"The state has lost 14,000 jobs so far this year, but more arelikely to come," said Hughes, who is the Dean of the BlousteinSchool of Planning and Public Policy at Rutgers University. Hetermed the current situation a relatively mild, "slow-motionrecession," and how it plays out will depend on the financialmarkets.

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"Correcting all of Wall Street's excesses will take aconsiderable amount of time," he said. "Those excesses willcontinue to reverberate in New Jersey," and that reverberationcould come in the form of everything from consumer retrenchment,with sales tax revenues taking a hit as a result, to cutbacks inthe W/D supply chain sector.

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On the positive side, high energy prices "could help regardingdistribution, and the state's geographic position may again becomeour most important factor," Hughes said. "Costs again matter," headded, noting that cost also comes into play as far as the state'slower office costs compared to New York.

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But for now, "fasten your seatbelts," Hughes said. "The economicrough ride will continue."

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Joel Naroff, chief economist for Commerce Bank, agreed that thecost factor on the office side could indeed work to the state'sbenefit once the financial community's mess gets sorted out and itstarts adding jobs again. But for now, "it is a totally insanetime," he said, pointing specifically to the stock market's wildswings. "It is a time of irrational behavior. We're seeingcircumstances change so rapidly that we don't know what to make ofit."

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And as far as the Congressional bailout plan, "failure is not anoption," Naroff said. Expressing some optimism, he noted that "itfinally occurred to world banks, especially in Europe, that thiswasn't a US problem--it is a world problem. We'll get the job done.There will be no instant gratification, it will take time, so thedamage will continue, but these plans will work in the US andaround the world. We're going to get out of this."

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Back home, James Bram, an economist for the Federal Reserve Bankof New York pointed to what he termed coincident economicindicators, actually a combination of factors, showing that NewJersey's economy has been lagging both neighboring New York and thecountry in general. "New Jersey has underperformed for the firsttime in a long time," Bram said. Still, while that performance hasbeen relatively weak, "a lot of states are weaker.

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"There are some rough patches ahead, but this region hashistorically rebounded," he said, noting as well that the NewJersey and New York economies are inextricably linked. And forboth, "there are areas of vulnerability in jobs, in the short term,notably finance and Wall Street."

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And all of the above could last for the rest of 2008 and into2009, Hughes concluded. "It will take a considerable amount oftime."

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