Are pocket knives legal in New Jersey if they are not carried outside?

Dude, you can carry pocket knives in New Jersey...

Also no, I imagine it's along the same lines as a hand gun with things like oft autos, you can still legally own one and just not carry it.
 
In NJ it is legal for you to carry a knife, if the planned usage is reasonable and lawful.

If you are planning on walking through a mall with a machete, it would likely be illegal, but if you had it for limbing a branch on your property, a neighbors, or a job then it would likely be legal.
If it was anything other than that, it would be up to the discretion of the officer responding to the call.

I used to do landscaping and while using my Becker BK2, on two separate occasions officers had stopped due to me "wielding a weapon in public". I was using the BK2 to clean dead limbs from the inside of a blue fir (a short needled pine)
Both times the officers came over, inquired what I was doing and, on one occasion, told to make sure I pack it up securely when I was leaving because there were some "nosey people in the area". I was told to have a good day and they went on their business.

Tldr: don't act like a child while brandishing a knife and you Should be ok. Don't flip a knife in public, don't make stabbing motions or threatening motions with your knife and most won't care/notice you have a small folder or fixed blade on you.
In your house, shy of committing a crime, you should be ok.
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Now keep in mind, I am just some jerk on the Internet. Don't use this as proof to your parents that you are allowed to carey a knife.

I don't know the reasoning behind the question, but for a definite answer, call a lawyer. Most of them would give you a quick heads up over the phone.
 
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