State Unemployment Rate at 2.3 Percent in October

October 2018 Unemployment. Maui Now graphic.

The Hawaiʻi State Department of Labor and Industrial Relations announced last Thursday the unemployment rates for the state during the month of October. According to the DLIR, the not seasonally adjusted unemployment rate for the county of Maui was 2.6%. The seasonally adjusted rate for the entire state was 2.3%, compared to 2.2% in September.

Statewide, 670,400 people were employed and 15,750 people were unemployed during the month for a total seasonally adjusted labor force of 686,100. Nationally, the seasonally adjusted unemployment rate was 3.7% in October, the same from September. The not seasonally adjusted unemployment rate was 2.3% for Honolulu, 3.5% for Hawaiʻi county, and 2.7% for Kauaʻi.

Initial claims increased by 16.2%, while weeks claims decreased by 11.6% for unemployment benefits compared to one year ago.  Over-the-month initial claims rose by 12.5% and weeks claims decreased by 3% during the month.

These unemployment rate figures are seasonally adjusted in accordance with the US Bureau of Labor Statistics methodology. The not seasonally adjusted rate for the state was 2.5% in October, the same as in September.

Industry Payroll Employment (Establishment Survey)

In a separate measure of employment, total nonfarm jobs increased by 300 in October from September. Among the major industries, Construction, Education & Health Services, Manufacturing, Information, Financial Activities, and Professional & Business Services all saw job increases. Employment in Other Services remained unchanged. The Trade, Transportation, & Utilities and Leisure & Hospitality industries experienced job losses. The ongoing labor dispute in the Accommodation sector is not factored into the October estimates, as the strike began after the October pay period utilized by the BLS was already in progress. Government dipped by 100 jobs. There were 10,900 more nonagricultural jobs this past October than there were in October of last year.

Seasonal Adjustment

The seasonal fluctuations in the number of employed and unemployed persons reflect hiring and layoff patterns during the winter holiday season and the summer vacation season. These variations make it difficult to tell whether month-to-month changes in employment and unemployment are due to normal seasonal patterns or to changing economic conditions. The BLS uses a statistical technique called seasonal adjustment to make that distinction.

This technique uses the history of the labor force data and the job count data to identify and calculate the size and direction of seasonal movements. A seasonal adjustment factor is then developed and applied to the estimates to eliminate the effects of regular seasonal fluctuations on the data. Seasonally adjusted statistical series enable more meaningful data comparisons between months or with an annual average.

Current Population (Household) Survey (CPS)

A survey conducted for employment status in the week that includes the 12th day of each month generates the unemployment rate statistics, which is a separate survey from the Establishment Survey that yields the industry job counts. The CPS survey contacts approximately 1,000 households in Hawaiʻi to determine an individual’s current employment status. Employed persons consist of: 1) all persons who did any work for pay or profit during the survey reference week, 2) all persons who did at least 15 hours of unpaid work in a family-owned enterprise operated by someone in their household, and 3) all persons who were temporarily absent from their regular jobs, whether they were paid or not. Persons considered unemployed are ones that do not have a job, have actively looked for work in the past four weeks and are available for work. Temporarily laid off workers are counted as unemployed, whether they have engaged in a specific job seeking activity. Persons not in the labor force are those who are not classified as employed or unemployed during the survey reference week.

Benchmark Changes to Local Area Unemployment Statistics Data

Statewide and sub-state data for 2013-2017 have been re-estimated to reflect revised population controls, model re-estimation and for seasonally adjusted data, new seasonal adjustment for 1976-2017.

Change to Monthly Employment Estimates

This release incorporates revised job count figures from 1990 through 2017 for the seasonally adjusted series. The reconstructed data reflects data from historical corrections applied to unadjusted super-sector or sector level series. For years, analysts with the State DLIR’s Research and Statistics Office have developed monthly employment estimates for Hawaiʻi and our metropolitan areas. These estimates were based on a monthly survey of Hawaiʻi businesses and analysts’ knowledge about our local economies. Beginning with the production of preliminary estimates for March 2011, responsibility for the production of State and metropolitan area (MSA) estimates was transitioned from individual state agencies to the US Bureau of Labor Statistics.

For Hawaiʻi, this means the transition of statewide, Honolulu and Kahului-Wailuku-Lahaina MSA areas. State agencies will continue to provide the BLS with information on local events that may affect the estimates, such as strikes or large layoffs/hiring at businesses not covered by the survey and to disseminate and analyze the Current Employment Statistics estimates for local data users. BLS feels this change is designed to improve the cost efficiency of the CES program and to reduce the potential bias in state and area estimates.

A portion of the cost savings generated by this change is slated to be directed towards raising survey response rates in future years, which will decrease the level of statistical error in the CES estimates. Until then, state analysts feel this change could result in increased month-to-month variability for the industry employment numbers particularly for Hawaiʻi’s counties and islands.

Seasonally Adjusted Labor Force and Unemployment Estimates for Honolulu and Maui County

BLS publishes smoothed seasonally adjusted civilian labor force and unemployment estimates for all metropolitan areas, which includes the City and County of Honolulu and Maui County. BLS releases this data each month in the Metropolitan Area Employment and Unemployment news release. The schedule is available online.

Alternative Measures of Labor Underutilization

Alternative Measures of Labor Under-utilization for States, Fourth Quarter of 2017 through Third Quarter of 2018 Averages.

The six alternative labor underutilization state measures based on the Current Population Survey and compiled on a 4-quarter moving average basis defined:

• U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force;
• U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force;
• U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate);
• U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;
• U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers*, as a percent of the civilian labor force plus all marginally attached workers; and
• U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

* Individuals who want, and are available for work, and who have looked for a job sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the four weeks preceding the survey for different reasons, such as child care or transportation problems. Discouraged workers are a subset of the marginally attached.

Note that, the state unemployment rates (U-3) that are shown are derived directly from the CPS. As a result, these U-3 measures may differ from the official state unemployment rates for the latest 4-quarter period. The latter are estimates developed from statistical models that incorporate CPS estimates, as well as input data from other sources, such as state unemployment claims data.

More information can be found online.