Hawaii unemployment rate better than previously thought

Hawaii’s unemployment rate is all of a sudden pretty close to its 30-year average of around 4%.

The state Department of Business, Economic Development and Tourism reported Friday that the statewide unemployment rate in January was 4.4%.

That compares with previously reported rates that have been declining from a peak of 21.9% in April 2020, as the local economy was initially rocked by COVID-19 impacts, to 5.7% in December.

However, DBEDT’s Friday report includes revised federal data for Hawaii’s population in recent years, which led to relatively large reductions to prior published unemployment rates over the past two years.

So the previously reported 5.7% rate for December has been revised to 4.3%. November’s original 6.0% rate is now 4.4%.

Even the previously reported April 2020 peak figure of 21.9% was revised. Now the peak is even higher, at 22.4%.

“The change is big,” said DBEDT chief economist Eugene Tian, referring to the revisions. “But the trend is the same.”

In fact, improvement in Hawaii’s unemployment rate over the past two years is greater than previously thought, based on DBEDT’s revised figures derived from U.S. Bureau of Labor Statics data.

Tian said the slight uptick in the unemployment rate in January from December was due to the omicron coronavirus variant hurting tourism.

Still, 4.4% is close to Hawaii’s 30-year average. “We are actually coming to the normal rate,” he said.

A rate of around 3% can be roughly considered full employment, though Hawaii’s rate before the coronavirus pandemic took hold was 2.2% in March 2020.

One less positive aspect to employment in Hawaii is the size of the labor force, which remains down by 12,000 workers compared with January 2019 in part because some people have moved out of the state, while others have given up looking for a job.

A labor shortage also exists.

In December there were 54,000 job openings, of which 25,000 were filled, according to Tian.

“That means we have a shortage,” he said. “We still have a lot of positions not filled.”

Statewide, 644,150 people were employed and 29,500 were unemployed in January, for a total seasonally adjusted labor force of 673,700.

Nationally, the seasonally adjusted unemployment rate was 4% in January, up from 3.9% in December.