Hawaii jobless rate dips to 6.1% as thousands give up searching

Hawaii’s unemployment rate fell to 6.1 percent in August from 6.3 percent in July, reaching its lowest level in more than three years, the state reported Thursday.

However, the report also showed that there was a decline in the overall labor force, suggesting that the drop in the unemployment rate was partly due to some discouraged job seekers simply giving up their searches.

There were 38,900 unemployed in August, down from 40,850 in July. Meanwhile, the total labor force fell to 640,250 from 644,100 during the same period, according to the report from the state Department of Labor and Industrial Relations.

"People who leave the labor force are no longer counted as unemployed. That’s one of the reasons you see a drop in the unemployment rate," said Carl Bonham, executive director of the University of Hawaii Economic Research Organization. "When you see the labor force shrink by 3,850 people, that’s not a good sign."

Nationally, the unemployment rate fell to 8.1 percent in August from 8.3 percent in July.

While Hawaii is several percentage points below the national average using the standard definition of unemployment, it doesn’t compare as favorably under a broader measure that takes into account those who have dropped out of the workforce and people who are working part time but would rather be working full time. Hawaii’s rate is 14.8 percent when the underemployed and discouraged are counted, only slightly below the national average of 15.3 percent.

"That’s a more meaningful comparison," Bonham said. "Moving from 6.3 to 6.1 under the traditional measure isn’t anything to get excited about."

Including the August decline, Hawaii’s unemployment rate has fallen by just 1 percentage point since the peak of 7.1 percent in the summer of 2009. Growth in payroll jobs, which has been running about 1 percent a month over the past few years, has not been strong enough to make a significant dent in the unemployment rate, according to Bonham. UHERO is forecasting the state unemployment rate to average 6.2 percent in 2012 and 5.6 percent in 2013.

While jobs in the tourism sector have returned to pre-recession levels, the same is not true for other industries, such as construction. There were 29,200 people employed in Hawaii’s construction industry in August, compared with an average of 39,100 per month in 2007 at the peak of the last construction boom.

The state and national unemployment numbers are adjusted for seasonal variations, such as teachers returning to work after the summer break.

County data are not seasonally adjusted. The unemployment rate for Hono­­­lulu fell to 5.1 percent in August from 5.6 percent in July. The rate fell to 8.3 percent from 9.2 percent in Hawaii County and to 7.0 percent from 7.7 percent in Kauai County. In Maui County the unemployment rate fell to 6.1 percent from 6.7 percent.

One sign that the slow recovery in Hawaii’s job market may be picking up speed was the number of people filing first-time claims for unemployment benefits. That number over the past month fell to fewer than 1,700 per week for the first time since mid-2008. Also, this week’s Job Quest job fair at the Neal Blaisdell Center drew more recruiters than it had in four years.

Bank of Hawaii was one of several large local employers at the job fair looking to significantly ramp up hiring.

"We’re kind in a big push right now," said Grant Shindo, a BOH corporate recruiter. The bank has openings for 35 to 40 workers in its information technology division and 15 to 20 workers in its Kapolei call center.

"For a long time we were a little short-staffed, and then we got the green light to go ahead and post the jobs. We’re looking to hire immediately," he said.