Hawaii forecasts slower 2026 growth, modest job gains and 3.8% Honolulu inflation
Hawaii’s economy is expected to keep expanding in 2026, but at a slower pace, according to a new state forecast that also points to modest job gains and continued pressure from consumer prices.
The Hawaii Department of Business, Economic Development and Tourism projected real gross domestic product growth of about 1.6% in 2026. The forecast, released July 8, calls for growth to gradually improve to about 1.9% by 2028.
For residents, the outlook combines continued economic expansion with a slower pace of improvement in jobs and income. DBEDT forecast Honolulu consumer-price inflation at 3.8% in 2026, meaning the agency expects prices to rise substantially during the year, though that pace is projected to moderate to 2.5% by 2029.
Growth continues, but more slowly
The forecast covers a new 2026–2029 period and includes economic growth, employment, inflation, personal income and visitor activity. It is a projection rather than a final accounting of what will happen.
DBEDT expects Hawaii’s real economy to grow by 1.6% in 2026. That rate is projected to improve to 1.9% by 2028, suggesting a gradual strengthening rather than a sharp near-term acceleration.
The forecast also expects visitor arrivals to continue increasing during the period. Visitor activity is one of the conditions that could affect the outlook, along with inflation, productivity and broader policy and economic conditions. The available release does not provide a revised county-by-county outlook for the state.
Jobs and income show limited gains
Nonagricultural wage-and-salary jobs were projected to increase 0.4% in 2026. DBEDT expects that pace to gradually accelerate, reaching 0.7% by 2029.
The civilian unemployment rate was forecast at 2.4% in 2026 and is projected to decline to 2.3% by 2029. Those figures describe the expected unemployment rate, not a guarantee of the rate Hawaii will ultimately record.
Real personal income was projected to grow 0.9% in 2026. The forecast identifies that increase as below the 2025 increase, which was associated in part with Maui wildfire settlement payments. The release does not attribute all income growth or weakness to tourism alone.
The employment projections provide a relatively modest outlook for workers: payroll jobs are expected to grow, but at less than 1% in each of the forecast figures identified for 2026 through 2029. The U.S. Bureau of Labor Statistics’ Hawaii Economy at a Glance page provides current statewide employment indicators and sector data as an independent official reference for the employment context.
Inflation remains a household concern
DBEDT’s Honolulu Consumer Price Index forecast calls for 3.8% inflation in 2026, easing to 2.5% by 2029. The figures are estimates of the expected change in consumer prices; they do not establish that household costs will rise by exactly 3.8%.
That distinction matters because the forecast describes a statewide economic direction while using the Honolulu consumer-price measure for its inflation projection. The release does not provide a revised county-by-county inflation outlook.
For households, the forecast signals that purchasing-power pressure may remain elevated even as Hawaii continues to grow. At the same time, projected real personal-income growth of 0.9% in 2026 indicates that inflation and income will both shape how residents experience the broader economic expansion.
What to watch through 2029
The next known period covered by the state’s outlook runs through 2029. DBEDT expects visitor arrivals to keep increasing, payroll-job growth to reach 0.7% by that year, unemployment to edge down to 2.3% and Honolulu inflation to ease to 2.5%.
Those are scheduled forecast benchmarks, not final outcomes. Actual conditions will depend on whether visitor activity follows the projection and how inflation, productivity, policy decisions and broader economic conditions develop. The forecast points to continued expansion for Hawaii, but with slower 2026 growth, moderate employment gains and consumer-price pressure that is expected to decline gradually rather than disappear immediately.
Sources
- DBEDT Projects 1.6 Percent Growth for 2026, Office of Governor Josh Green / Hawaii DBEDT
- Hawaii Economy at a Glance, U.S. Bureau of Labor Statistics
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