"We need to change our mindset, we have to shake off the pandemic fatigue that we all feel," Murphy said Monday during a news conference in Trenton.
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Takeout and outdoor dining may continue past 10 p.m., Murphy, a Democrat, said. Another change allows restaurants to seat tables closer than 6 feet (2 meters) apart if they erect a barrier. He also said that all indoor interstate athletic events will be prohibited.
"This is not forever and always. We basically have a six-month window to beat the virus into the ground," he said.
Bar and restaurant owners say they have taken a lot of precautions, but are bracing themselves for cold weather and even more restrictions.
Valerie Fischer watched the governor's announcement outside her bar, Tom Fischer's Tavern in Haddon Township.
"It may be the first step to another shutdown. Hopefully not," she said.
For restaurants that have finally seen a decent turnout at their socially-distanced bars, like Keg and Kitchen in Haddon Township, it's frustrating to turn people away.
"It's been a crazy year for everybody. It's very difficult to run a business this way," said co-owner Kevin Meeker.
"We're not exactly looking forward to them but we understand where they're coming from," said Barry Gutin, the co-owner of Cuba Libre in Atlantic City and Philadelphia.
At Cuba Libre, Gutin says they have a number of protocols in place, like temperature and health screenings, contact tracing, and personnel that go around sanitizing dining spaces after every use.
"It's tough enough at 25% capacity, it's gonna make it that much more difficult not having the hours to get people in and through the restaurant," said Gutin.
At the Black Horse Diner, owner Ray Kucuk is glad he has a large tent set up for outdoor dining.
"We're gonna use the tent as long as we can, but then when it gets cold, then we're out of luck," said Kucuk.
The new restrictions come as the coronavirus rate of infection and the number of cases climbs higher in New Jersey and across the country.
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Over the past seven days, an average of about 2,000 people per day have been infected by the virus, up from a rate of about 370 per day in August.
Murphy has said the state is entering a "second wave" of the outbreak, which has led to a death toll of 14,629 people since the pandemic began.
Health officials have said that indoor settings make it easier for the virus to spread compared with outdoors, and Murphy has long promised to return to closures if the virus caseload spiked again.
During the hours they are allowed to be open, bars and restaurants will still be subject to indoor dining restrictions limiting capacity to 25%, a restriction that many businesses and Murphy's political rivals say hurts their bottom line.
On Monday, Murphy also announced all interstate games and tournaments for indoor youth sports will be prohibited beginning Thursday.