Hawaii’s unemployment rate dropped for the third consecutive month to provide further evidence of continued strength in the state’s labor market.
The seasonally adjusted jobless rate fell one-tenth of a percentage point in October to 3.2 percent, matching its lowest level since April and May, according to data released Thursday by the state Department of Labor and Industrial Relations. The low for this year was 3.1 percent in February and March.
For the U.S. the unemployment rate for October was 4.9 percent, down from 5 percent the previous month.
“The (Hawaii) numbers are indicating that our labor market is still doing wonderful,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “You can see that from a few indicators. The labor force in October is the highest monthly number ever, and the employment is also the highest monthly number ever. The payroll job count for October is the same as September and is also the highest ever.”
The state’s labor force, which includes people who are employed and those who are unemployed but actively seeking work, rose to 692,800 from 687,700 in September.
There were 670,950 people employed in October, up from 665,100 the previous month, while the number of unemployed fell to 21,850 from 22,600.
Total nonfarm payroll jobs were unchanged from the previous month and remained at a record 654,200. That is up 14,000, or 2 percent, over the past year. The leisure and hospitality sector had the largest job gain, up 1,800, while the yearlong-strong construction sector added 400 jobs. Construction jobs are up 7 percent, to 39,400 from 36,900 in October 2015.
Educational and health services had the largest drop in jobs at 1,100, with the majority occurring in health care and social assistance.
“The increase in jobs is being driven by two industries: construction and tourism,” Tian said.
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 state’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.
“We expect the (average) unemployment rate will be at about 3.3 percent for the year,” Tian said. “It should be flat at 3.2 or 3.3 percent for the rest of the year.”
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 fell in two of the four major counties and was steady in the others. Honolulu County’s rate declined to 2.9 percent from 3 percent the previous month, and Maui County’s rate dipped to 3.3 percent from 3.4 percent. Hawaii County’s rate held at 3.7 percent while Kauai County’s rate remained at 3.3 percent.
Within Maui County, Maui island’s jobless rate fell to 3.1 percent from 3.2 percent while Molokai’s rate jumped to 10 percent from 7.5 percent and Lanai’s rate rose to 4.1 percent from 4 percent.
The state’s underemployment rate, which takes into account “discouraged workers” who are working part time when they would prefer to be working full time, continued to improve. In the third quarter it was 5.1 percent compared with 5.4 percent in the second quarter and 5.6 percent in the first quarter. For the U.S. the rate was 4.9 percent in the third quarter, 5.4 percent for the second quarter and 5 percent for the first quarter.
“We are improving, but the U.S. improved faster during the quarter,” Tian said.