The state unemployment rate plunged a full percentage point in February to 9.2% — its lowest level since the pandemic began — as businesses in Hawaii continued to reopen, more people returned to work and the tourism industry gained momentum.

“Hawaii’s tourism had a better recovery in February than January,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “February visitor arrivals recovered by 31% from the same month in 2019 with 8,403 visitors a day. While in January, visitor arrivals recovery was 21% with 5,548 visitors a day.”

The state’s labor market was humming along with an all-time low unemployment rate of 2.0% in January 2020 before COVID-19 emerged in Hawaii in March 2020. The unemployment rate subsequently soared to an all-time high of 21.9% in both April and May. The rate has been slowly dropping since that time but had been in double digits until the February numbers were released Thursday by the state Department of Labor and Industrial Relations.

Tian sees the momentum continuing.

“Visitor arrival numbers are better than expected in March at 12,682 visitors per day for the first 24 days of March, a 40% recovery from the same month in 2019,” he said. “This means more people are coming back to their jobs in the tourism industry.”

The seasonally adjusted jobless rate in Hawaii improved last month from 10.2% in January as 1,800 more nonfarm payroll jobs were added, according to the DLIR report. The jobless rate was the second to be released this month because labor force numbers for each calendar year are revised annually in March to reflect revised population figures and a change in modeling methodology. The January number was released two weeks ago.

Tian said the unemployment rate for the year likely will end up better than what DBEDT forecast in its quarterly report issued March 1.

“The DBEDT economic forecast showed that the unemployment rate for 2021 was 8.2%,” Tian said. “Given that tourism industry performed better than expected, the unemployment rate would be better than that rate if we do projections today. I would expect the unemployment for 2021 would be around 7%.”

The state’s labor force. which includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed, slipped in February to 655,350 from 655,750 in January. Tian said the decline was likely attributable to either people moving out of state or being discouraged from looking for jobs.

The number of people employed rose to 595,200 from 588,100. Those unemployed declined to 60,150 from 67,650. Labor force data are compiled from a telephone survey of households.

Nonfarm payroll jobs, which are calculated from a mail survey of employers and are a better indicator of job growth because of a larger sample size, rose in February to 544,300, up from 542,500 in January.

The leisure and hospitality sector, which has been devastated by the pandemic that began in March 2020, added 1,400 jobs over the month to represent the largest gain of any of the sectors. Most of those jobs occurred in the accommodation area.

The unemployment rate fell in the state’s four major counties in February from the previous month. State and national labor force data is adjusted for seasonal factors, but the county jobs data does not take into account variations such as the winter holiday and summer vacation seasons.

Honolulu County’s jobless rate decreased to 7.6% from 8.9%, Hawaii County’s rate fell to 8.3% from 9.6%, Kauai County’s rate declined to 12.9% from 14.6% and Maui County’s fell to 12.3% from 13.8%. In Maui County, Maui’s rate fell to 12.7% from 14.1%, Molokai’s rate dropped to 6.3% from 8.6% and Lanai’s rate declined to 4.2% from 7.2%.

Hawaii had the highest unemployment rate in the country in January, but its ranking won’t be determined until today when the U.S. Department of Labor releases the figures for the rest of the states. The U.S. unemployment rate in February was 6.2%.

OUT OF WORK

Hawaii’s monthly seasonally adjusted unemployment rates since the beginning of 2020:

MONTH RATE

January 2020 2.0%

February 2020 2.1%

March 2020 2.1%

April 21.9%

May 21.9%

June 14.1%

July 14.1%

August 14.1%

September 14.8%

October 14.0%

November 10.3%

December 10.3%

January 2021 10.2%

February 2021 9.2%

Source: State Department of Labor and Industrial Relations