Unemployment rate rises to 11-month high

Hawaii’s unemployment rate rose in July to its highest level in 11 months as construction companies tapped the brakes on what had been one of the state’s hottest industries.

The state’s seasonally adjusted jobless rate inched up one-tenth of a percentage point to 3.5 percent after June’s number was revised upward to 3.4 percent from 3.3 percent, according to data released Friday by the state Department of Labor and Industrial Relations. The last time the jobless rate was at this level was August 2015, when it also hit 3.5 percent. The number has been ticking up since dropping to 3.1 percent in February and March.

The number of construction jobs has fallen for two straight months after peaking at 40,600 in May. There were 39,400 construction workers employed in July.

Building permits have been declining throughout the year, according to Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism.

“We knew sooner or later that construction jobs would be reflected in the decrease in building permits,” he said. “When issuing building permits, it takes about a half-year to one year to start construction, so it’s not surprising to see construction jobs decrease.”

Tian is still upbeat about the economy even though July’s numbers showed a higher unemployment rate and fewer nonfarm payroll jobs.

“It doesn’t show a trend because most of the industries are still growing,” Tian said. “The slowdown for the month actually happened in just three industries: professional and business services, state government and construction. We still have one of the lowest unemployment rates in the nation.”

Total nonfarm payroll jobs last month decreased by 400, to 650,800, but still were up by 14,100, or 2.2 percent, over the past year. The nonfarm payroll jobs figure includes people who might hold multiple jobs but doesn’t include people who are self-employed.

For July, Hawaii’s unemployment rate remained the sixth lowest in the country behind South Dakota (2.8 percent), New Hampshire (2.9 percent), Nebraska (3.1 percent), North Dakota (3.1 percent) and Vermont (3.2 percent).

The state’s lowest unemployment rate dating back to January 1976 — the oldest available data on the U.S. Labor Department website — was 2.4 percent, achieved from October through December 2006 and May through September 1989.

The U.S. unemployment rate held steady at 4.9 percent in July.

Among the payroll jobs, the largest loss last month was in professional and business services, down 900. Most of the drop was in the administrative and support sector. Construction was down 900 jobs. Government employment fell by 700 jobs, largely as a result of seasonal fluctuation at the Department of Education.

The largest increases came from the leisure and hospitality industry, which rose by 1,400 jobs, and educational and health services, up 300.

In another measure of the Hawaii economy, the state’s labor force, which includes people who are employed and those who are unemployed but actively seeking work, fell to 684,300 last month from 685,600 in June.

There were 660,650 people employed in July, down from 662,550 the previous month, while the number of unemployed increased to 23,650 from 23,050.

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

The unemployment rate decreased in all four major counties from the previous month. 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 variations such as the winter holiday and summer vacation seasons.

Honolulu County’s rate fell to 3.1 percent from 3.7 percent, Hawaii County’s rate declined to 4.6 percent from 5.1 percent, Kauai County’s rate dropped to 3.5 percent from 4.1 percent and Maui County’s rate slipped to 3.6 percent from 3.9 percent.

Within Maui County, Maui’s jobless rate fell to 3.4 percent from 3.6 percent, Molokai’s rate tumbled to 9.3 percent from 11.6 percent and Lanai’s rate dropped to 6.7 percent from 7.6 percent.