Pulse of state economy weakens
|||Hotel occupancy drops for sixth straight month|
By John Duchemin
Advertiser Staff Writer
Two measures of Hawai'i's prosperity have again declined, and the state's top economic official said yesterday that the Islands' economy is slowing after a two-year burst of job creation and rising income.
And more people are out of work: Hawai'i unemployment rose in July.
Department director Seiji Naya said the higher joblessness and lower indicator are clear signs that job growth, already down from the pace just six months ago, will slow further, though perhaps not stop altogether.
"Overall, these are weakening signals, and I can't say they're positive signals I don't see that," Naya said. "But I don't see them pointing to a recession."
Hawai'i unemployment was 4.5 percent in July, equal to the national rate, the U.S. Labor Department reported yesterday. That rate, the highest adjusted level since March 2000, is another signal that the state's job growth is slowing after nearly two healthy years.
The numbers are adjusted to take seasonal changes, like summer vacation, into account. For Hawai'i, the unadjusted rate was 4.8 percent.
The rise in joblessness jibes with the drop in the indicator. The leading economic indicator, a combination of 10 local, national and international economic measurements, is designed to predict changes in job growth. The indicator began dropping in summer 2000, and has headed down ever since.
Hawai'i job growth has indeed followed the indicator down, from above 3 percent annually in February to about 1.1 percent in June.
Not all the recent news is bad, however. Economists say dropping short- and long-term interest rates should encourage investment in Hawai'i, and tourism remains near its record levels of last year.
Personal income rose about 3 percent in the first quarter, and job growth, while down, is still positive. The state employed 6,000 more people in June 2001 than in June 2000, according to the state Department of Labor and Industrial Relations.
Joblessness has inched up since January, when only 4.1 percent of the population was unemployed. It peaked at 4.8 percent in April, when thousands of state teachers and university professors went on strike. That month aside, July's rate is the highest in the last 15 months.
But the level of unemployment is still low, relative to previous years. Since 2000 began, unemployment has remained under 5 percent well down from the previous five years, when the rate hovered between 5 and 6 percent.
In terms of people, 27,250 were out of work in July, compared with 25,150 in June, the Labor Department found. About 580,000 people had jobs, down from 581,200 in June.
Each of the state's counties saw unemployment rise. On O'ahu, the rate rose to 4.1 percent, up from 3.7 percent in July 2000.
Maui County joblessness rose to 4.5 percent from 4.1 percent the year earlier. The Big Island rose to 8 percent from 7.6 percent, and Kaua'i was up to 7.2 percent from 6.5 percent.
The county numbers are not adjusted for seasonal change.