State unemployment rate inches up to 1-year high of 2.2%

Hawaii’s unemployment rate ticked up in September to a one-year high of 2.2 percent amid further evidence that the state’s economic growth is slowing.

Previous signs of a slowdown have come from the state’s inflation-adjusted gross domestic product and personal income — both of which are below Hawaii’s 30-year average growth rate.

Nonfarm payroll jobs fell by 2,500 from the previous month as the state government workforce fell by 2,600 positions, primarily due to the release of primary election workers, according to data released Thursday by the state Department of Labor and Industrial Relations.

“The unemployment rate is moving up as we projected,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “This is more consistent with other economic indicators showing our economic growth is slowing down. The unemployment rate is still very low, which indicates our labor market condition is healthy.”

The jobless rate, which is the lowest in the nation, had been at 2.1 percent for the three previous months after dipping to an all-time low of 2 percent in April and May. It had not been as high as 2.2 percent since September 2017. The U.S. unemployment rate is 3.7 percent, the lowest since 1969.

“Our economy is growing at a slower than average pace,” Tian said. “Our economic growth was 1.8 percent a year for the past 30 years. The first quarter economic growth rate was only 1 percent. We expect the low growth rate will last for the rest of the year and may go into next year. We expect the unemployment rate will increase next year to 2.5 percent.”

The number of people in the labor force, which includes those who are employed, those who are unemployed but actively seeking work and those who are self-­employed, slipped in September to 686,800 from 687,350 the previous month. Those employed dropped to 671,750 from 672,750 while those unemployed rose to 15,050 from 14,650.

The labor force data are compiled from a telephone survey of households, while a separate mail survey of employers calculates the nonfarm payroll jobs, which includes people who might hold multiple positions.

The unemployment rate rose in the state’s four major counties. 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 increased to 2.4 from 2.1 percent, Hawaii County’s rate rose to 3 percent from 2.7 percent, Kauai County’s rate jumped to 2.9 percent from 2.4 percent and Maui County’s rate rose to 2.5 percent from 2.1 percent. Within Maui County, Maui island’s rate rose to 2.3 percent from 2 percent, Molokai’s rate increased to 6.8 percent from 5.8 percent and Lanai’s rate rose to 3.4 percent from 2.2 percent.