Isle jobless rate holds steady


POSTED: Saturday, July 18, 2009

The good news is that Hawaii's unemployment rate held steady at 7.4 percent in June; the bad news is that economists do not think it means that recovery of the state's labor market is imminent.

June's result was related more to a drop in the number of people in the state's labor force rather than stabilization, said Byron Gangnes, director of the Hawaii Economy Group for the University of Hawaii's Economic Research Organization (UHERO).

“;Certainly, it is encouraging that the rate is not shooting higher and higher every month, but we are not seeing any evidence that the job situation has stabilized yet,”; Gangnes said.

Last month there were 645,528 in the Hawaii labor force, with 597,783 employed and 47,745 unemployed, according to a report released yesterday by the U.S. Department of Labor. UHERO has forecast that Hawaii's jobless rate will continue rising until it peaks over 8 percent in the middle of next year. UHERO expects that Hawaii's jobless rate will average 7.5 percent in 2011.

“;We are not thinking that 2011 is going to be any better than this year,”; Gangnes said. “;We haven't seen the tapering off in job losses that you would expect to see when the economy approaches the low point.”;

While the state's jobless rate last month was still at a more-than-31-year high, the greater concern is that Hawaii's payroll job count fell by 1,600 in June and that for the last year or so, the count has been falling by a similar amount each month, he said.

“;When things get really bad, some people will get discouraged and quit looking for jobs, and others will move away,”; Ganges said.

Judy Bishop, owner of Bishop & Co., a Honolulu-based staffing and career counseling company, said the number of job hunters who have quit looking for work because they have gone back to school or moved has risen.

“;We also are seeing people change addresses because they have given up their house or apartment and moved in with family,”; Bishop said.

Hiring requests from employers are down about 25 percent from last year, Bishop said.

Among the harder-hit industries last month was the trade, transportation and utilities sector, said Ryan Markham, spokesman for the state Department of Labor and Industrial Relations.

Carol Pregill, president of Retail Merchants of Hawaii, said retailers have been hurt by rising operating costs, and those that rely on visitors have experienced additional challenges.

“;Some retailers have had to reluctantly lay off people, and others have cut wages, hours or benefits to try to preserve their staff,”; Pregill said.

While UHERO expects major job losses to stop by year's end, the state budget crisis poses the biggest threat to recovery, Gangnes said.

“;It's a real concern because the state is going to be forced to take actions that hurt the economy,”; he said. “;It's going to be a long slog rather than a strong bounce back.”;