New Jersey Economy: Pharma, Ports, and the NYC Halo

New Jersey has one of the larger state economies in the United States, usually ranked in the top ten by GDP — the dollar value of everything a place makes and sells in a year. The New Jersey economy is shaped by two big forces: its own deep base of pharma, finance, and ports, and its position next to New York City, which pulls jobs, residents, and tax dollars across the Hudson every day.

This is a plain-English tour. For the national picture, see The State of the U.S. Economy and the Economy hub.

How big is the New Jersey economy?

For example, recent state GDP for New Jersey has run around $780 billion, according to the Bureau of Economic Analysis. Population is roughly 9.3 million, per the U.S. Census Bureau. New Jersey is the most densely populated state in the country, with major economic centers in the north (Newark, Jersey City) and south (Camden, Atlantic City).

The biggest industries

New Jersey's economy is unusually concentrated in a few high-value sectors:

• Pharmaceuticals and life sciences — Johnson & Johnson, Merck, Bristol-Myers Squibb, and many other large pharma companies have significant operations in the state.
• Finance — Jersey City has become a major back-office and trading hub for Wall Street firms; large insurance companies like Prudential are based in Newark.
• Ports and logistics — the Port of New York and New Jersey is the largest port complex on the East Coast and the second-largest in the country, and most of it physically sits in New Jersey.
• Chemicals and refining — northern New Jersey hosts a long-standing chemical and oil-refining cluster.
• Healthcare — major hospital systems and academic medical centers employ huge numbers of workers across the state.
• Tourism — the Jersey Shore, Atlantic City, and proximity to NYC drive a large hospitality sector.
• Agriculture — the "Garden State" still produces blueberries, cranberries, peaches, and tomatoes in serious volume.

Jobs and wages

New Jersey labor data is published by the New Jersey Department of Labor and Workforce Development, with national-level numbers from the Bureau of Labor Statistics. For example, New Jersey's unemployment rate has typically run close to or a bit above the national average. A large share of New Jersey workers commute into New York City, so the state's job picture is partly tied to NYC.

The New Jersey minimum wage is well above the federal floor and rises on a scheduled path. Specific industries — small businesses, agricultural workers, and tipped workers — have separate, lower minimums.

Taxes in New Jersey

New Jersey has a graduated state income tax, with one of the highest top rates in the country on very high earners. Property taxes in New Jersey are among the highest in the United States, partly because so much of local government and school funding comes from them.

The state sales tax rate is 6.625%, with limited local additions in a few designated zones. Some products — clothing, most groceries, prescription drugs — are exempt.

State tax forms and rules live at the New Jersey Division of Taxation. You can read more about how sales tax works in our glossary.

Cost of living

Cost of living in New Jersey runs well above the national average, driven mostly by housing and property taxes. Northern New Jersey commuter suburbs of NYC are among the most expensive zip codes in the country. South Jersey and parts of the Pine Barrens are much more affordable.

The federal government tracks region-specific Consumer Price Index data through the BLS New York-New Jersey region, and HUD publishes Fair Market Rents for every county at HUD User.

The NYC halo

A huge share of New Jersey's economy effectively lives in New York City's gravity well. Hundreds of thousands of New Jersey residents commute across the Hudson every workday into Manhattan. Their income is taxed by both states (with a credit), and their spending shows up in NYC stores and restaurants. When New York's financial sector booms or slows, northern New Jersey feels it directly.

How does the New Jersey economy fit into the national picture?

New Jersey is unusual: very small geographically, very densely populated, and heavily concentrated in pharma, finance, ports, and chemicals. It is one of the wealthiest states by median household income, but also one of the most expensive places to live. Population growth has been slow but positive, with most net inflows coming from international immigration rather than from other U.S. states.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and the New Jersey Division of Taxation for the most current data.