Hawaii’s unemployment rate dipped to an eight-month low of 3.5% in March as the number of people in the jobless ranks shrank by 600.

The seasonally adjusted rate in March was down from 3.6% in February and matched the U.S. rate for the month, according to data released Thursday by the state Department of Business, Economic Development and Tourism.

“Though the March unemployment rate dipped to 3.5%, the labor market has been basically flat during the past six months,” said Eugene Tian, chief economist for DBEDT. “This is reflected in the labor force and employment numbers, as well as the weekly initial unemployment claims, which have been stable at 1,100 in the last six months.”

Hawaii’s labor force, which includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed, inched up to 678,450 from 678,350 in February. Those employed rose to 654,850 from 654,200. The number of people unemployed declined to 23,600 from 24,200.

Tian expects the labor market to continue to tread water for the rest of the year.

“The labor market will stay flat this year at around 3.5%,” he said. “We see tourism continuing to recover, but other industries are leveling off during the last few months and this trend will continue toward the end of this year.”

He said both the U.S. economy and Hawaii’s economy are experiencing flat growth.

“During the past 13 months — since February 2022 — U.S. unemployment averaged 3.6% and Hawaii unemployment averaged 3.5%,” Tian said.

Nonfarm payroll jobs edged down in March to 632,500 from 632,600 in February, with the leisure and hospitality sector showing the biggest job increase with 300 added positions.

Private education and health services had the largest job loss with 1,500. Most of that decline was in health services due to a hospital strike on Maui County and a contraction in ambulatory health care services.

Nonfarm payroll jobs are calculated from a mail survey of employers and are considered a better indicator of job growth due to a larger sample size than the labor force data, which is compiled from a telephone survey of households. In the payroll count, one person might be counted multiple times if that person has multiple jobs.

The jobless rate was mixed in the state’s four major counties in March from February. 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 slipped to 2.9% from 3.1%, and Kauai County’s rate dipped to 3.0% from 3.1%. Hawaii County’s rate rose to 3.5% from 3.4%, and Maui County’s rate increased to 3.4% from 3.2%. In Maui County, Maui’s rate rose to 3.4% from 3.2%, Molokai’s rate jumped to 5.1% from 4.7% and Lanai’s rate rose to 2.8% from 1.9%.