Hawaii’s reopening of tourism could not have come at a better time.
The state’s seasonally adjusted unemployment rate reversed course and spiked to a nationwide high of 15.1% in September as nonagricultural jobs plunged 10,700 from the previous month, according to data released today by the state Department of Labor and Industrial Relations.
Tourists began arriving Thursday under the state’s new pre-travel testing program, which allows visitors to bypass the state’s mandatory 14-day quarantine if they have a negative COVID-19 test.
The influx of visitors will help bolster the state’s labor force and improve the economy as more residents go back to work and more hotels, restaurants and other businesses reopen, according to Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism.
“It’s definitely going to improve the economy,” Tian said. “We’ll see the full improvement in November because October is only about a half month (that tourism would have been reopened).”
Tian cites Honolulu Mayor Kirk Caldwell’s second Stay at Home/Work From Home order, which went into effect Aug. 27 and lasted four weeks, as the primary reason for the higher unemployment rate in September.
“(The higher jobless rate) is mainly because of the second lockdown. So September was impacted,” Tian said.
Hawaii is now one of just five states in the country with a double-digit unemployment rate, along with Nevada at 12.6%, California at 11%, Rhode Island at 10.5% and Illinois at 10.2%.
But Tian said he sees the economy improving heading into the end of the year.
“I think this is the beginning,” he said. “People are watching to see what’s happening. The main impact will start in November, and we’ll see improvement in the labor market and our economy.”
Hawaii recovered 19% of its visitors in the first five days since tourism reopened last week compared with the year-earlier period, Tian said.
“We expect the recovery will be 30% in November and 40% in December, so we’ll be gradually increasing,” he said.
“It was 1% before the start of the pre-travel testing program, when the average number of visitors per day was about 580. Since the beginning of the pre-travel testing program, the average for the first five days (through Monday) is about 4,800.”
The labor force also is improving, as evidenced by initial unemployment claims, which for the week ended Oct. 10 were 4,896, the first time since the week ended March 21 that the number was below 5,000, Tian said.
Since falling to a minuscule 2.4% in March, the onset of the pandemic pushed the unemployment rate in Hawaii to 23.8% in April before it began its downward trend of 23.5% in May, 13.4% in June, 13.5% in July and then 13% in August.
Not surprisingly, the leisure and hospitality sector was hit the hardest as it shed 4,100 jobs in September from the previous month with many of the state’s hotels and other businesses either closed or partly opened due to the pandemic.
The state’s labor force in September shrunk by 26,800, to 612,750, as people got discouraged and stopped looking for work or were afraid of contracting the novel coronavirus, according to Tian. The number of people employed fell 36,550, to 520,200, while those unemployed rose 9,750, to 92,550.
Nonagricultural 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, were down 120,800 from the same time a year ago.
The unemployment rate rose in the state’s four major counties in September 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 increased to 13.6% from 11%, Hawaii County’s rate rose to 13.6% from 12.3%, Kauai County’s rate increased to 20.5% from 18.3% and Maui County’s rate rose to 23.6% from 21.1%. In Maui County, Maui’s rate rose to 24% from 21.8%, Molokai’s rate increased to 8.4% from 7.1% and Lanai’s rate soared to 25% from 8.8%.