Hawaii’s economic outlook improves slightly

Despite larger-then-expected job losses this year, University of Hawaii economists on Dec. 18 predicted a return to growth for the state’s economy in 2010. Data from the visitor industry suggested the downturn in Hawaii’s largest industry has already bottomed out, according to quarterly forecast released by the University of Hawaii Economic Research Organization. Visitor arrivals, which are expected to be down 4.2 percent this year, are forecast to rise by 3.7 percent in each of the next two years, the report said.

“We’re kind of seeing in some of the indicators that the bottom has been reached and (that there’s) some kind of growth,” said UH economist Carl Bonham, UHERO’s executive director and co-author of the report. “They don’t appear to be getting worse, so that’s the new good.”

Meanwhile, U.S. consumer confidence improved in December, increasing to the highest level in three months, a two-year high. But consumers, who continue to battle a brutal economy, are far from upbeat, rating their current financial situation the lowest since February 1983, the Conference Board reported on Dec. 29. Consumer confidence is critical to an economic recovery because consumer spending accounts for more than two-thirds of the nation’s gross domestic product.

The consumer confidence index increased to 52.9 in December from 50.6 in November, showing a little sign of life after falling much of the past two years. And the expectations index — basically how do you feel about the long-term outlook — improved to 75.6 from 70.3 in November. The current level is the highest since December 2007, the official start of the U.S. recession.

Hawaii continues to struggle with unemployment as the recession has hit the tourism industry especially hard and state government, one of Hawaii's biggest employers, is trying to close a $1.5 billion budget gap through layoffs, furloughs and program cuts.

Nationally, the number of monthly job losses dropped to its lowest level in since the recession began. The U.S. Department of Labor reported 11,000 jobs lost in November, about one tenth of the estimated 111,000 many economists had predicted. The number also is significantly more positive than the more than 500,000 jobs lost for many of the months this year.

The national unemployment rate declined slightly to 10 percent, down from 10.2 percent. However, 15.4 million people were still unemployed. The national jobless rate was 6.8 percent a year ago. Hawaii’s unemployment rate dropped to 7 percent in November, a slight dip from 7.2 percent in October, but still higher than the 4.9 percent unemployment rate of a year ago.

Michigan logged the highest unemployment rate in the nation with 14.7 percent in November. It was followed by Rhode Island with 12.7 percent and California, Nevada and South Carolina with 12.3 percent each. North Dakota continued to have the nation’s lowest unemployment rate with 4.1 percent.

Hawaii was among four states that saw “statistically significant” employment changes between October and November with the loss of 6,000 jobs in the span of a month. But the fact the state’s unemployment rate fell slightly suggests that there were also significant numbers of jobs still being created. Also, some jobless workers are no longer being counted because they moved away, are no longer receiving benefits or simply gave up looking for work.

In total, Hawaii has lost 29,000 jobs since November 2008, according to the U.S. Department of Labor. Honolulu-area employers are expected to hire at a slow pace in the first quarter of 2010, according to the latest Manpower Employment Outlook Survey released in early December.

From January to March, 6 percent of the companies interviewed in the Honolulu metro area plan to hire more employees, while 14 percent expect to reduce their payrolls, according to the survey. Another 75 percent expect to maintain their current staff levels and 5 percent remain uncertain about hiring plans.

Hawaii had seven “mass layoffs” in November, the same as in October, which resulted in the loss of 488 jobs for the month. That was down from the seven mass layoffs that eliminated 630 jobs in October. By comparison, there were nine mass layoffs that resulted in 641 lost jobs in November 2008.

A mass layoff is when there are 50 or more initial claims for unemployment insurance benefits from one employer during a five-week period, with at least 50 workers separated for more than 30 days. Nationwide there were 1,797 mass layoffs in November that resulted in the separation of 165,346 workers from their jobs for the month, seasonally adjusted.