A resurgence in Hawaii’s tourism market and a loosening in COVID-19 restrictions led to higher job growth in March and pushed down the state’s unemployment rate to its lowest level in nearly a year.

The seasonally adjusted jobless rate dipped two-tenths of a percentage point to 9.0% — its lowest since the pandemic began — as businesses in Hawaii continued to reopen, more people returned to work and the tourism industry gained momentum. In March 2020 the jobless rate was 2.1% before it soared to an all-time high of 21.9% the following month when the pandemic sent the state’s economy into a tailspin.

Nonfarm payroll jobs rose by 5,300 in March to 550,400, up from 545,100 in February, according to data released Thursday by the state Department of Labor and Industrial Relations. An increase of 3,300 jobs in the state’s leisure and accommodations sector accounted for more than 62% of those additional jobs and helped drive the growth, according to Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism.

“Unemployment improved in March mainly because of the recovery of tourism,” Tian said. “With the increase in the vaccination rate, tourism recovery will accelerate in the next few months. I expect Hawaii’s unemployment rate will drop to around 6% during the second half of 2021.”

In March, Hawaii had an average of 13,846 daily visitor arrivals, a 46% recovery from the same month in 2019. That’s a significant improvement from February when the state had an average of 8,403 visitor arrivals and the recovery was 30% from the same month in 2019. Through the first 14 days of April, Hawaii’s daily visitor count was 17,712, a further increase from March, and now the recovery rate is 63% from April 2019.

Some 91.9% of Hawaii businesses opened for business in March from only 40% open in April 2020, and 89.6% opened in December, according to the most recent Hawaii Commercial Rent Survey.

The state’s unemployment rate is still far from its all-time low 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 February.

The U.S. unemployment rate for March was 6.0%.

Hawaii’s economy also has been helped by Oahu moving into the less restrictive Tier 3 of the city’s four-tier economic recovery plan Feb. 25 after being in Tier 2 since Oct. 22. Tier 3 permits social and outdoor recreational gatherings of up to 10 people and restaurants to seat 10 people at a table, up from five now. Honolulu Mayor Rick Blangiardi on March 11 announced modifications to Tier 3, including allowing bars to reopen under the same conditions as restaurants and extending the curfew until midnight.

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 March to 649,550 from 655,850 in February. Tian said the decline was likely attributable either to people moving out of state or being discouraged from looking for jobs.

The number of people employed fell to 590,800 from 595,250. Those unemployed declined to 58,750 from 60,600. Labor force data is compiled from a telephone survey of households.

The 5,300 job increase in nonfarm payroll positions, which are calculated from a mail survey of employers, are considered a better indicator of job growth because of a larger sample size.

The unemployment rate was mixed in the state’s four major counties in March 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 7.7%, and Maui County’s rate dipped to 12.2% from 12.3%. Hawaii County’s rate held at 8.4%. Kauai County’s rate rose to 13.0% from 12.9%. In Maui County, Maui’s rate fell to 12.6% from 12.7%, Molokai’s rate rose to 6.6% from 6.3% and Lanai’s rate increased to 4.9% from 4.4%.

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

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 2020 21.9%

May 2020 21.9%

June 2020 14.1%

July 2020 14.1%

August 2020 14.1%

September 2020 14.8%

October 2020 14.0%

November 2020 10.3%

December 2020 10.3%

January 2021 10.2%

February 2021 9.2%

March 2021 9.0%

Source: State Department of Labor and Industrial Relations