Hawaii outpaces other states for lowest jobless rate

Hawaii easily remained No. 1 last month for the lowest unemployment rate in the country amid a strong economy and an exodus of work-seeking residents to the mainland.

For the third month in a row, Hawaii led the way with a 2.0 percent jobless rate in December. New Hampshire and North Dakota tied for second at 2.6 percent, according to data released Tuesday by the U.S. Department of Labor. Altogether, only seven states have seasonally adjusted unemployment rates under 3 percent. Alaska has the highest jobless rate at 7.3 percent.

Hawaii’s 2 percent rate, which was announced Monday by the state Department of Labor and Industrial Relations, was down one-tenth of a percentage point from the November number, which was revised upward to 2.1 percent from 2.0 percent.

The U.S. unemployment rate in December was 4.1 percent, the lowest since 2001.

Hawaii’s jobless rate is far lower than other states’ because residents leaving for the mainland are shrinking the labor force, tourism is booming and jobs are increasing in the health care and professional services sectors, according to Eugene Tian, chief economist for the state Department of Labor and Industrial Relations.

“People are looking for jobs and are moving to the mainland (and reducing the labor force),” Tian said. “Hawaii had a net loss of 13,537 people to the mainland in 2017.”

He said while tourism, professional services and health care services are doing well, other industries like wholesale, information, financial activities and manufacturing are slumping.

“The people leaving the state are not in those areas that are doing well,” he said. “People can’t find jobs and just give up. That’s why you see the number of employed decrease (down 1,750 in December from the previous month).”

But as residents leave, Hawaii’s job market benefited in 2017 from another record year of visitor arrivals and spending.

“Reflecting the boom in tourism, job count in leisure and hospitality reached record high levels in 2017, 123,000 jobs in July 2017, and 122,400 in December 2017, the third highest in history,” he said.

Tian also said the 70,600 jobs in health care in December was a record, while professional services’ 86,600 jobs in December was the third highest ever, following the peak of 86,800 in September and 86,700 in August.

When Hawaii’s unemployment rate fell to 2.2 percent in October, it marked the first time the state had the distinction of having the lowest unemployment rate in the U.S. since November 2006 when it was at 2.4 percent, followed by Utah at 2.5 percent.

In December 2006 both Hawaii and Utah were both at 2.4 percent.

Hawaii had the lowest — or was tied for the lowest — unemployment rate for all states for every month from May 2004 through December 2006.

Besides Hawaii, states also hitting all-time lows in December since new methodology began in 1976 were California at 4.3 percent and Mississippi at 4.6 percent.

Since its recent peak of 7.3 percent in 2009 during the recession, the jobless rate in Hawaii has been steadily dropping. The last time it was 3 percent was September 2016, and the last time it hit 4 percent was February 2015.

Hawaii, with a gain in nonfarm jobs of 2,100, was one of 10 states where employers added more jobs last month. Three states cut jobs, while employment was virtually unchanged in the other 37 states.