New Jersey is nearing the top of an undesirable national ranking.
The state’s unemployment rate now stands at 5.4%, one of the highest in the country and the highest since the pandemic. Only California and Washington, D.C. report higher jobless rates.
The New Jersey unemployment rate is a full point lower nationally at 4.4%.
For those on the job hunt, that number is incredibly real. The job market is cold, and you’re not alone in your search for employment.
Jobs Are Slowly Being Added
While the job market remains dicey, New Jersey employers are slowly patching up the holes. Employers added 5,700 jobs in December. Despite the addition, gains weren’t large enough to offset the losses—the unemployment rate didn’t budge.
Health care, education, leisure and hospitality, and finance showed modest growth while construction, manufacturing, trade, transportation, and utilities continued to shed jobs.
Over the past year, the state added just 9,000 non-farm jobs. Only two private sectors—health and education, and professional services—saw sustained growth.
Most areas shrank.
Layoffs Hit Big Names
Many of the NJ layoffs are visible. More than 11,000 job cuts were recorded in New Jersey in 2025 alone, affecting major pharmaceutical companies, logistics firms, energy providers, and even household names like Starbucks.
The bad news? The trend has carried into 2026, signaling a labor market that appears to be stuck in place.
Initial Recovery Loses Momentum
During the COVID-19 pandemic, New Jersey unemployment peaked at 15.3%. That number steadily declined, sustaining pre-COVID numbers by 2022.
However, that initial recovery has stalled.
Two straight months of job losses in the fall pushed unemployment higher, and December’s modest gains failed to reverse the trend.
The Challenge For the New Administration: Tackle Unemployment
The rising jobless rate greeted Governor Mikie Sherrill at the door as she took office. Early moves have focused on affordability, including an energy rate freeze, but job growth remains the harder problem.
To further complicate things, many of the job losses are in middle-class industries like construction, manufacturing, and trade—jobs that are difficult to replace quickly.
What Comes Next
Some economists see 2026 as a possible turning point. While others predict stagnance.
Health care and education continue to expand, offering some hope, but workers searching elsewhere are stuck in the cycle.
New Jersey’s unemployment rate can’t be ignored. Job growth has slowed, layoffs are spreading, and finding work has become harder than it’s been in years.
If the job hunt feels next-to impossible, it’s not your imagination.
It’s the labor market.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.