The newest University of Hawaiʻi Economic Research Organization (UHERO) report focuses on Hawaiʻi’s record-high visitor numbers and record-low unemployment.
UHERO reports that the economy’s rate of expansion has slowed as the business cycle has matured, and risks to the external environment have increased. But at present there are no signs of an imminent downturn. Instead, further growth at a restrained pace is the most likely outcome for the next few years at least.
- The global economy is having its best year since 2011, boosted by the U.S. fiscal expansion, healthy labor markets, and high business and consumer confidence.
- The U.S. economy will gradually slow from this year’s tax-supported growth pickup. Canada and Mexico are benefiting from U.S. strength, and progress on a NAFTA replacement reduces the chance of escalating trade tensions within the region.
- Despite significant local damage from natural disasters, Hawaiʻi’s tourism industry is having another record year, supported by a strong global economy, abundant airline seats and ready access to non-traditional accommodations.
- The dominant U.S. market will remain the main driver of visitor growth, but gains will slow after this year’s strong showing.
- Departure of a large number of military personnel and dependents suppressed population growth last year. Demographic factors are gradually slowing the pace of labor force expansion, which will limit gains in nonfarm payrolls to just over half a percent per year.
- Growth in personal income has been lackluster, despite the record low unemployment rate. Because of the prevalence of lower-wage jobs, per-capita income is falling short of the national average, and income inequality has also risen.