NJ Well Prepared For Economic Slowdown, Report Says

NEW JERSEY — New Jersey is in a strong position to weather post-COVID inflation and other economic problems heading into 2023, according to a report from a Wall Street credit-rating agency issued this month.

Fitch Ratings recently reviewed all 50 states' budgets and finances and issued the report.

"States are well positioned for slower growth, as a result of generally prudent fiscal choices made over the last two fiscal years,” said Fitch Senior Director Karen Krop.

The health and resiliency of state budgets was a major concern among economists this year, among an economic slowdown over the first half of 2022, noted NJ Spotlight in its analysis of the Fitch report this week.

Fitch noted, "All 50 states have enacted budgets as fiscal 2023 gets underway, an improvement from pre-COVID dynamics thanks largely to a second year of surging revenues ... Slower economic growth and rising inflation do pose some downside risk. The enacted budgets consider potential economic and geopolitical headwinds."

Surplus And Low Unemployment Help NJ Prepare

The Fitch report cited New Jersey's $6.8 billion surplus in the $50.7 billion 2023 budget approved in June, NJ Spotlight said in its analysis of the full report, available for download here.

Besides a health budget surplus, New Jersey currently has low unemployment, at 3.7 percent.

Most states will be in a "much better position" to handle a downturn in 2023 due to higher revenues, the report notes, even as the country's gross domestic product declines.

NJ Spotlight noted a caveat in the report: "However, the report also listed New Jersey among a small group of states that still owe the federal government money after taking out low-interest loans to cover unemployment benefits during the worst months of the pandemic."

Read more from Fitch here.

Read more from NJ Spotlight here.

Read a related story about the report on Bloomberg here.