Hawaii jobless rate rises to 3.2%

Unemployment is likely to continue rising into 2009

Hawaii's jobless rate continued its upward climb in December, reaching its highest point since May 2004.

Hawaii, which until November had the second-best unemployment rate in the nation for four months behind Idaho, is not likely to see numbers near 2 percent for a while, said Leroy Laney, a consultant for First Hawaiian Bank. Hawaii's average unemployment rate for the year was 2.6 percent.

Nationally, the seasonally adjusted unemployment rate increased to 5.0 percent in December from 4.7 percent in November.

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Hawaii's jobless rate ticked up to its highest point in 3 1/2 years last month, continuing a four-month climb that is expected to continue into 2009.

December's seasonally adjusted unemployment rate rose to 3.2 percent, its highest since May 2004. That puts it equal to Nebraska and Utah but behind Wyoming's 3.1 percent, and Idaho and South Dakota at 3 percent, according to data released yesterday by the state Department of Labor and Industrial Relations.

Hawaii is not likely to see numbers in the 2 percent range for a while, said Leroy Laney, a consultant for First Hawaiian Bank. Hawaii's average unemployment rate for the year was 2.6 percent.

Hawaii's jobless rate fell to 2 percent in December 2006, to the lowest level in the 30 years that the state has been calculating seasonally adjusted numbers.

"What we are seeing now is a slackening in the labor market that we haven't had in a long time," Laney said. "We've had a pretty good run of it. It's not surprising to see it winding down a little bit."

Laney, one of several Hawaii economists who predicted a slowdown this year, said the state is feeling the effects of a slump in tourism as well as signs of a recession in the national economy. Hawaii's recent economic expansion lasted 11 years, he said.

Nationally, the seasonally adjusted unemployment rate increased to 5 percent in December from 4.7 percent in November.

Carol Pregill, president of the Retail Merchants of Hawaii, a nonprofit trade organization that focuses on the development of the retail industry, said several retailers have canceled plans to expand here. However, plans by Nordstrom and Target to open stores will keep retailers scrambling to fill jobs, she said.

"It's across the board -- everybody from construction, restaurants to banks -- everyone is looking for people," she said.

Wendy Burkholder, executive director of Consumer Credit Counseling Service of Hawaii, said she has seen a jump in the number of people who were seeking help because of unemployment or wage cuts.

Out of the 27 appointments in Burkholder's Maui County office in the first two weeks of this year, seven were related to reduced income, and three were unemployed.

"That's far more than we've seen in the last three years," she said. "It's something we are certainly going to see more of this year."

Pearl Imada Iboshi, the state's chief economist, expects job growth to slow during the next two years. The state forecast wage and salary job growth of 1.5 percent for this year, down from the 1.9 percent projected for 2007.

Shortage areas will remain in sectors such as teaching and nursing, with less skilled labor feeling more of the pinch, she said.

The seasonally adjusted number of nonagricultural jobs rose in December to 632,200, up 3,100 from November.

By county, for which the figures are not seasonally adjusted, Honolulu had the lowest jobless rate in December, at 2.5 percent, followed by Kauai at 3.2 percent, Maui County at 3.4 percent and Hawaii County at 3.6 percent.