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Hawaii’s unemployment rate fell in November to a 20-month low as the state’s labor market continued to improve despite an ongoing worker shortage.
The state’s seasonally adjusted jobless rate, which during the early stages of the pandemic hit a record 21.9%, declined for the 10th straight month to 6.0% in November from a revised rate of 6.4% in October, according to data released Thursday by the state Department of Business, Economic Development and Tourism. The October rate previously was reported as 6.3%.
DBEDT chief economist Eugene Tian said Hawaii’s economic recovery shouldn’t be slowed by the Federal Reserve’s announcement Wednesday that it plans to aggressively control inflation by reducing monthly bond purchases at twice the pace it previously set and increase interest rates three times next year.
“Raising interest rates will discourage investment and economic activities and thus reduce demand and, as a result, will lower inflation,” Tian said via email. “Reducing economic activities will have a pressure of increasing the unemployment rate. That is why the Fed is increasing the interest rate in steps — small step each time.
“Since Hawaii is still in the economic recovery stage, especially in tourism, the interest rate increase may not stop Hawaii’s economic recovery. The tourism recovery will be accelerating in 2022, and more people will be called back to the workplace. Hawaii’s labor market will continue to improve, and the unemployment rate will continue to decline in 2022.”
Tian said he expects Hawaii’s unemployment rate will be around 5% in 2022 due to the improvement in the economy, particularly in tourism.
“In 2021, visitor arrival recovery is about 65% of the 2019 level, and in 2022, visitor arrivals recovery is expected to reach 85%,” Tian said. “Job recovery is always falling behind other economic indicators.”
Hawaii, which like much of the country has been experiencing difficulty finding workers, saw its labor force shrink to 646,450 last month from 647,050 in October, possibly due to people quitting their jobs for health reasons, retirement or moving out of state. The labor force includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed.
However, the number of people employed rose to 608,000 from 605,950 while those unemployed fell to 38,450 from 41,100.
In another measure of the state’s unemployment, total nonagricultural jobs increased in November by 600 over the previous month. The largest gain was in leisure and hospitality, with 1,200 additional jobs.
Nonagricultural payroll jobs are calculated from a mail survey of employers and are considered a better indicator of job growth due to its larger sample size than the labor force data, which is compiled from a telephone survey of households. In the payroll count, one person might be counted multiple times if that person has multiple jobs.
The jobless rate fell in the state’s four major counties in November from October. State and national labor force data is adjusted for seasonal factors, but the county jobs data does not take into account variations such as the winter holiday and summer vacation seasons.
Honolulu County’s jobless rate fell to 5.0% from 5.4%, Hawaii County’s rate dropped to 5.2% from 5.7%, Kauai County’s rate decreased to 7.2% from 7.8% and Maui County’s rate sank to 7.0% from 7.6%. In Maui County, Maui’s rate fell to 6.8% from 7.5%, Molokai’s rate declined to 11.9% from 12.0% and Lanai’s rate dropped to 6.2% from 7.6%.
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