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The Hawaii unemployment rate fell to a 17-month low of 7% in August – the seventh straight monthly decline – while employment growth stalled due to an above-average release of workers at the Department of Education in the summer.
The seasonally adjusted unemployment rate fell three-tenths of a percentage point from 7.3% in July, according to data released Thursday by the Ministry of Economy, Economic Development and Tourism. A month-over-month decrease of 5,700 non-agricultural payrolls in August was mainly due to the decline in the DOE’s workforce.
“The labor market continues to improve with the rise in the labor force and employment and the fall in unemployment,” DBEDT chief economist Eugene Tian said in an email. “The data shows that most employment gains can be attributed to self-employment.”
Tian said entities in the state government – mostly from the DOE – were responsible for 86% of the total decline in the workforce.
“I’m not sure why jobs at the DOE decreased in August while schools opened this month,” he said. “Retirement and layoffs could be the reasons. Starting August 13, government officials will be required to produce vaccination cards or take weekly tests to report for work, including teleworking. This mandate may have had an impact on government employment. “
Hawaii’s unemployment rate is still below the US rate, which fell from 5.4% to 5.2% in August. However, Hawaii continues to distance itself from once having the highest unemployment rate in the country. In July, Nevada had the highest unemployment rate of 7.7%, followed by California, New Mexico and New York with 7.6%. The U.S. Department of Labor will release August figures for all states today.
Tian said although the Delta variant had sped up sharply in Hawaii in August, the labor market could be impacted this month due to new restrictions that went into effect this week.
“However, as more people are being vaccinated, the governor is not planning a lockdown, and Delta variant infections are slowing down, I don’t expect any significant impact on the job market,” said Tian.
Tian said various restrictions put in place on Oahu and Maui will have a negative impact on the labor market, but the extent will be small due to the increased vaccination rate and with no planned business lockdown, workers can work from home and both residents and visitors can have experience with the New Rules.
In May 2020, the state’s unemployment rate in the early stages of the COVID-19 pandemic was still at a record 21.9%. The last time the unemployment rate was below 7% was in March 2020 when it was 2.1% in the pandemic’s infancy.
DBEDT forecast on Aug. 26 that Hawaii’s unemployment rate will be 7.6% in 2021 and 6.4% in 2022. From the beginning of the year to August, the unemployment rate has been 8.4%.
“We expect unemployment rates to improve in November and December this year when the recovery in the tourism industry resumes,” said Tian.
In the August unemployment figures, the number of employed people in Hawaii – including the employed, the unemployed but actively seeking work, and the self-employed – rose from 645,950 in July to 647,350.
The number of employees rose from 598,750 to 601,800 – the highest level since March 2020.
The unemployed fell from 47,200 to 45,550, the lowest level since the pandemic began.
Among the non-agricultural payrolls, the commercial, transportation and utilities sectors saw the largest increase with 300 jobs last month, while the leisure and hospitality industry, which had grown strongly with the recovery of tourism, added only 100 jobs.
“Most of the job cuts in August came from the state government,” said Tian. “The private sector saw a small downsizing of 600 jobs in August. Overall, the job change in the private sector in August was not significant. “
Non-farm payrolls are calculated from a postal survey of employers and are considered a better indicator of employment growth because there is a larger sample size than the labor force data gathered from a telephone survey of households.
The unemployment rate in the state’s four major counties fell in August compared to the previous month. The state and national labor force data are adjusted for seasonal factors, but the county employment data does not account for variations such as winter and summer vacation periods.
The unemployment rate in Honolulu County decreased from 6.2% to 6.1%, in Hawaii County from 6.9% to 6.6%, in Kauai County from 9.6% to 8.9%, and in Maui County from 9 , 1% to 8.5%. In Maui County, the rate of Maui fell to 8.7% from 9.3%, Molokai’s rate from 8.5% to 7.9%, and Lanai from 3.8% to 3.5%.
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