Fed says NJ can expect uneven 2026
By: Daniel Munoz
NorthJersey.com
USA Today Network - New Jersey
..... New Jersey has managed to escape the worst of 2025's economic woes - from tariffs to inflation and a labor market upheaval spurred by artificial intelligence - through economic quality of life may be uneven for many residents for at least the next year, [2026] New York Federal Reserve President John Williams said.
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Still, the Garden State is wellposied to ride out an economy in 2026 that's in a much better position than previously feared at the start of President Donald Trump's second term, Williams said December 15 [2025] during an event hosted by the New Jersey Bankers Association at the Liberty Science Center in Jersey City.
..... In New Jersey "you have financial services, you've got pharmaceuticals, you're got technology, you've got film and entertainment, and you've got manufacturing and trade," Williams told NorthJersey.com in an interview after the event.
..... Inflation has been a setback in recent years for "millions and millions of households" who have grappled with the costs of frustration, housing and heath care, he told NorthJersey.com .
..... Even today [12/15/2025] "they have seen the prices rise of the things that they buy,
whether it;s food, whether it's the rent they have to pay, have gone up significantly over the past five or six years,"Williams said.
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"that is a very challenging situation where you're deciding 'where I am going to spend my money given all the different things you needs to pay for?'" That's going to take time to even out, Williams said, and may last longer than 2026.And the Garden State - has seen signs of unemployment rate - has seen signs of a cooling labor market, Williams said.
..... "There's been a hesitancy by businesses to hire too much because you may wish you hadn't, and also a hesitancy to lay off workers because you may wish you needed those employees," he said, characterizing the economy as "low-hire, low-fire."
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Housing costs are high and continue to be a problem that could take time to resolve, Williams said, especially as efforts to increase supply rune into competition interest in local communities.
..... The Federal Reserve, typically referred to as the U.S. central bank, cut interest rates last week [12/11/2025] for the third time this year [2025] in a bid to bring inflation down to its 2% target, but suggested a high bar for interest rate cuts in 2026.
..... The rate cut came amid a bid by public elected officials to pursue an affordability agenda, which hung over the heads of New Jersey governor candidates - Democrat Mikie Sherrill and Republican Jack Ciattarelli - and helped hand the White House back to trump.
..... Trump has exerted immense pressure on the Federal Reserve to slash interest rates.
Slowing economy, job losses, soaring debt amid tariffs
..... Amid on-gain, off-again tariffs by the White House, the numbers that have been released point to a slowing economy, including nationwide job losses, soaring personal debt, slowdowns in hiring and cratering consumer sentiment.
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"Affordability remains a primary concern in this region given the high cost of living but that's in part a function of a strong economy - a Catch-22," Robert Scott, an economist at Monmouth University in West Long Branch, told NorthJersey.com earlier this month. [12/2025] "If you want to live where there are jobs, decent roads, schools,etc., it has high costs."
..... But the efforts of Trump's tariffs has been :muted," said Williams, who was recently reappointed for anther five-term that begins in 2026.
..... Many of the tariffs that Trump announced in April [2025] have been negotiated to a more manageable 15% to 20% with U.S. trading partners, Williams added, while companies have found ways around the tariffs, and businesses stockpiled on their inventory ahead of Trump's inauguration in January. [2025]
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"Uncertainly has come down," Williams told the banking event attendees. "Businesses are doing what they're very good at. They're figuring out how to adjust."
NJ incomes rising but unemployment rate a concern
..... Specific to New Jersey, "the factors that may have slowed things this year [2025] ... those probably are diminishing," he told reporters in a separate press conference after the event.
..... New Jersey's median household income has been on the rise form over $85,000 before the COVID-19 pandemic to $103,500 last year, [2024] Monmouth University's Scott noted.
..... Tax collections have increased, Scott said, and New Jersey;s unemployment rate, while rising, is at 5.2%. and the 2026 FIFA World Cup is expected to be an economic boom for the state, Scott said.