Hawaii’s labor market
continues to rank among the best
in the country.
The state’s seasonally adjusted rate plunged three-tenths of a point to 2.2% in November from September and now has fallen by a half-percentage point over the last three reporting periods, according to data released Tuesday from the state Department of Business, Economic Development and Tourism.
There was no unemployment data for October due to the federal government shutdown.
The 2.2% rate maintained Hawaii’s ranking as the second lowest in the country, according to state data released Wednesday — a day later — by the U.S. Bureau of Labor Statistics.
Only South Dakota was lower in November at 2.1%.
The last time Hawaii’s rate dropped below 2.2% was in March 2020 when it hit 2.1% just before the pandemic started.
Hawaii’s low number caught Eugene Tian, DBEDT’s former state chief economist, by surprise.
“I was surprised to see the unemployment rate dropped to 2.2% in November,” said Tian, who retired at the end of May. “It is close to the historical low of 2.0% Hawaii experienced during the last four months of 2017. Hawaii ranks as one of the best labor markets in the nation.”
Hawaii’s rate has dropped from 2.7% in August to 2.5% in September to 2.2% in November.
Nationally, the U.S. unemployment rate was 4.6% in November, up by two-tenths of a point from September.
Tian said Hawaii’s unemployment rate fell sharply mainly due to a large increase in the number of people employed. Between September and November, the state’s labor force jumped by 1,000, or 0.15%, but the number of people employed increased by 2,800, or 0.42%.
“The faster increase in employment, with a slower increase in the labor force, made the unemployment rate low,” Tian said. “The increase in employment was due to the increase in payroll jobs (1,700 between September and November) and self-employment at 1,100.”
The state’s labor force, which is compiled from a telephone survey of households, edged up in November to 688,000 from 687,000 in September. The labor force includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed. The number of people employed rose to 672,650 from 669,850 while those unemployed fell to 15,350 from 17,200.
In a separate survey, an increase in nonfarm payroll jobs in November from September was mainly driven by a 1,000 increase in construction jobs and a 1,000 gain in professional and business services.
Nonfarm payroll jobs are calculated from a mail survey of employers and are considered a better indicator of job growth due to a larger sample size than the labor force data, which is compiled from a telephone survey of households. In the payroll count, one person might be counted multiple times if that person has multiple jobs.
Tian said construction jobs continued their ascent in 2025 with the November number at a historical high of 42,000, while the values of completed construction, as measured by the contracting tax base, decreased every month between May and September 2025 (the latest data available is September), and the value of private building permits issued decreased every month between August and November 2025 (latest data available is November).
Tian said Hawaii’s unemployment numbers could rise in March when the Bureau of Labor Statistics benchmarks data of the previous year based on complete survey data. He noted that monthly data is based on sample data.
“Due to sampling errors for the monthly data, it is possible that the labor statistics may overstate the current conditions and the corrections will be released in March this year,” he said. “The lagging effect of new hires and activities may also contribute to the distortion of the labor statistics. I expect the unemployment rates will be adjusted toward higher levels when the numbers are benchmarked in March.”
Tian said if more people join the labor force, the state’s unemployment rate will rise when the number of employed people stabilizes.
“In the last few months, the labor force participation rate was stable at 60.4% (August-November),” he said. “Hawaii’s current labor force participation rate is lower than the U.S. at 62.5% (November 2025) and lower than the Hawaii monthly average of 61.1% in 2019. If labor force participation goes higher, the unemployment rate is likely to rise.”
While the state’s seasonally adjusted unemployment rate fell, all of the state’s four major counties saw increases. State and national labor force data are adjusted for seasonal factors, but the county jobs data are not seasonally adjusted and thus do not take into account variations such as the winter holiday and summer vacation seasons.
Honolulu County’s rate rose to 2.3% from 2.2%. Hawaii County’s rate increased to 2.7% from 2.5%. Kauai County’s rate rose to 2.3% from 2.2%. And Maui County’s rate increased to 2.6% from 2.5%. Within Maui County, Maui island’s rate rose to 2.6% from 2.3%, Molokai’s rate fell to 4.0% from 5.9% and Lanai’s rate dropped to 1.1% from 2.2%.
