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flag Hawaii’s economy faces a mild recession through 2026 due to falling tourism, rising unemployment, and federal funding cuts.

flag Hawaii faces a mild recession through 2026, driven by a weakening U.S. economy, declining tourism, and federal policy changes. flag Visitor arrivals dropped 8% from April to July, with international travelers down 9%, and real spending is projected to fall by over $600 million. flag Domestic tourism remains key but is threatened by stagnant job growth, rising inflation, and federal layoffs. flag Unemployment is expected to rise from 3% in 2025 to 3.6% in 2026. flag Construction is a bright spot due to federal projects, but rising material costs and tariffs may hinder progress. flag A looming healthcare crisis looms as federal funding cuts could leave 41,000 residents without coverage. flag Condo markets, especially on Maui, are weakening amid high mortgage rates and regulatory uncertainty.

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