Hawaii's unemployment rate dropped to 2.7% in July, marking its lowest level since before the COVID-19 pandemic devastated the state's economy. The seasonally adjusted rate fell from 2.8% in June, representing a significant milestone in the islands' economic recovery journey.
According to Honolulu Star-Advertiser, the achievement means 669,750 people were employed and 19,300 were unemployed out of a total labor force of 689,050. The last time Hawaii's jobless rate was below 2.7% was in March 2020 when it hit 2.1%, before unemployment soared to historic highs above 20% during the pandemic's peak.
County-by-County Breakdown
Unemployment rates varied across the state's counties, with Honolulu Star-Advertiser reporting Hawaii County had the highest unseasonally adjusted rate at 3.1%. Maui County followed at 2.8%, Honolulu at 2.5%, and Kauai at 2.3%.
Within Maui County specifically, the figures showed notable variations: Molokai recorded 5.3%, Lanai had 3.8%, and the island of Maui itself registered 2.7%. These disparities reflect ongoing recovery challenges, particularly in areas still rebuilding from impacts including the devastating August 2023 Maui wildfires, as noted by the Hawaii Department of Business, Economic Development and Tourism.
National Context
Hawaii's performance stands out against national trends, where the jobless rate reached 4.2% in July, up from 4.1% in June. This positions the state well below the national average and demonstrates exceptional economic resilience compared to mainland counterparts.
Data from the Hawaii Department of Business, Economic Development and Tourism shows the civilian labor force averaged 690,050 people in the first quarter of 2025, an increase of 11,400 people or 1.7% from the same quarter of 2024. Civilian employment averaged 671,700 people, representing a 12,100 person or 1.8% increase compared to the same period.
Broad-Based Job Growth
The employment gains have spread across multiple sectors, according to state economic data. Health Care & Social Assistance led job creation with 2,100 new positions, a 2.8% increase, followed by Food Services & Drinking Places adding 1,500 jobs.
Other Services gained 1,200 jobs representing a 4.5% increase, while Arts, Entertainment, and Recreation added 1,000 jobs for a 7.6% boost. The Government sector contributed 2,900 jobs, a 2.3% increase compared to the first quarter of 2024.
Future Outlook
State economists project the unemployment rate will average 2.9% in both 2025 and 2026, with gradual improvement to 2.8% in 2027 and 2.7% in 2028. However, challenges loom including tourism slowdown, persistent consumer inflation, and national and international economic uncertainties that could impact Hawaii's continued recovery trajectory.
