LIHU‘E — The unemployment rate increased last month on Kaua‘i to more than 9 percent, according to statistics from Hawai‘i Workforce Informer. The jump from 8.5 percent in May is likely due to the “ending of the school year,” said
LIHU‘E — The unemployment rate increased last month on Kaua‘i to more than 9 percent, according to statistics from Hawai‘i Workforce Informer.
The jump from 8.5 percent in May is likely due to the “ending of the school year,” said state Department of Labor and Industrial Research and Statistics Office Acting Chief Francisco Corpuz.
Since the rates reported for the counties are not seasonally adjusted — changed to coordinate with student schedules, holiday employment and other factors — they “tend to rise in June,” he said, as “more students enter the labor market in search of summer/temporary jobs.”
The unemployment rate factors in the number of people filing for benefits along with those who are ineligible or not filing like students, Corpuz said. Students are only counted as unemployed while they are not attending school.
So why did the U.S. Bureau of Labor Statistics report that Hawai‘i’s overall unemployment rate fell from 6.6 percent in May to 6.3 percent last month? The answer is because those figures were seasonally adjusted based on formulas created by economists to “dial” out “background noise” such as increased hiring by retailers in November, according to economist Howard Dicus.
But since “there wasn’t that much hiring … the adjusted jobless rate is too adjusted,” he said in a recent article entitled “People are from Earth, economists are from Uranus.”
The economist’s formulas would be more accurate if “each seasonal phenomenon was the same every year” and “if they could perfectly measure it,” he writes.
This would mean, according to Dicus, the state’s unemployment rate did not actually fall, it rose to 6.9 percent.
Nonetheless, unemployment overall has been dropping and “is lower than it was a year ago,” he said.
Kaua‘i is “currently bringing up the rear on recovery,” Dicus said.
Visitor arrivals are “roughly flat” compared to other Neighbor Islands and new car sales are down even though they are rising statewide, he said.
Still, Dicus said he is “optimistic that Kaua‘i will see some rebounding of economic conditions in the next few months.”
The number of unemployed individuals on Kaua‘i increased by 250 between May and June while the number of persons employed increased by 150, said Office of Economic Development Director George Costa.
This kind of fluctuation in the labor force and unemployment rate can happen in the “early stages of recoveries if people become more optimistic about job prospects and start seriously looking for work again,” said University of Hawai‘i Department of Economics Professor Byron Gangnes.
In addition, unemployment data collected “for a small place like Kaua‘i tends to be very volatile month-to-month,” he added. “So I certainly don’t think this (unemployment rate increase) is an indication that the labor market is on a deteriorating track.”
Visit blogs.hawaiinewsnow.com/howard, www.hiwi.org or www.uhero.hawaii.edu for more information.
