NJ Gov. Murphy: ‘I’m Worried’ about Employment, History Points to Economy Slowing ‘Substantially’

On Friday’s broadcast of CNBC’s “Squawk Box,” New Jersey Gov. Phil Murphy (D) stated that he is concerned about the prospects for employment because there are no historical examples “where the Fed has been this aggressive and the economy didn’t cool substantially.” And he believes the economy will “cool” but not tank “in a very substantial way.”

After Murphy said that he thinks the Federal Reserve needs to stay aggressive, co-host Becky Quick asked, “You said six to 12 months you think we’ll be in a better position, I assume you mean just in terms of inflation and how it’s going on that front. Where do you think we’ll be in terms of employment? You said you are worried about what’s coming. What specifically are you worried about?”

Murphy responded, “I’m worried that I don’t think history gives us one example…where the Fed has been this aggressive and the economy didn’t cool substantially. So, whether that’s a recession, if it’s a recession, how deep a recession, I don’t know. There’s a lot of liquidity on the sidelines. If you just look at our balance sheet, we’ve got a massive surplus, we’ve got a large shadow surplus, we’ve got unspent American Rescue Plan money, bipartisan infrastructure dollars to be spent over five years, other monies coming from the Inflation Reduction Act or the CHIPS Act from the summer. I don’t think our state is different than a lot of other American states. You’ve got that reality with institutions, companies, to some extent, households, all of that leads me to believe that the economy’s going to cool, but I personally don’t see this thing tanking in a very substantial way.”

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