After enjoying the nation's lowest unemployment rate for 24 straight months, Hawai'i saw its seasonally adjusted unemployment rate rise to 3 percent in May, tying the Islands for second-best in the country.

Hawai'i started the year with a 15-year, record low unemployment rate of 2.4 percent in January. The unemployment rate has risen steadily in the months since to 2.5 percent in February, 2.6 percent in March and 2.8 in April.

May's 3 percent unemployment rate tied Hawai'i with Vermont and Virginia, which all trailed South Dakota's 2.9 percent rate.

Like others, Lawrence Boyd, a labor economist at the University of Hawai'i-West O'ahu, did not worry yesterday about Hawai'i's slip to No. 2 in the country.

"You can't read anything into it," Boyd said. "There's nothing there to worry about. Statistically, there's not much difference between a 2.8 percent rate and 3 percent."

Boyd expects to see the unemployment rate nudge up even higher in the next few months as interest rates continue to cool down what has been an otherwise hot construction industry.

"Hawai'i has a very small workforce compared to almost every other state," Boyd said, "so it doesn't take a lot to affect the statistics. But they're really just small blips."

Beth Busch, the executive director of the WorkForce Job Fair that drew a record 206 job recruiters in May and the upcoming Job Quest Job Fair in September, said: "Three percent is still full employment. We're still bullish."

The Sept. 19 job fair at the Neal Blaisdell Center already had 99 recruiters signed up by yesterday. At the same time last year, only a third as many recruiters had committed to Job Quest.

So for at least the rest of 2006, Busch does not anticipate any slowdown in Hawai'i's job market.

"We're just seeing little corrections," she said.

James Hardway, spokesman for the state Department of Labor and Industrial Relations, said Hawai'i's rising unemployment rate could be, in part, a result of a residential real estate market that "seems to be cooling."

"But when you're talking about an unemployment rate of 3 percent, that's still full employment," Hardway said. "And we're still going to have that problem of a lack of labor."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.