Jobless rate dips to level last seen in 2008

Hawaii’s slow-growth economy is showing dramatic improvement in the unemployment ranks.

The state’s jobless rate declined in October for the third month in a row to hit a six-year low of 4.1 percent, matching its lowest level since the early stages of the recession.

It was the lowest seasonally adjusted jobless rate since July 2008, when it also was 4.1 percent, according to data released Thursday by the state Department of Labor and Industrial Relations. The decline enabled Hawaii to maintain its distinction of having one of the lowest unemployment rates in the country.

Hawaii economists have been calling for stable growth into 2015 as the state’s decelerating tourism industry closes in on its third straight year of record visitor arrivals and spending. The unemployment rate, considered to be a lagging indicator of economic activity, appears to be catching up with the rest of the state’s recovery.

"It’s good news because 4.1 percent is below the natural rate of unemployment for Hawaii, which we believe is about 4.5 percent," said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. "It’s an indication that the labor market is continuing to improve. The low was 2.3 percent, which means we are improving but still have room to grow."

The natural rate of unemployment is the perceived level at which anyone who wants a job can find one, Tian said.

"There is no such thing as zero unemployment because there’s always people changing from one job to another, and there’s new graduates," he said.

Kelsey Niau recently landed a full-time job as a clerk with the city Department of Budget and Fiscal Services. She had been searching for a year for a full-time job that would provide benefits, and will start her new position Dec. 8.

"It was really difficult because the jobs that hire you only want you as part time," the 26-year-old Palolo resident said. "They don’t want to give you benefits and stuff. I (previously) had to get two part-time jobs to pay for my bills."

Hawaii’s recent peak for unemployment was 7.1 percent in July and August 2009 following the recession. The recent low was 2.3 percent in October, November and December 2006. It was stuck at 4.4 percent from April through July before dipping to 4.3 percent in August and then 4.2 percent in September.

The state continues to outperform the U.S. jobless rate, which was 5.8 percent in October, down from 5.9 percent in September.

Martin & MacArthur, which sells Hawaii furniture and personal accessories from koa wood, has been on a hiring spree during the past few months for both its craftsmen workshop in Kalihi and its 12 statewide retail stores, including a new one that will open Dec. 2 in Poipu, Kauai.

"We’re definitely hiring in our retail stores on all four islands — Big Island, Kauai, Oahu and Maui — and have hired probably eight to 10 people in the last four weeks for retail and probably five or six people in the furniture workshop," said Michael Tam, Martin & MacArthur president and chief executive officer. "That doesn’t include the fact that we’re building a new store on Kauai and have hired six people for that store as well."

Tam said the company, which has about 110 employees, is always looking for skilled workers.

"It’s always challenging to find the right people because we’re looking for people who are of a skill set for our production facility as well as our retail stores," he said. "We’re looking right now to hire more people, particularly in our retail stores — full time, not seasonal."

Hawaii’s labor force, which includes those who are employed and others who are unemployed but actively seeking work, rose to a record 667,750 from 665,850 in September, according to the labor report.

The number of people employed rose by 2,150 to 640,150, but many of those were self-employed since Hawaii employers added 2,000 fewer nonfarm payroll jobs in October from the previous month, Tian said.

"When employment increases and payroll jobs decrease, that’s an indication that there are more people self-employed," he said.

Hawaii’s construction industry, which state economists expect to rebound in 2015 after failing to meet expectations this year, had 30,600 employees in October. That represented 800 fewer positions than in September and matched the total in October 2013.

Tian said those construction job numbers can be misleading.

"The decrease in construction jobs may be due to construction companies hiring through employment agencies," Tian said. "Those jobs are not reflected in the construction job numbers because employment agencies are not required to identify their employees by industry."

The unemployment rate is derived largely from a monthly telephone survey of households, while a separate survey of businesses determines the number of nonfarm jobs.

In Hawaii the number of nonfarm payroll jobs rose last month by 6,600 over October 2013. During that 12-month period, the business categories with the largest job increase on a year-over-year basis were leisure and hospitality with 4,300 additional positions.

The state and national labor force data are adjusted for seasonal factors. But the county jobs data are not seasonally adjusted and thus do not take into account seasonal variations such as the winter holiday and the summer vacation seasons.

For the counties, the unemployment rate statewide was flat to down across the islands in October from September.

The rate decreased in Hono­­lulu County to 3.9 percent from 4.0 percent and fell in Kauai County to 4.7 percent from 4.8 percent. The jobless rate remained at 5.3 percent in Hawaii County and at 4.3 percent in Maui County.

Within Maui County, Molo­kai’s jobless rate decreased to 13.9 percent from 15.5 percent, the island of Maui remained at 4.0 percent and Lanai rose to 2.9 percent from 2.5 percent.

Star-Advertiser reporter Kristen Consillio contributed to this report.