The U.S. Bureau of Economic Analysis issued its report on the Gross Domestic Product by State and Personal Income by State for the third quarter of 2022. And there was good news for New Jersey, according to one expert.
While real GDP increased in 47 states and the District of Columbia in the third quarter, Charles Steindel, former chief economist of the state of New Jersey, analyzed the report for the Garden State Initiative and highlighted some other good economic numbers.
New Jersey’s real GDP grew at a healthy 3.9% annual rate in the third quarter. That was higher than the nation’s 3.2% figure and ranked us 10th in the nation — and higher than any other state in the Northeast. In the second quarter, we were hurt by odd weakness in nondurable goods manufacturing, but, in the third quarter, we were aided by a marked rebound in that sector.
Personal income in the state was also strong in the third quarter; in fact, it grew in all 50 states and the District of Columbia. For New Jersey, it grew at a 5.5% rate — 18th in the nation.
Is inflation impacting New Jersey income growth?
Steindel said the natural question is how much inflation has taken off from the state’s income growth — are price increases in New Jersey slower, faster or the same as the national numbers? Surprisingly, Steindel said price increases have apparently been, on average, no higher and, perhaps, a bit lower recently in this area than elsewhere.
As of November, the Consumer Price Index for the New York-Newark-New Jersey area was 5.9% higher than in November 2021, compared with a national increase of 7%. The latest figure for the Philadelphia-Camden-Wilmington area is from October; that was up 7.8% from a year earlier, matching the national mark. Furthermore, last week the U.S. Bureau of Economic Analysis released estimates for 2021 of real and current-dollar spending by state. New Jersey’s price index grew 2.6% last year, which was noticeably under the 4% national increase.
Of course, relatively low growth in a year or two doesn’t alter the fact that the level of prices here is much higher than the national average. BEA estimates that the cost of living in 2021 in New Jersey was 9.1% higher than average. This gap is almost entirely due to higher housing (34.6%) and utility (17.9%) costs.