Hawaii’s unemployment rate fell for the third straight month and dipped to 13.1% in July even as the state grappled with a surge of coronavirus cases that kept the tourism industry in a virtual lockdown.
But economist Carl Bonham doesn’t see the drop as a precursor to a significantly improved outlook for the state.
“Obviously it’s way better than 20%, but 13% unemployment is still 10 percentage points higher than where we were in December. And we’re still talking about 80,000 people who don’t have work,” said Bonham, executive director of the University of Hawaii Economic Research Organization and a member of both the state Council on Revenues and the House Select Committee on COVID-19.
The seasonally adjusted jobless rate declined from a revised 13.4% in June and showed continued improvement from 23.5% in May and the all-time high in April of 23.8%, according to data released Thursday from the state Department of Labor and Industrial Relations.
Statewide, the number of people employed rose by 5,450, to 551,750, while the number of unemployed declined by 1,250, to 83,250.
Bonham said the unemployment rate would have been much higher except that there were nearly 30,000 fewer people in the labor force than a year ago because they either got discouraged and stopped looking for work or were afraid of contracting the virus. That reduced labor force number made the unemployment rate look better, he said.
When UHERO released its second-quarter state economic forecast in May, it projected that the base case for Hawaii’s unemployment would be a peak of 25.9% in the third quarter before decreasing to 18.8% in the fourth quarter.
Bonham said Thursday that those numbers were too high because they were based on incomplete and inaccurate data. He said UHERO didn’t have the April, May and June unemployment numbers at that time and had to base its forecast on initial unemployment claims. It turns out now that one-third of those unemployment claims were either fraudulent, invalid or duplicates, he said. The state Labor Department reported Thursday that 94,084 out of 272,240 claims that have been filed so far statewide were invalid.
“That misled us to thinking that 200,000-plus people lost their jobs when in fact the number was substantially lower,” he said.
The Labor Department said since the onset of the COVID-19 pandemic on March 1 that it has paid out about $2.83 billion in unemployed benefits for approximately 2.7 million weeks that were claimed. More specifically, the agency said it has paid 167,870 claims out of the 272,240 claims filed statewide. There were 10,286 claims requiring Labor Department action as of Wednesday.
Bonham called the jobless rate “backward looking” because he said when the unemployment survey was taken in the first half of July that the surge in COVID-19 cases had not occurred yet in Hawaii. He said how the state labor market fares for the rest of the year depends on the virus.
“You have offsetting forces going on,” he said. “You have the fact that the local economy was sort of gradually getting back to some degree of normal, and now you have more virus spread on Oahu and people reacting to that with additional restrictions. Since it’s not clear whether you’ll have tourists back on Oahu anytime soon, I don’t see much change for the rest of the year. It wouldn’t surprise me if we end the year 2 percentage points higher (in the unemployment rate) than we are now or 2 percentage points lower.”
The Labor Department said 5,536 people filed initial claims for unemployment benefits for the week ending Aug. 15, an increase of 444.3% from a year ago. On a one-month scale, it reported that initial claims continued to contract and dropped 3.8% from June. But weekly claims continued to rise and grew 2.5% as establishments remained closed due to COVID-19.
Nonfarm payroll jobs, which are calculated from a mail survey of employers and are a better indicator of job growth because of a larger sample size, rose by just 200 in July from the previous month but were down 105,500 year over year. The leisure and hospitality sector lost 4,600 jobs from June, the most of any category.
The unemployment rate improved in the state’s four major counties in July from the previous month. 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 jobless rate fell to 11.1% from 12.2%, Hawaii County’s rate fell to 12.8% from 13.2%, Kauai County’s rate dropped to 18.7% from 19.4% and Maui County’s rate declined to 21.3% from 21.6%. In Maui County, Maui’s rate fell to 22% from 22.3%, Molokai’s rate dropped to 7.9% from 9.6%, but Lanai’s rate rose to 4.8% from 3.6%.
NO PLACE BUT HOME
Hawaii’s seasonally adjusted unemployment rate for each month this year:
Source: Hawaii Department of Labor and Industrial Relations
VIRTUAL JOB FAIR PLANNED
Mayor Kirk Caldwell announced Thursday that the Office of Economic Revitalization will host a City and County of Honolulu Virtual Job Fair website for temporary contract employment with the City and County of Honolulu. The announced jobs are for clerical/customer service, entry professional and specialty positions.
Job seekers can view the available jobs and apply online at www.honolulu.gov/jobfair. Applications for the positions must be received by Aug. 31. For questions related to the Virtual Job Fair, contact Steve Terada of the Office of Economic Revitalization at 723-7682.
Individuals unable to access the website can schedule an appointment to use the computers at the Department of Community Services American Job Center at 1505 Dillingham Blvd, Suite 110. Contact the American Job Center to schedule an appointment at 768-5701 or email AJCH@honolulu.gov.