Driven by the reopening of restaurants and the tourism industry, California unemployment dropped to 8.5% in February, the Golden State’s lowest mark of the pandemic.

With the state loosening business restrictions incrementally since the holiday spike of Covid-19 cases dwindled, the hospitality and leisure industry added over 100,000 jobs last month. In total, California employers hired 141,000 new employees, nearly erasing the deficit accrued in December and January under Governor Gavin Newsom’s most recent lockdown order.

California registered the third largest jobless rate decrease in February of any state, but its estimated 8.5% mark remains well above the nationwide figure of 6.2%.

State officials celebrated Friday’s U.S. Department of Labor release, calling it a “milestone” in what has thus far been a slow economic recovery for the nation’s most populous and richest state.

The state’s improvement was led by the hospitality and leisure industry, which resumed offering indoor dining in some parts of the state last month and combined to add 102,000 jobs. The hiring surge was a positive sign for the hard-hit industry that is still down nearly 700,000 jobs compared to February 2020.  

Overall, seven of California’s 11 industries added jobs including other services (14,100), education and health services (13,000), manufacturing (8,900), trade, transportation and utilities (8,200) and professional and business services (5,400). Meanwhile, the agriculture industry added nearly 3,000 jobs, tallying gains for the seventh straight month.

February’s performance will likely be repeated or enhanced in March and April, assuming Covid-19 cases continue to drop, says Jeffrey Clemens, economics professor at University of California, San Diego.

The hospitality industry’s February hiring-spree was certainly encouraging, but Clemens emphasized the enormity of the job losses suffered in California over the last year.

“The jobs market is climbing out of a deep hole,” Clemens added, referencing the fact California is still down 1.6 million total jobs.  

Statewide unemployment may have sunk a half-point in February, but nearly a dozen of the state’s 58 counties still have double-digit unemployment.

Los Angeles County’s rate fell to 10.9% from 12.7% the previous month, but it remains the only urban county in the double digits. The rest of the list consists of mostly rural, agricultural-producing counties like Kern (10.8%), Imperial (15.9%) and Monterey (10.9%).