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The Honolulu Advertiser

Posted on: Friday, April 22, 2005

Hawai'i jobless rate is lowest in 14 years

By Dan Nakaso
Advertiser Staff Writer

Hawai'i's unemployment rate dropped to 2.8 percent in March, its lowest level since the Japanese economic bubble was powering Hawai'i's economy 14 years ago.

Record tourist arrivals, record home resale values, high demand for construction and increased military spending have all contributed to a seasonally adjusted unemployment rate that has been running lower than 2 percentage points from the national rate.

"Month after month, we've sustained one of the lowest unemployment rates in the nation," said Nelson Befitel, director of the state Department of Labor and Industrial Relations. "We anticipate that, unless something drastic happens, we'll stay the course as we have."

Iwalani Wisniewski is enjoying the tight labor market. The 38-year-old Kailua resident recently received three offers before accepting a new job as a receptionist at a doctors' office just a few minutes from her home. Then she casually looked around for part-time work to give herself something to do in the evenings.

On Saturday, Wisniewski called Paul Brown Salon & Day Spa, located in the same shopping center as the doctors' office.

"That afternoon I had an interview," Wisniewski said. "Then I started work that same afternoon."

Hawai'i's low unemployment rate means that employers are struggling to fill entry-level positions.

"It's a good problem to have," Befitel said. "I'd rather have that problem than the alternative of high unemployment."

Lower unemployment also brings the possibility that prices could rise as companies increase salaries to attract workers while passing the increased costs on to consumers.

Lawrence Boyd, a labor economist with the University of Hawai'iiWest O'ahu, worries that rising fuel and housing costs, along with increasing salaries, could push Honolulu's 3.3 percent inflation rate for 2004 to as high as 4 percent this year.

"Right now the planets are happily aligned," Boyd said. "The basic underpinnings of the local economy are pretty good. But there are disturbing signs, clouds out there on the horizon. We're operating beyond full capacity here and demand is outstripping supply in a whole bunch of areas and driving up prices."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or at 525-8085.