Slow economic growth for Hawaii, slow hiring pace for nation

Published: Sep. 5, 2014 at 9:49 AM HST|Updated: Sep. 5, 2014 at 12:31 PM HST
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HONOLULU (HawaiiNewsNow) - We're getting some glum economic indicators, both in the islands and across the nation.

The Council on Revenues sharply lowered its forecast for Hawaii economic growth, and hours later Washington reported the slowest hiring pace since the year began.

The newest report, issued Friday by the Bureau of Labor Statistics in Washington D.C., said the nation's jobless rate fell one tenth to 6.1 percent in August, but the net increase in jobs was only 142,000, the smallest expansion of any month since the year began.

Wall Street is prospering but Main Street isn't feeling it.

In Hawaii, the lower economic forecast from the Council on Revenues means a potential funding crunch for the state government.

The council, a collection of economists from state, private sector and academe, whose forecast is the official basis of the must-be-balanced state budget, changed its growth forecast from 5.5 to 3.5 percent.

That works out to roughly $100 million that state officials thought they'd get but probably won't.

Hawaii jobless claims fell last week below 10,000, and new claims fell almost to 1,400, but it's probably a blip, since long holiday weekends usually produce a lag in processing and counting claims.

One month does not a trend make, and a forecast isn't reality, merely an educated guess of what reality will be later on. But there have been a number of economic indicators this year to suggest anemic growth, including slow hiring and weak consumer spending.

On the other hand, factory production on the mainland has been strong, and exports sales seem fairly healthy. This has led to a debate among economists, including the Federal Reserve Board members, about what's going on and what should be done.

While the U.S. Fed has been phasing out its program of buying bonds to keep interest rates low, the Euro Central Bank this week reduced interest rates to try to spur economic activity.

In Hawaii, the economists on the Council on Revenues have had an ongoing parallel debate about the pace of growth, and the one number they agreed to this week masks a wide variety of individual predictions by council members, some more bullish, some more bearish.

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