State jobless rate remains at 2.7%

Hawaii’s gradually rising unemployment rate paused in February amid a slowing growth trend that local economists have been forecasting for the state.

The seasonally adjusted 2.7 percent jobless rate last month matched the January number, which was the highest level since February 2017, according to data released Thursday by the state Department of Labor and Industrial Relations.

“The labor market conditions in February are as expected,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “DBEDT forecasted an average annual unemployment rate of 2.7 percent for 2019 in our March 6 release. The unemployment rate will be going up this year and the next few years. We did expect job growth will be slowing down as well.”

Tian said despite Hawaii’s rising unemployment rate that the economy is still healthy. Tourism added the most nonfarm payroll jobs last month of any sector with 1,400 of the overall 1,800 job gains occurring primarily in accommodations and food services.

“With the starting of the Southwest Airlines flights to Hawaii, tourism will be still the driving force for our economy this year,” Tian said.

DLIR’s release of the jobless data comes just 13 days after the January numbers were released. The numbers were released close together because the state Labor Department revises its numbers at the end of each year to reflect updated population data from the U.S. Census Bureau.

The revised data changed what previously had been reported as Hawaii’s lowest unemployment rate ever. The preliminary 2 percent jobless rates for April and May were revised upward to 2.3 percent, meaning the state’s all-time low is instead 2.2 percent, which was reached in October and November.

Final numbers showed that Hawaii had the lowest unemployment rate in the nation for the second year in a row. It was 2.4 percent in both 2018 and 2017. Iowa was second in 2018 at 2.5 percent, and North Dakota was second in 2017 at 2.7 percent. Alaska was last in both 2018 and 2017 at 6.6 percent and 6.9 percent, respectively.

The number of people in Hawaii’s labor force, which includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed, slipped in February to 674,700 from 676,500 the previous month. Those employed dropped to 656,500 from 658,450 while those unemployed rose to 18,250 from 18,000.

Labor force data are compiled from a telephone survey of households, while a separate mail survey of employers calculates nonfarm payroll jobs.

The unemployment rate declined 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 fell to 2.5 percent from 2.7 percent, Hawaii County’s rate fell to 3.5 percent from 3.7 percent, Kauai County’s rate fell to 2.8 percent from 3.0 percent and Maui County’s rate fell to 2.8 percent from 2.9 percent. Within Maui County, Maui island’s rate fell to 2.8 percent from 2.9 percent, Lanai’s rate declined to 0.8 percent from 1.4 percent and Molokai’s rate rose to 4.9 percent from 4.4 percent.