Hawaii’s seasonally adjusted unemployment rate fell to 3.2 percent in December after the number was revised upward by one-tenth of a point for November.
The last time the rate was this low was in January 2008, according to data released Monday by the state Department of Labor and Industrial Relations. The number has fallen in six of the previous seven months.
Total nonfarm jobs last month rose by 3,600 to 641,700 from 638,100 in November.
“This is a good sign for the economy and is an indication the economy continues to improve,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “Tourism is still a major contributor to the job growth. We expect the labor market will continue to improve and job growth will continue to be around 1 percent. The leading sectors will be tourism and construction, and we expect the unemployment rate this year should be down to 3 percent.”
The U.S. unemployment rate, which was announced earlier this month, held at 5.0 percent.
Over the past seven months, the state jobless rate gradually has dropped from 4.1 percent in May. It was 4.0 percent in June, 3.7 percent in July, 3.5 percent in August, 3.4 percent in September, 3.3 percent in October and November (after the revision) and now 3.2 percent in December.
The Hawaii labor force, which includes people who are employed and people who are unemployed but actively seeking work, jumped by 2,900 last month to a record 682,750 from the previous high of 679,850 in November.
There were 660,600 people employed last month, a record, topping the previous high of 657,750 people reached in November. Those unemployed increased to 22,150 from 22,100 over the same period. A year earlier there were 27,100 unemployed.
Tian said he doesn’t expect the average jobless rate for 2016 to go lower than 3 percent because of how far it has fallen from its 4 percent rate in December 2014.
“It’s mainly because in 2015 the labor market improved so much, so I think the recent improvement will be slowing down,” he said.
Initial unemployment claims plunged during December by 320, or 20.3 percent, from the same time a year ago while weekly claims dropped by 2,491, or 27.1 percent, over the same time frame. Since November, however, initial claims and weekly claims increased by 21.5 percent and 1.3 percent, respectively.
Despite Hawaii’s jobless rate being at an eight-year low, the state’s underemployment rate — which measures labor underutilization — from the fourth quarter of 2014 through the third quarter of 2015 remains high at 5.8 percent. The underemployment rate includes people who are employed but not in the field they wanted, or are working part time but would rather work full time.
“It’s still pretty high because in the good years from 2005 to 2007, it was 3.5 percent,” Tian said.
The unemployment rate and nonfarm payroll numbers are derived from separate surveys. Hawaii’s unemployment rate is derived largely from a monthly telephone survey of households, while a separate survey of businesses determines the number of nonfarm payroll jobs. The nonfarm payroll jobs figure includes people who might hold multiple jobs but doesn’t include people who are self-employed.
The largest increase in nonfarm jobs last month came from leisure and hospitality, which rose by 900 jobs, to 116,500, from November. Most of that increase was in food services and drinking establishments. The professional and business services segment had an increase of 800 jobs, to 84,200, with most of the rise in administrative and support services. Construction jobs, which have been picking up steam with all the activity in Kakaako, rose by 500 jobs to 35,700.
Employment in government jobs went up by 800, to 125,400, primarily in the state Department of Education.
The largest contraction of nonfarm jobs came in the trade, transportation and utilities sector, which lost 200 positions from the previous month in dropping to 120,000 jobs.
Over the past 12 months, total nonfarm jobs rose by 15,700, or 2.5 percent.
Unemployment rates, meanwhile, fell in all four main Hawaii 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 declined to 2.7 percent from 3.0 percent, Hawaii County’s rate fell to 3.7 percent from 4.1 percent, Kauai County’s rate dropped to 3.5 percent from 3.9 percent and Maui County’s rate fell to 3.1 percent from 3.4 percent.
Within Maui County, Maui island’s jobless rate fell to 3.0 percent from 3.2 percent, Molokai’s rate declined to 6.4 percent from 8.1 percent and Lanai’s rate fell to 3.6 percent from 3.9 percent.