Hawaii Unemployment Rate Rises to 2.8%
The jobless rate for residents ticked upward in September as more people returned to the labor force.
Updated on Oct. 24, 2026 in Employment
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Hawaii's seasonally adjusted unemployment rate climbed to 2.8% in September 2026, up from 2.7% in August and 2.2% in January. As more residents re-enter the labor force, the state's total unemployment count reached 19,450 people.
Why it matters
The rise in unemployment is largely driven by a growing labor force, as more residents seek work to offset a 5.2% increase in inflation across Honolulu over the past year. This trend suggests that while more people are looking for jobs, local employment growth has not yet kept pace with the number of job seekers.
Hawaii's September unemployment rate of 2.8% sits higher than the 2.2% recorded in January, with 19,450 people currently jobless. The state labor force now totals 694,900 individuals, reflecting a year-over-year increase of 7,550 participants.
The players
Kauai County
A Hawaiian administrative region that experienced a 5.1% unemployment rate following hurricane-related economic disruptions.
The details
The unemployment rate is determined through a household telephone survey that measures the number of people actively seeking work. While employment numbers grew by 2,650 individuals over the past year, the surge in the labor force—driven by residents returning to work to combat inflation—has outpaced job creation. In Kauai County, localized unemployment reached 5.1%, exacerbated by business disruptions during Hurricane Lowell on Sept. 7-8.
Timeline
September 2026 marked the month Hawaii's unemployment rate reached 2.8%.
Hurricane Lowell impacted Kauai on Sept. 7-8, 2026.
The unemployment rate is projected to rise to 3.0% by the end of 2026.
Money Landscape
Hawaii's labor market is currently navigating a period of expansion that follows the stability of the pre-pandemic labor market of March 2020. This shift marks a notable departure from earlier 2026 figures, reflecting ongoing adjustments to inflation and regional economic shocks.
With inflation in Honolulu rising 5.2% annually, many households are adjusting their budgets and seeking additional income, which is increasing competition for local jobs. Those navigating job transitions should monitor regional employment reports as the state projects unemployment could reach 3.0% by year-end.
The takeaway
The increase in Hawaii's unemployment rate is a symptom of more people re-entering the workforce rather than a broad contraction in hiring. Households should review their monthly spending against current inflation rates and consult with a financial professional to adjust long-term savings plans.
Further reading
For more information on state job trends, visit Employment.
Source note: This article includes information reported by Honolulu Star Advertiser.
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