New Jersey loses 25,600 jobs in July as unemployment rate dips slightly
Preliminary data shows a sharp drop in nonfarm employment across Morris, Essex, and Passaic counties despite a small decline in the state unemployment rate.
New Jersey lost an estimated 25,600 nonfarm jobs in July according to preliminary data released by the New Jersey Department of Labor and Workforce Development. The figures are based on estimates from the U.S. Bureau of Labor Statistics and show total nonfarm employment at approximately 4.36 million jobs for the month. State officials have cautioned that the size of this specific monthly decrease is likely overstated, suggesting the actual drop may not be as dire as the initial numbers indicate.
Employment figures revised downward
The report also revealed that employment losses in the previous month were considerably worse than initially believed when June figures were revised sharply downward. The state had originally estimated that New Jersey lost just 300 jobs between May and June, but the revised figure now shows a loss of 4,200 jobs during that period. When comparing the current data to July 2025, the state is now down 19,600 nonfarm jobs year over year according to these preliminary estimates.
The private sector accounts for an even larger decline with a 20,000-job drop compared to the same time last year. This significant loss in private employment was partially offset by a small increase of 400 jobs in government employment over the twelve-month period. The divergence between payroll and unemployment figures is common because they are derived from separate surveys that can move in different directions.
Sector breakdown reveals broad weakness
July's job losses were spread across much of the economy, with professional and business services leading the monthly decline by shedding 13,400 jobs. The leisure and hospitality sector followed closely with a loss of 7,300 positions, while private education and health services lost 2,700 jobs during the month. Construction shed 1,300 jobs, other services declined by 1,100, and financial activities fell by 900 in this period of economic contraction.
Only three of the nine private-sector categories posted monthly gains despite the overall negative trend. Trade, transportation, and utilities added 600 jobs, while both manufacturing and information sectors each gained 100 positions. Government payrolls increased by 300 jobs in July, providing a small counterbalance to the losses seen in other areas of the economy.
The year-over-year picture shows similar weakness across multiple industries beyond just the monthly fluctuations. Leisure and hospitality employment is down 12,800 jobs compared to last year, followed by trade, transportation, and utilities which lost 8,000 positions. Professional and business services are down 7,000 jobs annually, while construction has lost 4,900 jobs over the same period.
Information sector employment has fallen by 4,100 jobs year over year, and manufacturing is down 3,800 positions compared to July 2025. Financial activities saw a decline of 3,300 jobs, and other services lost 2,500 positions in the twelve-month span. These figures point to broader weakness in the labor market that extends beyond what might be an anomalous single month.
Unemployment rate moves in opposite direction
Despite the significant loss of payrolls, New Jersey's unemployment rate declined slightly from 4.5 percent in June to 4.4 percent in July. This represents a drop of 0.1 percentage point even as the state lost thousands of jobs according to the seasonally adjusted data. The discrepancy between falling employment numbers and a lower unemployment rate highlights the complexity of labor market statistics.
The seasonally adjusted total nonfarm employment stood at 4,357,600 jobs following the July decline. Recent headlines have cited major employers downsizing their New Jersey operations or leaving the state altogether, which may be contributing to these trends. Residents in the district are seeing these shifts as businesses adjust their workforce levels amid changing economic conditions.
The data was released on August 20, 2026, and serves as a preliminary look at the state's labor market performance for the month. Officials continue to monitor the situation closely as they assess whether the July drop represents a temporary statistical anomaly or a deeper trend. The revised June numbers suggest that the economic picture may have been deteriorating for several months before this latest report.
For residents in Morris, Essex, and Passaic counties, these numbers reflect a challenging environment where job losses are occurring across diverse sectors. The loss of 25,600 jobs in a single month is a significant event that impacts local communities and businesses throughout the region. State officials will likely continue to analyze these trends as more detailed data becomes available in future reports.
Questions residents are asking
Did the unemployment rate go up or down despite the job losses?
The unemployment rate actually declined slightly from 4.5 percent in June to 4.4 percent in July even though the state lost 25,600 jobs. This happens because payroll and unemployment figures come from separate surveys that can move in different directions.
Which industries lost the most jobs in July?
Professional and business services led the decline with 13,400 fewer jobs, followed by leisure and hospitality which lost 7,300 positions. Private education and health services also saw significant losses of 2,700 jobs during the month.
Are these job loss numbers final?
These are preliminary estimates based on data from the U.S. Bureau of Labor Statistics, and state officials have cautioned that the July decrease is likely overstated. The June figures were also revised sharply downward after initial reports showed much smaller losses.
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