Economists say federal policies pushing Hawaii into recession, leaving college graduates in limbo

HONOLULU (HawaiiNewsNow) - Economists say Hawaii is heading into a recession late this year or next, primarily because of the policies by the Trump administration.

Friday’s forecast from the University of Hawaii Economic Research Organization (UHERO) said inflation and uncertainty caused by the president’s tariffs and the mass layoff of federal workers will slow Hawaii’s economy down to the point it actually shrinks.

Tourism is already down 3-6% and UHERO predicts arrivals to decline even more, amounting to a loss of $1.6 billion in visitor spending by next year.

Click here to view the full UHERO forecast: Federal policies push Hawaii toward mild recession.

It’s harsh news for those graduating this week into an uncertain job market. Students graduating from UH campuses over the next couple weeks say they are already feeling it.

Luckily, Talia Agliam has a job with a local airline. A Lanai High graduate, she’s leaving college this week with degree in sociology, and advisors have warned her about the job market.

“A lot of my mentors have made it clear to me that the competition is up there, and so being able to find a way that separates me from the competition is going to be very important,” she said. “Our society is going in a direction some of us can’t necessarily catch up to.”

Communications major Quentin Shores has three campus jobs doing social media.

“I’ve applied to over 100 jobs at this point. Haven’t heard back from a lot of them,” he said. “A lot of those jobs have gotten rid of the position entirely.”

Shores hopes his new media skills give him an edge.

“I think that’s why I pushed myself really hard all of college with getting internships and different opportunities with social media companies is because I just really wanted to, put myself in a separate category as the other peers,” he said.

Professor Steven Bond-Smith with UHERO said graduating into a recession can be a huge challenge.

“People who have graduated into recession, your job opportunities are less prosperous,” he said.

In a briefing with reporters, UHERO economists said uncertainty has caused employers to slow hiring and investment, while securely employed families hesitate to make big purchases.

They said construction remains solid, for now, but young people hoping to start careers in soft fields like communications and sociology could be impacted beyond the recession.

“Even when the recession is over in a year or two’s time, you’ll still got one or two years less experience than someone who’s just graduating at that point, and that then has lasting effects throughout people’s careers,” Bond-Smith said.

With conditions nationwide no better, it’s unclear whether Hawaii’s issues will lead to an exodus of local graduates.

Agliam considered mainland colleges, but sees her career in Hawaii.

“I feel that it would be almost a disservice to gain all this knowledge, gain all this experience, and gain strength in all these skills and then give it back to a community that I know nothing about,” she said.

Originally from Ohio, Shores says he may move to prevent competing with his classmates.

“I definitely don’t want to be in a position where I’m potentially taking a job away from somebody who’s grown up here their entire lives,” he said.