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The Honolulu Advertiser
Posted on: Tuesday, January 22, 2002

Hawai'i jobless rate falls in December

By John Duchemin
Advertiser Staff Writer

Hawai'i unemployment dropped in December for the first time since Sept. 11, a rare positive sign amid a sea of indicators pointing at recession.

Joblessness in the state dropped to 5.4 percent last month, according to the U.S. Bureau of Labor Statistics. That's down from 5.7 percent in November, the highest unemployment rate since June 1999. The numbers, which are compiled in a monthly survey of Hawai'i residents, are adjusted for seasonal variations.

But the lower rate is not necessarily a good sign, a University of Hawai'i economist said yesterday.

The lower rate could be masking discouraged workers — jobless people who bail out of the job hunt entirely and are thus no longer considered "unemployed" by the government, said Carl Bonham, an economics professor at UH. To be considered unemployed, you have to be actively looking for a new job.

Bonham points out that the number of officially unemployed people dropped by 2,000 between November and December.

The figure also could reflect an increase in seasonal hiring by retailers and others for the holiday season.

The December unemployment rate also remains higher than the joblessness of most of 2000 and 2001, when economic expansion and job growth kept people employed and held the unemployment rate between 4 and 4.5 percent.

But unemployment leaped in October, reflecting thousands of layoffs and cuts in workers' hours in tourism-related sectors in the wake of the Sept. 11 attacks.

Most forecasters expect unemployment to stay at higher levels — and perhaps rise further — for several years.

Lawrence Boyd, an employment specialist at the UH Center for Labor Economics and Education, predicts joblessness will climb above 6 percent this year and stay that high through 2003.

Another forecast, by the UH Economic Research Organization, says the rate will hover around 5.5 percent through next year.