"My guess is we won't be opening capacity for some time now because of the caseload," Murphy said on CNN.
On Friday, capacity at New Jersey restaurants, gyms and health clubs, recreational facilities and arcades, and personal care businesses increased to 50%.
Indoor gatherings increased from a limit of 10 people to 25, while outdoor gatherings went from 25 to 50 people.
"We're watching these variants very closely," Murphy said. "The case numbers are clearly up. We clearly have these variants in our state as we are seeing in New York City. It's a little reminiscent of what happened last spring."
RELATED | New Jersey hospital sets up dedicated site to help teachers get vaccinated
Murphy was asked last week about whether vaccinated people would have to carry around a proof of vaccination, an idea that came under attack by the Republican Governors Association.
Murphy said "that's all politics" and that he would defer to CDC recommendations.
"Do I think it's a crazy idea?" he said "No."
The new capacity limits don't apply to religious services or ceremonies, political events, weddings, funerals or memorial services, which have higher or no limits. Seating at bars is still prohibited.
Outdoor interstate youth competitions also resumed, but the ban on indoor interstate competitions remains in place.
Also, Murphy said in-person visits are now permitted for most long term care residents in New Jersey.
Visitors can see residents indoors -- regardless of either's vaccination status -- under the new state guidelines that follow those issued by the federal CDC on March 10.
RELATED | NJ residents relaxing social distancing measures as COVID cases decline, survey finds
Last week, Murphy said he expected to have all schools open for full-time in person learning by the start of the 2021-2022 academic year.
The state has now distributed more than 3.5 million COVID-19 vaccines, with 1.1 million people fully vaccinated.
Additionally, beginning on Monday, March 29, frontline essential workers in the following categories are also eligible for vaccination:
--Food production, agriculture, and food distribution
--Eldercare and support
--Warehousing and logistics
--Social services support staff
--Medical supply chain
--Postal and shipping services
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