Hawaii’s unemployment rate fell for the second straight month, dropping a 10th of a percentage point in September to 3.3 percent, according to data released Thursday by the state Department of Labor and Industrial Relations.
Economist Carl Bonham said he wouldn’t be shocked if that number were to keep dropping.
“We wouldn’t be surprised to see the unemployment rate fall below 3 percent before the end of the year,” said Bonham, executive director of the University of Hawaii Economic Research Organization and a UH professor of economics. “Our forecast for all of 2016 was 3.1 percent, which is pretty aggressive. I was surprised with how much it came up the previous few months.”
The state’s seasonally adjusted jobless rate was at
3.5 percent in July. The low for this year was 3.1 percent in February and March.
“The (3.3 percent unemployment rate) is consistent with all the other data in Hawaii’s economy that shows we’re doing pretty well,” Bonham said. “We’ve got continued strong tourism and continued growth in construction activity. There really aren’t any sectors that are significantly dragging down the economy.”
Bonham said the primary reason the jobless rate rose during the summer was that so-called discouraged workers who had quit looking for jobs were pulled back into the labor force because of more jobs being created.
“We’ve got pretty good job growth between 1 percent and 2 percent,” Bonham said. “We’ve been growing jobs for several years now.”
Total nonfarm payroll jobs inched up by only 200 last month to 653,200 from 653,000 in August, but for the past year were up by 15,900, or 2.5 percent. The nonfarm payroll jobs figure includes people who might hold multiple jobs but doesn’t include people who are self-employed.
The construction sector, which has been strong all year, saw a decrease of 300 jobs to 39,100. However, constructions jobs still were up 11.1 percent from 35,200 in September 2015.
Bonham said UHERO’s forecast for construction job growth for all of 2016 was for 11 percent and that these most recent job data are tracking that number.
“Preliminary data that the (federal) Bureau of Labor Statistics and the Department of Labor and Industrial Relations put out on construction jobs in the first half of the year was extremely strong, high double-digit rates — 20 percent in March and 19 percent in April,” he said. “So our forecast is really for some slowing and some downward revision of those numbers.”
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, rose to 687,500 from 684,600 in August.
There were 665,000 people employed in September, up from 661,050 the previous month, while the number of unemployed fell to 22,550 from 23,550.
Hawaii’s lowest unemployment rate since January 1976 — the oldest available data — was 2.4 percent, achieved from October through December 2006 and May through September 1989.
The state’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. 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.
The unemployment rate remained at 3 percent in Honolulu County but fell in the three other major counties. Hawaii County’s rate dropped to 3.7 percent from 4.1 percent, Kauai County’s rate slipped to 3.3 percent from 3.4 percent and Maui County’s rate fell to 3.3 percent from 3.4 percent.
Within Maui County, Maui’s jobless rate held at 3.2 percent, Molokai’s rate dropped to 7.5 percent from 8 percent and Lanai’s rate decreased to 4 percent from 5.8 percent.
