Economists: US will enter recession, but Hawaii may escape worst impacts

HONOLULU (HawaiiNewsNow) - A new report from the University of Hawaii released Friday predicts the U.S. economy will enter a recession in the coming months. But, there’s a glimmer of hope for Hawaii.

The forecast from the University of Hawaii Economic Research Organization (UHERO) said the nation is heading toward a mild recession in the first half of next year as the global economy slows sharply.

Researchers said factors include Russia’s war with Ukraine inflicting an energy crisis in Europe, China’s economy continuing to suffer from its zero-COVID policy, and persistently high inflation causing central banks to raise interest rates more sharply than expected.

However, UHERO said Hawaii may escape overall net job losses as the state’s visitor industry continues to recover from the pandemic.

The report said Hawaii has seen strides in the international visitor market and strong domestic travel. Japanese visitors are also finally returning to the islands despite a weak yen and high costs weighing on their vacation spending.

While UHERO said Hawaii’s labor market is tight — with unemployment just over 4%, the ongoing visitor industry recovery will support job gains in tourism-related areas next year.

Researchers added high inflation, higher travel costs and the Fed’s interest rate hikes will still adversely impact Hawaii households and businesses.

For more on the report, click here.

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