A Hawaii labor market plagued by the COVID-19 pandemic and thousands of job losses in 2020 showed some signs of recovery at year-end as the unemployment rate fell for the third straight month and finished December at 9.3%.
The seasonally adjusted rate ranked Hawaii as the worst in the country and just ahead of Nevada at 9.2% and California at 9%, according to data released Tuesday by the U.S. Department of Labor. Nebraska and South Dakota were the best with 3.0%. The U.S. jobless rate was 6.7% in December.
Nonagricultural payroll jobs, which are calculated from a mail survey of employers, rose 11,300 from November but were down 90,900 from the same time a year ago.
The leisure and hospitality sector showed the largest gain of any sector, adding 5,400 jobs in December, to accommodate the gradual return of tourists following the closure of hotels and other businesses.
“The payroll jobs increase reflected the improvement in the tourism industry,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “In December 2020, visitor arrivals recovered by 26% from the same month a year ago. Construction industry gained 800 jobs in December.”
Since falling to a minuscule 2.4% in March, the onset of the pandemic pushed the unemployment rate in Hawaii to a record-high of 23.8% in April before it began its downward trend of 23.5% in May, 13.4% in June, 13.5% in July, 13% in August, 15% in September, 14.2% in October, 10.4% in November and now 9.3% in December.
”Hawaii’s labor market has been improving since the start of the Safe Travel program (on Oct. 15),” Tian said. “The improvement in Hawaii’s labor market has been faster than the U.S. as a whole.”
Tian notes that the U.S. unemployment rate in September was 7.8% and in December was 6.7%, an improvement of 1.1 percentage points. By contrast, in Hawaii the unemployment rate in September was 15% and 9.3% in December, an improvement of 5.7 percentage points.
”This improvement was partially due to the restarting of tourism and the good performance in the construction industry,” Tian said.
DBEDT projected in its economic forecast released last month that the unemployment rate for Hawaii this year will be 7.9%.
“Hawaii labor market is expected to improve more in 2021, but the improvement is at a slower pace,” Tian said.
The state’s labor force in December fell by 10,350, to 651,050, from the previous month. The number of people employed declined by 2,350, to 590,400.
“These numbers imply that more people withdrew from the labor market, especially from the self- employed,” Tian said.
The number of people unemployed, meanwhile, fell 8,000, to 60,700.
The unemployment rate fell in the state’s four major counties in December 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 decreased to 8% from 9.1%, Hawaii County’s rate fell to 8.9% from 10.1%, Kauai County’s rate fell to 12.3% from 13.9% and Maui County’s rate dropped to 13% from 16.3%. In Maui County, Maui’s rate fell to 13.4% from 16.3%, Molokai’s rate fell to 6.2% from 6.6% and Lanai’s rate plunged to 5.7% from 29.1%.
Getting better
Hawaii’s seasonally adjusted unemployment rate in 2020:
January 2.7%
February 2.7%
March 2.4%
April 23.8%
May 23.5%
June 13.4%
July 13.5%
August 13%
September 15%
October 14.2%
November 10.4%
December 9.3%
Source: U.S. Department of Labor
