Hawaii’s economy is heading into what experts say will be a mild recession, and local family-support groups are already bracing for the fallout on those living paycheck to paycheck. UHERO’s latest forecast warns the downturn will push prices higher and slow job growth, a combination community workers say will land hardest on lower-income households. Staff at Child & Family Service called the outlook “that’s a scary kind of forecast” and say they are gearing up to expand early interventions like benefits navigation, budgeting support and housing-readiness help. The nonprofit reports that nearly 90% of the families it serves are ALICE or below the poverty line, and its leaders argue that culturally responsive, trauma-informed services can keep small financial shocks from turning into full-blown crises. Clients who connected with the agency point to concrete changes, including steadier work, safer housing and more stable custody arrangements, after getting help.
UHERO Numbers That Matter
In its December forecast, UHERO projects that inflation will build next year and “peak around 3.5% in late 2026,” effectively adding about $1,400 a year to the costs faced by a typical Hawaii household, according to UHERO. The report pins the slowdown on a tourism downturn, weaker job growth and renewed inflation pressures as tariffs filter through to consumer prices. It also notes that the recent federal government shutdown disrupted paychecks and caused some programs like SNAP to lapse temporarily. While UHERO still expects construction activity and a few federal projects to provide a partial offset, the forecast warns that any rebound is likely to be weak and uneven.
How Child & Family Service Is Responding
Child & Family Service, which runs family-strengthening programs statewide, says it relies on an evidence-based Transition To Success model to help families stabilize and move toward self-sufficiency, according to the organization’s website. Amanda Pump, CFS president and CEO, told the Honolulu Star-Advertiser that the agency’s approach is culturally responsive and trauma-informed, with a focus on spotting barriers before families slip deeper into poverty. Pump also said that nearly 90% of the households CFS serves are ALICE or are living below the poverty line, which she argued shows why catching problems early is critical. The paper also highlights clients such as 24-year-old Corina Graham, who says CFS helped her secure employment and stabilize custody arrangements.
Why Lower-Income Households Will Feel It First
UHERO stresses that the strain of higher prices and any gaps in federal benefits will fall most heavily on ALICE and poverty-level households, which often have little or no buffer against even modest jumps in rent, food or transportation costs, according to UHERO. Nonprofits and social-service agencies warn that delayed federal pay or short-term lapses in assistance can quickly translate into missed rent and food insecurity for families already living close to the edge. That reality, advocates say, is why programs that help with basics like bus passes and school uniforms, along with support for Section 8 requalification and shelter transitions, remain core parts of the safety net…