Hawaii unemployment rate holds at 2.7%

Hawaii’s unemployment rate remained steady at 2.7% in September, but the labor force shrank to its lowest level in nearly six years.

The seasonally adjusted jobless rate matched August’s number after holding at 2.8% for five straight months, according to data released Thursday by the state Department of Labor and Industrial Relations. Hawaii has the fifth-lowest unemployment rate in the country and has been under 3% for 38 months.

“The numbers indicate that the labor market has been stable, and so is our economy,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. ” We see the initial unemployment claims decreased by 3.5% through the middle of October. That is a good sign in the labor market. The people leaving the labor force might be those who are self-employed.”

Hawaii’s labor force, which includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed, fell for the ninth month in a row to 660,400 from 661,050 in August. It was the lowest number in the labor force since there were 660,487 in January 2014. Labor force data is compiled from a telephone survey of households.

Those employed also declined for the ninth straight month in falling to 642,650 from 643,050. It was the fewest people employed since 643,443 in January 2015.

The number of people unemployed dropped to 17,750 from 18,000 and has fallen for five straight months.

The U.S. unemployment rate, meanwhile, fell to a 50-year low of 3.5% in September after holding at 3.7% for three months in a row.

Tian said it’s possible that Hawaii’s population, which has decreased two years in a row, may be partially responsible for the shrinking labor force. The state’s population for 2019 won’t be available until mid- December, but the state lost 3,712 people in 2018 and 3,902 people in 2017.

He said given that the labor force has been declining, people either gave up looking for jobs or moved out of state.

“We don’t have evidence on (moving out of state) yet since 2019 population data is not available at this time, but that is a possibility,” Tian said. “In 2018, Hawaii had a population of 1,420,491. In 2016, Hawaii’s population was 1,428,105.”

Nonfarm payroll jobs, which are calculated from a mail survey of employers, rose by 4,500 in September from the previous month. That number would have been lower except for an increase of 2,400 government jobs due to a biennial seasonal function of not needing to release primary election workers from the prior month. Among industries, the construction sector added 1,000 jobs to top all of the categories.

The unemployment rate rose in all four of the state’s major counties. State and national labor force data is adjusted for seasonal factors, but the county jobs data is not seasonally adjusted and thus does not take into account variations such as the winter holiday and summer vacation seasons.

Honolulu County’s rate increased to 2.6% from 2.4%, Hawaii County’s rate edged up to 3.5% from 3.4%, Kauai County’s rate rose to 2.7% from 2.5% and Maui County’s rate increased to 2.7% from 2.4%. Within Maui County, Maui’s rate increased to 2.6% from 2.3% while Molokai’s rate fell to 5.6% from 6.1% and Lanai’s rate dropped to 1.6% from 2.4%.