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The Honolulu Advertiser
Posted on: Saturday, December 19, 2009

Hawaii jobless dips to 7%, but real growth not likely till 11


By Alan Yonan Jr.
Advertiser Staff Writer

The state's unemployment rate edged down to 7 percent in November, but economists say the sluggish economy likely will prevent any sustained improvement in the job market until 2011.

The November jobless rate was an improvement from October's 7.3 percent and was the lowest since July, when it also was 7 percent on a seasonally adjusted basis. Hawai'i's unemployment rate was the 15th lowest nationally and was substantially better than the 10 percent U.S. average for November.

Still, it will probably be months before unemployment establishes a clear downward trend because most businesses are reluctant to ramp up hiring until they are convinced an economic recovery has firmly taken hold.

"The unemployment rate usually is not a leading indicator. It lags the recovery," said Leroy Laney, economics professor at Hawai'i Pacific University.

"A few tenths of a percent improvement is OK, but it doesn't mean a recovery is right around the corner. It's not something to get excited about until you start to see a trend," said Laney, who is forecasting unemployment will average 7.5 percent in 2010 before starting to fall in 2011.

Laney's outlook was echoed by the University of Hawai'i Economic Research Organization, which yesterday issued a report saying unemployment will worsen next year before improving in 2011. UHERO's forecast calls for unemployment to rise to 7.3 percent in 2010, and ease to 6.7 percent in 2011.

There were 44,950 unemployed workers in November out of a total labor force of 644,700, according to data jointly released yesterday by the federal Bureau of Labor Statistics and the state Department of Labor. That compared with 46,800 unemployed and a total workforce of 645,640 in October.

Hawai'i's unemployment rate climbed steadily between November 2008, when it was 4.9 percent, and May 2009, when it peaked at a 31-year high of 7.4 percent. Since then, it has hovered around the 7 percent level.

Around the state, Hawai'i County had the highest unemployment rate at 10 percent. The rate was 9.3 percent for Maui County and 9.2 percent for Kaua'i County. The rate for Honolulu County was 5.9 percent. County rates are not adjusted for seasonally variations.

The unemployment rate is derived from a survey of households conducted by the Bureau of Labor Statistics.

A separate survey of businesses showed that the number of nonagricultural payroll jobs in Hawai'i fell to 584,900 in November, a drop of 6,000 jobs from October. That 1 percent monthly decline was the largest drop of any state, according to the BLS.

By sector, the biggest number of job losses occurred in government, which reported a net decline of 900 jobs. Other losses were reported in professional and business services (800); trade, transportation and utilities (700); construction (700); miscellaneous services (400); and financial activities (200).

There were increases in the leisure and hospitality sector (400 jobs) and educational and health services (100).

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