Unemployment is the lowest it’s been in 50 years, at a national average of 3.7%, according to new data from the Bureau of Labor Statistics. In Hawaii, it’s even lower: 2.3%. More incredibly, that’s actually an increase on the state’s April and May low of 2%.
It sounds great, but it isn’t necessarily such good news for locals. “This may indicate that our economy has entered into a slow growth path,” Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism, told the Honolulu-based Star Advertiser.
The national number is not unambiguously positive either, despite trumpeted claims from the US president to the contrary. A very low unemployment rate often indicates dark clouds ahead, as it’s all but impossible to sustain such rates for very long. In 1929, for example, unemployment dipped to 3.2%, then soared to 15.9% within two years, sparked by the Depression. In 1952, the rate’s most recent extreme low, it sat at 2.7%, then shot up to 5% when the Dow returned to 1929 levels. Finally, in 1970, unemployment moved from a low of 3.5% up to 6.1%, as a recession took hold.
This low rate doesn’t guarantee that a crisis is on the horizon—but it does suggest that we should expect a return to what’s sometimes called the “natural rate” of unemployment, or roughly 5%, which accounts for fluctuations in the job market and the ordinary movements of workers between jobs.