Jobless rate hits 3-year low as labor recovery inches forward

Hawaii’s unemployment rate fell in February for the fourth consecutive month to its lowest level in three years, the state Department of Labor and Industrial Relations reported Thursday.

February’s jobless rate dropped to 6.4 percent from 6.5 percent in January and 6.6 percent in February. The last time Hawaii saw unemployment at 6.4 percent was in February 2009.

Another measure of job market performance reported by the DLIR on Thursday also painted a positive picture of the state’s labor situation. The number of payroll jobs at Hawaii businesses rose by 2,900 in February on a net basis from the same month a year ago.

The biggest increase was in the hospitality sector, which added 4,300 jobs. The business services and financial activities sectors gained 900 jobs each. The biggest job loss was in government, which had 1,200 fewer positions in February compared with a year earlier.

"While we realize that many families are still struggling to make ends meet, we’re hopeful that job gains in multiple sectors will continue as a trend and our overall unemployment rate will continue to fall," said Dwight Taka­mine, DLIR director.

The declining unemployment rate in recent months also has been accompanied by a drop in first-time claims for unemployment benefits. The number of people filing for unemployment insurance for the week ending March 24 fell to 1,749, a 7 percent decline from the same week a year earlier, the DLIR reported.

Unemployment insurance claims have been on a steady decline for the past two years after surpassing 3,000 a week in early 2010.

Hawaii’s unemployment in February compared favorably with the national average 8.3 percent jobless rate.

The statewide and national unemployment data are adjusted for seasonal variations, such as temporary hiring by retailers for the holiday shopping season. The unemployment rates for individual counties is not seasonally adjusted.

The rate in Honolulu County fell to 5.5 percent in February from 5.6 percent in January. It fell to 6.8 percent from 7.1 percent in Maui County, and to 7.9 percent from 8.3 percent in Kauai County.

"The decline in unemployment is pretty consistent with what we’ve seen with the broader economic recovery," said Paul Brewbaker, principal at TZ Economics. "Labor market conditions have been better on Oahu than on the neighbor islands and better in Hawaii than the nation as a whole," he said.

It’s not clear whether Hawaii will ever get back to rock-bottom unemployment rates in the 2-3 percent range experienced between 2004 and 2006 when the economy was booming, Brewbaker said. But Hawaii’s rate probably will run lower than the national average for the forseeable future, he said.

Brewbaker noted that Federal Reserve Chairman Ben Bernanke recently said the central bank would consider a national unemployment rate in the 5 percent to 6 percent range a healthy level. For Hawaii a comparable level would be somewhat lower, according to Brewbaker.

"I would consider 4 percent to 5 percent our sweet zone," Brewbaker said. "But we’re at least a year or two away from that."