Hawaii’s labor market remained mired in a slow-growth mode as the unemployment rate in April was 2.8% for the second straight month — matching its highest level in more than two years.
Nonfarm payroll jobs, though, rose by 1,200 from the previous month, according to data released Thursday by the state Department of Labor and Industrial Relations.
Local economists have been forecasting slow growth for the next few years and the jobless numbers have been bearing that out as the state unemployment rate continues rising from its revised all-time low of 2.2% in October and November 2017.
“Our economic growth has been slowing but is stable at the lower rate,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “The slow growth will last for a few years.”
Tian said lower visitor spending has been affecting tourism, the state’s No. 1 industry.
“Hawaii’s economy has been driven by tourism, construction, and health care industries,” Tian said. “Construction and health care are currently performing well, but the visitor industry is the drag of the current economic slowdown. It is not because we have fewer visitors, it is because visitors are now spending less. Hawaii needs to attract more high-spending visitors such as those come here for businesses or meetings.”
The U.S. jobless rate, which fell in April to a near-50-year-low of 3.6%, continues to drop as Hawaii’s numbers trend upward.
“It’s because of the different economic structure,” Tian said. “The driving forces for Hawaii’s economy is tourism while the driving forces for the U.S. economy is manufacturing. While Hawaii’s tourism, in terms of visitor spending is shrinking, the U.S. manufacturing is booming.”
Nonfarm payroll jobs, which are calculated from a mail survey of employers, rose by 1,200 in April from the previous month. The largest gains in jobs were in leisure and hospitality, up 1,000; and construction, up 500. Job contraction in retail trade was primarily responsible for the trade, transportation and utilities category incurring the biggest drop at 700 jobs. Nonfarm payroll jobs include people who might hold multiple jobs but don’t include people who are self-employed.
Meanwhile, Hawaii’s labor force numbers, which are compiled from a telephone survey of households, continue to worsen. The state labor force shrunk to 670,450 from 672,800 in the previous month. The labor force includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed. The number of people employed dropped to 651,450 from 654,150 while those unemployed rose to 19,000 from 18,700.
“There is shrinking employment,” Tian said. “The decreases in labor force or employment mostly occurred in self-employed. Some of them may have given up looking for jobs or moved out of state.”
The unemployment rate fell in three of the state’s four major counties. State and national labor force data are adjusted for seasonal factors, but the county jobs data are not seasonally adjusted and thus do not take into account variations such as the winter holiday and summer vacation seasons.
Honolulu County’s rate fell to 2.6% from 2.7%, Kauai County’s rate decreased to 2.9% from 3%. And Maui County’s rate dipped to 2.8% from 2.9%. Hawaii County’s rate increased to 3.8% from 3.7%. Within Maui County, Maui’s rate declined to 2.7% from 2.8%, Lanai’s rate dropped to 1.3% from 2.7% and Molokai’s rate declined to 4.7% from 5.8%.