Hawaii’s unemployment rate plunged dramatically for the second month in a row as the state continued making significant strides toward returning to normalcy amid an improving vaccination rate.

The seasonally adjusted jobless rate declined four-tenths of a percentage point to 8.1% in May as the state added 4,000 nonfarm payroll jobs, according to data released Tuesday by the state Department of Labor and Industrial Relations. A year earlier Hawaii’s unemployment rate stood at a record 21.9%.

Last month’s steep drop in the jobless rate follows an 0.6-percentage-point decline to 8.5% in April when Hawaii added 10,000 jobs.

The national unemployment rate fell in May to 5.8% from 6.1% the previous month.

“The decrease in unemployment rate (in May) was about one-tenth of a point faster than the U.S.,” said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. “Hawaii’s unemployment rate has been the highest in the nation since the beginning of the year, so it is expected that the drop in the rate is faster than the nation. With the lagging of international tourism recovery, Hawaii’s unemployment is expected to stay high for a few years before it goes back to the natural level of about 4%.”

Still, the state’s economic recovery is headed in the right direction.

Domestic tourism is returning to pre-COVID-19 levels, and Hawaii’s vaccination rate has climbed to 57%.

In addition, the number of people in the state’s unemployment ranks figures to keep going down after Gov. David Ige on May 30 reinstated job-search rules that require unemployed claimants to make at least three job-search contacts per week to qualify for unemployment benefits.

On Hawaii island the Mauna Kea Resort — comprising the Mauna Kea Beach Hotel and The Westin Hapuna Beach Resort — is preparing for its busiest season since January 2020 by actively seeking new employees for its culinary and housekeeping departments. The resort has a new employee referral program which awards both referring employees and new hires with a $250 bonus.

“The (improving) unemployment changes are what we expected in our forecast for the year,” Tian said. “We expect that Hawaii’s unemployment rate will be below 7% by the end of this year and the annual average unemployment will be at about 7.7% for 2021.”

With domestic tourism rebounding strongly, the state’s leisure and hospitality sector showed the largest job gain in May at 2,800, with professional and business services next at 1,100.

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, fell in May to 647,450 from 649,600 in April. The number of people employed rose to 595,300 — the highest since March 2020 — from 594,400. The employment recovery in May represented 90.3% of the January 2020 pre-COVID level.

Those unemployed declined to 52,150, the lowest since the beginning of the pandemic, from 55,200.

For nonfarm payroll jobs, the increase of 4,000, to 564,600, was the highest since March 2020. Nonfarm payroll jobs are calculated from a mail survey of employers and are considered a better indicator of job growth because of a larger sample size. Labor force data is compiled from a telephone survey of households.

“The decrease in labor force and increase in payroll job count implied that some people dropped out of the labor force because they are either discouraged or moving out of state, mainly among the self-employed,” Tian said.

The unemployment rate fell in the state’s four major counties in May 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 6.7% from 7.1%, Hawaii County’s rate dropped to 7.4% from 7.8%, Kauai County’s rate fell to 11.3% from 12.3% and Maui County’s rate declined to 10.4% from 11.2%. In Maui County, Maui’s rate fell to 10.6% from 11.5%, Molokai’s rate declined to 7.3% from 7.7% and Lanai’s rate rose to 4.6% from 4.3%.