Hawaii’s unemployment rate continues to rank among the lowest in the nation as the job market in the islands remains steady.

Even though the state’s seasonally adjusted rate in December inched up to 3.0%, it had held at 2.9% for each of the previous six months, according to recent data released by the state Department of Business, Economic Development and Tourism. The last time the rate hit 3.0% was in May.

Hawaii’s 3.0% rate in December was tied for the sixth lowest in the nation and was bettered only by South Dakota (1.9%), Vermont (2.4%), North Dakota (2.5%), New Hampshire (2.6%) and Nebraska (2.8%). Connecticut, Virginia and Wisconsin all tied Hawaii at 3.0%.

The U.S. unemployment rate was 4.1% in December, down from 4.2% in November.

Hawaii’s unemployment rate for the full year was 3.0%, which ranked as the 10th lowest in the nation.

“This data represents that the Hawaii labor market has been stable and has performed better than most of the states in the nation,” state chief economist Eugene Tian of DBEDT said in an email. “The increase in the unemployment rate in December 2024 from November 2024 was due to the increase in the labor force, which rose by 550. Though some of the people found jobs in the month, most of them are still waiting to be hired and they are counted as unemployed.”

Hawaii’s labor force, which includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed, increased to 672,750 from 672,200.

Those employed rose to 652,900 from 652,700, but the number of people unemployed increased to 19,850 from 19,550.

DBEDT projected at the beginning of 2024 that the state would have a 2.9% unemployment rate for the full year. So the 3.0% outcome was just 0.1 percentage point higher than DBEDT forecast.

For 2025, DBEDT expects that the Hawaii labor market will continue to be stable and improve, with the unemployment rate projected to be 2.9%, lower than the 3.0% experienced in 2024, Tian said.

Job growth in the state has been showing improvement with nonfarm payrolls — calculated from a mail survey of employers — increasing in December by 2,200 jobs from November and jumping by 11,300, or 1.8%, from December 2023. Leisure and hospitality showed the largest month-over-month gain with an increase of 900 jobs.

Meanwhile, the unemployment rate fell in all four of the state’s major counties 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 rate decreased to 2.7% from 2.9%, Hawaii County’s rate fell to 3.0% from 3.2%, Kauai County’s rate declined to 2.7% from 2.9% and Maui County’s rate fell to 3.4% from 3.7%. Within Maui County, Maui’s rate fell to 3.5% from 3.8%, and Lanai’s rate decreased to 2.6% from 2.7% but Molokai’s rate rose to 2.9% from 2.8%.

Tian gave a cautious outlook for the state’s economy this year because of uncertainty from tariffs and policies that could be, or have been, implemented by President Donald Trump.

“Tariffs will likely increase consumer inflation in the state,” Tian said. “For example, a tariff on imports from China will increase the cost of construction materials, furniture, and food. China is the third-largest country Hawaii imports from behind South Korea at No. 1 and Japan at No. 2.”

Tian said 11.3% of Hawaii imports from foreign countries are from China and that businesses are likely to pass on the cost to consumers because tariffs add the cost to businesses.

”Federal government policy in cutting federal civilian workers may affect Hawaii’s unemployment rate if more federal civilian workers will be laid off,” he added.