The state's seasonally adjusted unemployment rate hit a near seven-year high of 4.5 percent in September as the slowing economy forced more companies to cut back their payrolls.

Last month's jobless rate was 0.3 percentage point higher than in August and up from 2.8 percent a year earlier, according to a report released yesterday by the Department of Labor and Industrial Relations. It was the sixth straight month in which the unemployment rate increased.

The 4.5 percent rate was the highest since February 2002, when the jobless rate was at 4.6 percent.

Despite the increase, the state continued to be below the national unemployment rate of 6.1 percent. A year ago, the nation's jobless rate was 4.7 percent.

But at 4.5 percent, Hawai'i's unemployment rate has already surpassed a forecast by the University of Hawai'i Economic Research Organization, which just last month projected that unemployment could reach 4.4 percent in 2009.

Since that report was released, however, at least a half-dozen companies have announced layoffs totaling more than 370 workers, and that was on top of the thousands who lost their jobs during the first eight months of the year.

The number of people filing first-time claims for unemployment insurance has been rising in recent months. Claims for the week ended Oct. 11 totaled 2,123, a 65 percent increase over the same week a year ago.

Leroy Laney, a professor of economics and finance at Hawai'i Pacific University, cautioned that the outlook isn't very bright.

Laney said he is in the process of putting together his 2009 economic forecast for First Hawaiian Bank and said, "the numbers that I'm coming up with, they're not good."

Laney said the continuing struggles of the visitor industry, coupled with a plateauing in construction, will contribute to an even higher unemployment rate as the year comes to an end.

"The economy is in a deteriorating condition and I expect it will go higher than (4.5 percent) as we get into the end of this year and into next year because of all of these things that have happened to us this year and what looks like is on the horizon for next year," Laney said.

"Any way you look, it's pretty hard to find signs of optimism."

The Lingle administration is more optimistic that the economy will turn around soon. The governor this year announced a five-point plan to stimulate the economy and encourage investment, and her administration believes it will work.

"We are confident that Gov. Lingle's proactive initiatives and five-point plan to stimulate the economy, coupled with the innovation and resiliency of Hawai'i's workforce, will get us through this challenging period," said Darwin Ching, labor department director, in a statement.

Last month, the seasonally adjusted labor force reached a record-high 667,750 and comprised 637,550 employed and 30,200 unemployed.

In another measure of employment, total seasonably adjusted nonagricultural jobs declined by 1,800 to 623,100 in September.