Hawai'i's jobless rate grew faster last year than at any time since 1976 as the state's economy slumped and companies laid off thousands of workers.

The state reported yesterday that unemployment ended the year at 5.5 percent, or 2.4 percentage points higher than in January 2008. That was the biggest increase since the state began keeping seasonally adjusted jobless rates 32 years ago.

Unemployment has been on an upward trend here since 2006, when the state's jobless rate was among the lowest in the nation.

But unemployment shot up in the second half of 2008 as companies such as Aloha Airlines shut down and others such as NCL America and Hawaii Medical Center cut back operations. There have been numerous cutbacks of 50 or more employees, while other companies are cutting back workers' hours to deal with the slower economic pace.

Nationally, rising unemployment spared no state last month. Jobless rates for December hit double digits in Michigan and Rhode Island, while South Carolina and Indiana notched the biggest gains from the previous month, the Labor Department said yesterday.

Clobbered by problems at Detroit's auto companies, Michigan's unemployment rate soared to 10.6 percent in December. Rhode Island's jobless rate hit 10 percent, the highest on records dating back to 1976.Those states — along with seven others and the District of Columbia — registered unemployment rates higher than the nationwide average of 7.2 percent, a 16-year high.

Wyoming posted the lowest unemployment rate among all states — 3.4 percent in December. Hawai'i's unemployment rate is 14th lowest.

DIFFICULTIES ABOUND

"It is a tough thing," said Dane Senser, who has been looking for a job since October, when he quit a job as director of concierge services at a senior living center in California for a caretaker job with a Kaua'i homeowner.

When he arrived from the Mainland, he was told the employer had decided against filling the position, given $200 and told good luck. Senser said there are jobs available that pay $8 an hour, but that it is difficult to find well-paying jobs. Those that are open have many applicants.

"It's been quite an experience," he said.

The 5.5 percent unemployment rate last month was Hawai'i's highest since December 1998 and compared to the revised 5.0 percent rate in November. The increase between the November and December came out to 0.5 percentage points, or the biggest month-to-month jump since the months following the 9/11 terrorist attacks of 2001.

"The current economic challenges require all of us to pull together to find ways to stimulate our economy and preserve and create jobs," said Darwin L.D. Ching, director of the state Department of Labor and Industrial Relations. He noted Gov. Linda Lingle's plan to boost public works spending and said at the same time, his department is continuing to assist displaced workers.

Those totaled 36,450 in December, meaning one out of every 18 people in Hawai'i's labor force was out of work during the month. The state said there were job losses in construction, transportation, education and health services.

The number of people in the labor force grew as the number of people employed shrank to 625,300.

Other figures released by the state show: