TRENTON — In a mixed bag of economic news that was challenged by the Christie administration, New Jersey's unemployment rate inched closer to 10 percent even as it added 5,300 jobs in August, according to figures released today by the state Labor Department.

The unemployment rate rose to 9.9 percent last month, up slightly from 9.8 percent in July and nearly two percentage points higher than the national average of 8.1 percent.

The state’s unemployment rate has been climbing since January, when Gov. Chris Christie began boasting of a "Jersey Comeback," and is at its highest level in three decades. Only California, Nevada and Rhode Island have rates above 10 percent.

But Charles Steindel, the chief economist for the Department of Treasury, questioned the new unemployment figures and said they were at odds with signs of economic recovery seen around the state.

He said the household employment survey used by the federal Bureau of Labor Statistics to determine unemployment is less reliable than a payroll survey of employers, which showed a gain of 50,000 jobs in the past year, compared with a loss of 47,000 in the household survey.

"These are two totally divergent figures, the latter of which simply does not match other metrics of growth in the state," Kevin Roberts, a spokesman foer the governor, said in a news release.

Democrats quickly pounced on the new unemployment figures.

"Clearly, the numbers indicate that New Jersey’s economy is headed in the wrong direction and that this administration’s policies have failed," state Sen. Paul Sarlo (D-Bergen), chairman of the Senate Budget Committee, said.

Or as Senate President Stephen Sweeney put it: "This feels like Groundhog Day. Every month we hear the same bad news, follwed by the same inevitable spin."

Roberts said Sarlo and other critics were cherry picking figures for political gain and ignoring the broader, encouraging trends.

He said the state has seen job growth in 10 of the last 12 months, adding 86,200 private sector jobs since February 2010 and filling more than one in three jobs lost in private industry in the recession.

Patrick O’Keefe, director of economic research at J.H. Cohn in Roseland, said although the state has added jobs, only about 400 more people are working now than a year ago. He said it was a sign many have stopped looking and are not accounted for in the unemployment rate.

"If those people were counted, the rate would be 10.3 percent," O’Keefe said.

In 2009, when former Gov. Jon Corzine made a similar argument, Christie — the Republican gubernatorial candidate at the time — dismissed the Democrat’s explanation.

Watch Bloustein School Dean: NJ Economy Moving in Right Direction on PBS. See more from NJToday.

"Look, unemployment is up again this month," Christie told The Star-Ledger at the time. "I don’t know how when unemployment continues to go up that you can say that’s a success. That shows the low standards the governor has set for economic success in the state."

In addition to the August figures, the Bureau of Labor Statistics revised its July job unemployment numbers, showing the state lost 40 percent fewer jobs than initially reported, though the 9.8 percent unemployment rate remained unchanged.

The federal government originally reported that the state lost 12,000 jobs in July, revising that to 7,300.

"As was the case for March, the initial report of a very marked drop in jobs in July proved to be overstated," Steindel said in a news release, "and after the one-month interruption, job growth in New Jersey in August returned to the steady positive pace of the last year."

The largest employment gains for August took place in professional and business services, which added 6,100 jobs. They were supplemented by growth in trade, transportation and utilities, which added 2,900 positions.

Manufacturing jobs suffered the most in July, losing 2,700 jobs.

"Overall, New Jersey’s job market turned in a sub-par month," O’Keefe said.

He said indicators showed a historically bad employment climate, with less than 60 percent of eligible residents with a job, the lowest rate since 1983.

The job figures came in the wake of other disappointing economic news for the administration. On Tuesday, Standard & Poor’s, a major rating agency, lowered the state’s credit outlook from stable to negative and warned of a further downgrade if Christie’s revenue projections failed to materialize.

Christie is banking on more than 7 percent growth in revenue to cover $31.7 billion in spending and to pay for the first phase of a tax cut. But the Legislature’s top budget officer warned on Wednesday revenue will have to grow by a robust 8.2 percent to cover revenue the shortfall.

"Right now there are red flags and we need to be cautious," Joel Naroff, of Naroff Economic Advisors, said. "But it’s still early in the fiscal year and there is plenty of time to make this up."

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Related coverage:

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