The first quarter of 2012 depicts an economy that is experiencing a noticeable recovery. The United States (US) economy is heading in the right direction, as seen with a recent boom in hiring and growth in the private sector. New Jersey's (NJ) economy is also moving into a better state of affairs. The Garden State's recent economic data suggests that the state has experienced its best growth on record since 2000. Central New Jersey (CNJ) has similarly demonstrated robust economic activity, enjoying a lower unemployment rate than the nation and the state.

The national unemployment rate held steady at 8.3% in January and February, and declined to 8.2% in March with the US adding more than 700,000 jobs since the beginning of the year. However, analyst projections still hold that the unemployment number will not decline below 8% until after 2013. NJ's unemployment rate remained at 9% throughout January and February; the state is projected to maintain a rate of 9% to 8.9% in March. Nevertheless, NJ has gained around 74,000 jobs since 2010. CNJ's unemployment rate is still hovering above 7%, which depicts a moderate employment number compared to the state and the country.

Businesses want to operate their companies in a location that has an educated and skilled labor force. NJ's labor force is considered a lucrative asset to prospective businesses. The state, for example, has the largest pool of scientists in the nation, with more than 184,000. Similarly, approximately 400,000 employees operate as engineers or special expertise professionals. NJ also ranks first in chemists, second in biochemists, and third in microbiologists, reaffirming long held views of NJ and its extremely talented labor force.

Consumer spending, or consumer demand, demonstrates consumers' individual expenditures. Consumer spending rose 0.4% in January and another 0.8% in February. It is expected that consumer spending will continue to increase because of higher gasoline prices. Personal income increased around 0.4% in the first two months, and it is projected to grow in March as well.

The inflation rate depicts how prices of consumer goods have changed over time. Inflation affects consumer spending habits because if the price of one product increases, the ability to purchase other items decrease. A healthy inflation rate is between 2 to 3%. The US inflation rate was 2.9% in January and February. CNJ's inflation rate is currently 2.4%.

NJ's office vacancy rate is hovering around 21.4%, which equates to 33.8 million square feet of available space. Northern and Central NJ's office vacancy rate is still above 20% as well, with Northern NJ at approximately 23.3% and CNJ at 25.1%. By the end of 2011, the asking rate for rent in Northern and CNJ reached $22.11, which is highly competitive compared to the annual rate of $22.30. As of January 2012, Central and Northern NJ's retail vacancy rate had fallen to 7.98%, compared to 8.12% in 2011. The real estate market, in general, is expected to improve in 2012 because of hiring growth and aggrandizing economic activities.

NJ is constantly observing the emigration of new businesses to the region. 50 prospective businesses selected NJ as their new home between 2010 and early 2011. 20 Fortune 500 businesses are also headquartered within the Garden State. Moreover, NJ is commonly referred to as the "Medicine Chest of the World" because of its strong commitment to pharmaceutical and medical technology. Some of the major companies that are located in CNJ include Bristol- Meyers Squibb Company, Merck, Novartis, and Otsuka America Pharmaceutical.

The economy has been improving steadily. At the same time, world affairs continue to affect the US’s turnaround; most notably gasoline prices, which have increased in part due to sanctions against Iran as well as instability throughout the Middle East and North Africa. However, the rapid employment growth and increased consumer spending seen throughout the first quarter may help the US economy curb such obstacles and strengthen its recovery.. CNJ is still a leader in economic progression, with its moderate unemployment rate and its ability to attracted well- known businesses to the region.

For questions and comments contact Nicol@mercerchamber.org.

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