Outlook for the Economy
4th Quarter 2025 Report
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Despite the 43-day federal government shutdown, Hawai‘i’s economic outlook improved due to robust visitor expenditures, lower-than-expected inflation, a healthy labor market, and stronger-than-expected national economic performance. Near term growth remains subdued, however, due to the impacts of tariffs, overall policy uncertainty, and sluggish visitor arrivals
Based on the most recent data from the U.S. Bureau of Economic Analysis, Hawai‘i’s real gross domestic product (GDP) grew 2.5 percent in the second quarter of 2025 compared to the second quarter of 2024. Inflation, as measured by the Honolulu Consumer Price Index for Urban Consumers (CPI-U), decreased from 4.1 percent in January 2025 to 2.3 percent in July to 2.2 percent in September.
After growing in the first half of 2025, the total number of visitor arrivals by air decreased by 78,900 or 3.2 percent in the third quarter of 2025 compared to the same quarter of the previous year. In October 2025, total visitor arrivals by air and cruise ship were 749,095, down 2.9 percent compared with October 2024. However, total visitor spending was up 6.7 percent, which indicates Hawai‘i is attracting a higher spending visitor demographic.
The construction industry continued to grow. Construction payroll jobs (not seasonally adjusted) reached a record 41,300 in August 2025 (latest data available). Total private building permit values for Honolulu, Maui County, and Hawai‘i County increased 14.9 percent through the first nine months of 2025 compared to the same period last year. The $8.4 billion in government contracts awarded in 2023 and 2024 will help sustain construction, which is expected to support economic growth in the years ahead.
Hawai‘i’s labor market improved based on data through August 2025 (latest available). Hawai‘i’s labor force grew 1.2 percent in the first eight months of 2025 compared to same period in 2024. Non-agricultural wage and salary jobs grew 2.1 percent year-to-date through August compared to the same period in 2024.
The unemployment rate (not seasonally adjusted) in August was 2.6 percent, 0.6 percentage points lower than in August 2024. Hawai‘i had the third lowest unemployment rate in the nation, tied with Vermont.
State general excise tax collections increased by 2.4 percent in the third quarter of 2025 compared to the same period a year ago.
At the national level, the most recent (November 2025) Blue Chip Economic Indicators report, the consensus of 50 economic forecasting organizations, projected the U.S. economy to grow at 1.9 percent in 2025, and 1.8 percent in 2026. Most international markets are expected to have softer growth due to global uncertainty. DBEDT estimates that Hawai‘i’s real GDP will increase by 1.6 percent in 2025, 1.5 percent in 2026, 1.7 percent in 2027, and 1.9 percent in 2028.
Visitor arrivals are projected to remain stable in 2025 and will improve starting in 2026. Visitor spending is projected to be $21.6 billion in 2025 and is expected to increase to $23.4 billion by 2028.
Non-agriculture payroll job growth is expected to increase by 1.4 percent in 2025, by 0.9 percent in 2026 and 2027, and by 0.8 percent in 2028.
The civilian unemployment rate is forecast to edge down from 2.8 percent in 2025 and 2026 to 2.7 percent in 2027 and 2028.
Personal income is expected to grow at 4.6 percent in 2025, 4.3 percent per year in 2026 and 2027, and 4.4 percent in 2028.
The Honolulu Consumer Price Index for Urban Consumers is estimated to increase 2.8 percent in 2025. Consumer inflation is expected to gradually decrease to 2.3 percent by 2028, reflecting easing inflationary pressures over time.
Hawai‘i’s population is expected to increase by 0.1 percent each year between 2025 and 2028.
| Economic Indicators | 2023 | 2024 ¹ | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|---|
| Actual | Forecast | |||||
| Total population (thousands) ² | 1,441 | 1,446 | 1,448 | 1,450 | 1,452 | 1,454 |
| Visitor arrivals (thousands) ³ | 9,658 | 9,701 | 9,698 | 9,761 | 9,851 | 9,960 |
| Visitor days (thousands) ³ | 86,426 | 84,516 | 84,084 | 84,457 | 85,085 | 85,885 |
| Visitor expenditures (million dollars) ³ | 20,866 | 20,720 | 21,550 | 22,070 | 22,687 | 23,370 |
| Honolulu CPI-U (1982-84=100) | 326.0 | 340.2 | 349.7 | 359.2 | 368.0 | 376.4 |
| Personal income (million dollars) | 96,961 | 102,704 | 107,441 | 112,026 | 116,824 | 121,919 |
| Real personal income (millions of constant 2017$) | 72,620 | 74,362 | 75,613 | 76,817 | 78,213 | 79,764 |
| Non-agricultural wage & salary jobs (thousands) | 632.3 | 639.0 | 648.1 | 654.2 | 659.8 | 665.3 |
| Civilian unemployment rate (%) | 2.9 | 3.0 | 2.8 | 2.8 | 2.7 | 2.7 |
| Gross domestic product (million dollars) | 111,740 | 117,627 | 122,725 | 127,937 | 133,269 | 138,885 |
| Real gross domestic product (millions of chained 2017$) | 89,642 | 91,878 | 93,308 | 94,703 | 96,353 | 98,184 |
| Gross domestic product deflator (2017=100) | 124.7 | 128.0 | 131.5 | 135.1 | 138.3 | 141.5 |
| Annual Percentage Change | ||||||
| Total population | 0.1 | 0.3 | 0.1 | 0.1 | 0.1 | 0.1 |
| Visitor arrivals | 4.6 | 0.5 | 0.0 | 0.7 | 0.9 | 1.1 |
| Visitor days | 1.4 | -2.2 | -0.5 | 0.4 | 0.7 | 0.9 |
| Visitor expenditures | 5.4 | -0.7 | 4.0 | 2.4 | 2.8 | 3.0 |
| Honolulu CPI-U | 3.1 | 4.4 | 2.8 | 2.7 | 2.5 | 2.3 |
| Personal income | 5.5 | 5.9 | 4.6 | 4.3 | 4.3 | 4.4 |
| Real personal income | 3.9 | 2.4 | 1.7 | 1.6 | 1.8 | 2.0 |
| Non-agricultural wage & salary jobs | 2.3 | 1.1 | 1.4 | 0.9 | 0.9 | 0.8 |
| Civilian unemployment rate 4 | -0.3 | 0.1 | -0.2 | 0.0 | -0.1 | -0.1 |
| Gross domestic product | 6.9 | 5.3 | 4.3 | 4.2 | 4.2 | 4.2 |
| Real gross domestic product | 2.0 | 2.5 | 1.6 | 1.5 | 1.7 | 1.9 |
| Gross domestic product deflator | 4.8 | 2.7 | 2.7 | 2.7 | 2.4 | 2.3 |
2/ July 1 count.
3/ Visitors who came to Hawai‘i by air and by cruise ship. Expenditures includes supplementary business expenditures.
4/ Absolute change from previous year.
Source: Hawai‘i State Department of Business, Economic Development and Tourism, December 5, 2025.