Tuesday, September 24, 2002

rate falls again

The Hawaii economy continues
to show signs of recovery

By Dave Segal

The state's unemployment rate fell to a seasonally unadjusted 4.2 percent in August, as the Hawaii economy continued to show signs of a recovery and teachers and students began returning to school.

The rate was the lowest in three months and a three-tenths of a percentage point drop from a year ago.

Paul Brewbaker, chief economist for Bank of Hawaii, said the numbers are further evidence that the state is rebounding from a tourism slowdown that was exacerbated by the Sept. 11 attacks.

"In Hawaii, things are a little better, and certainly no worse today than before Sept. 11, while the (mainland) U.S. is in the slow and uncertain process of recovery from the trough of a recession that probably ended about one year ago, (and is) still making up for lost ground," Brewbaker said.

Art Although August payrolls in the state fell to 570,950 from 579,550 a year ago, those unemployed also declined as 24,750 sought work in August 2002 compared with 27,350 a year ago.

On a seasonally adjusted basis, Hawaii's August unemployment rate was 4 percent, down from 4.3 percent both in July and a year ago.

The national unemployment rate was a seasonally adjusted 5.7 percent in August, according to the U.S. Department of Labor.

Seasonally adjusted numbers take out the effects of changes associated with the seasons, such as teachers and students being out of school. In August, there were 39,300 employed by Hawaii's Department of Education, up 500 from July and 1,200 more than a year ago.

"It mystifies me why the state Department of Labor and Industrial Relations reports 'not seasonally adjusted' numbers," Brewbaker said. "It's not useful at this time of year to track a statistic that has not been adjusted for seasonal effects."

In August, the lowest seasonally unadjusted unemployment rate was on Oahu, which fell to 3.8 percent from 4 percent. Meanwhile, Kauai, the Big Island and Molokai all showed big improvements from a year ago. Kauai fell to 5.1 percent from 6.8 percent, the Big Island dropped to 5.8 percent from 6.8 percent and Molokai fell to 9.6 percent from 10.8 percent.

Bucking the statewide trend was Maui, which rose to 4.1 percent from 4 percent, and Lanai, which doubled to 4.8 percent from 2.4 percent.

Brewbaker, who tracks seasonally adjusted numbers, said the state has rebounded better than the mainland because it never experienced the huge economic swings.

"What's remarkable is our unemployment rate was 6.0 percent when the national rate was 4 percent," Brewbaker said. "Now our unemployment rate is 4.0 percent when the national rate is about 6 percent. It's a role reversal from two years ago.

"Obviously, in the late '90s, we did not participate to the same extent in the strength of the U.S. economic expansion. And, currently in Hawaii, we're not suffering the weakness of the U.S. economy. Partly, if not wholly, it's a reflection of the fact that technology-related manufacturing contributed to growth nationwide in the '90s and has contributed to the slowdown nationwide in the last two years."

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