7% among white residents and 6% among Asian residents. A Census Bureau report for the five-year 2016-21 period estimated for single years found poverty statewide was virtually unchanged when comparing 2016 to 2021, when 10.2% of people were living under the federal poverty limit--an income of $26,500 for a family of four. That level, however, was higher than in 2019 when it had dropped to 9.2%. The relatively static poverty level showed a growing gap between lower- and higher-income residents since median household income rose by more than 17% over the five-year period from 2016 to 2021, reaching $89,296. In 2021, the national poverty rate was 11.6%, with 37.9 million people in poverty. This was the first increase in poverty after five consecutive annual declines12.3%, representing 39.7 million people in poverty living below the federal poverty level of $24,000 for a family of four. In New Jersey, the rate over 2019 and 2020 was 7.2%, the third lowest of all states, behind only Minnesota (7%) and New Hampshire (4.9%). Despite recent progress, Newark, Camden and Paterson remain among the poorest large cities in the nation. Poverty levels are above 50% in Passaic, Lakewood, Paterson, Trenton and Newark. * Poverty in the United States 2021, US Census Bureau * Income and Poverty in the US 2020, US Census Bureau * American Community Survey 2013-2017, US Census Bureau * US Poverty Rate by Demographics and State, thebalancemoney.com * Median NJ income on the rise, poverty declining, Census Bureau data shows, 1/6/2023, NJSpotlight.org |
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-- Government subsidies and incentives
New Jersey provides various subsidies and tax credits through several programs, with most of them administered through the state Economic Development Authority created in 1974 by Governor Brendan Byrne. The amount of these subsidies was substantially increased during the Christie Administration; an audit released in January 2019 prepared at the direction of Governor Murphy criticized the lack of oversight of job creation data by the EDA, which has been responsible for nearly $11 billion in grants and tax credits intended to prevent companies from leaving the state or encouraging them to expand. The largest portion of that amount--$3.9 billion--was from Grow NJ, created by a 2013 law under the Christie administration. The report also found little evidence that the incentives had influenced expansion or site decisions and that the program had shifted from its original goal of creating new, permanent jobs to preventing the loss of jobs "at risk" of moving out-of-state. In some cases, the report found that the aid had contributed to companies simply relocating within the state from one town to another. In January 2021, the New Jersey Economic Recovery Act was enacted to reform the EDA financing practices and strengthen its monitoring of job creation and other conditions attached to grants and loans, as well as creating a seven-year, $14 billion package of tax incentive, financing, and grant programs . * New Jersey Economic Development Authority * New Jersey Economic Development Authority, Financing and Incentives * New Jersey Economic Development Authority: A Performance Audit, January 2019, New Jersey State Comptroller * New Jersey Business Action Center, NJ Department of State Economy * Economy * Employers * Growth Companies * Venture Capital * Labor Unions * Real Estate * Transportation * Health * Law Firms |