San Diego’s unemployment rate dropped to its lowest level in a year in May as tourism hiring picked up.

The jobless rate was 3.6 percent, down from 4.1 percent in April, state labor officials said Friday. It was lower than the national average of 3.7 percent, and the California rate of 4.5 percent.

Leisure and hospitality jobs, which serve the tourist industry, added 2,600 new positions in a month. Work in the category includes jobs in hotels, casinos, bars and restaurants. Its typical to see a surge in hiring around this time as the tourism season begins.

Kelly Cunningham, of the San Diego Institute for Economic Research, said the report was a sign the local economy might be getting back to normal after the pandemic disruptions and the slow crawl back to historical averages.

“That’s a pretty good unemployment rate,” he said. “It’s good news, especially after such high unemployment following the COVID shutdowns.”

From April to May, other industries adding jobs were government (mainly education) with 1,100; trade, transportation and utilities (retail, warehousing) with 300; Financial activities (real estate, insurance, investments) with 300; and services (laundry, maintenance, religious) with 300.

The biggest job losses, 600 positions, were in professional and business services, which include work in legal, scientific, waste management, architectural industries. Other job losses were in private education and health services, down by 400, and information (telecommunications, newspapers, publishing industry), down by 100.

One reason San Diego’s unemployment rate keeps improving is the labor force continues to shrink. The labor force — adults who either have a job or are actively looking for one —dropped by 8,900 people in a single month to 1.58 million. The labor force is down by 10,300 people in a year.

Cunningham said one factor likely impacting the labor force was people leaving San Diego because of high costs. U.S. Census Bureau data shows close to 31,000 more people moved out of the county than moved in between July of 2022 and July of 2023 — almost double what it was a year earlier.

Another sign that things might not be all that it seems with the economy: The number of Americans with second jobs continues to grow. In May, 8.4 million Americans held multiple jobs, up from 7.7 million at the same time last year, according to the U.S. Bureau of Labor Statistics.

When adjusted for seasonal swings, the San Diego County unemployment rate in May was 4.1 percent, said Daniel Enemark, chief economist of the San Diego Regional Policy and Innovation Center. That compares to the seasonally adjusted U.S. average of 4 percent and 5.2 percent in California.

“The labor market remains tight,” he said. “Economists estimate the ‘natural’ or non-cyclical rate of unemployment to be 4.4 percent, so most economists would consider this full employment.”

Enemark said the labor force drop was notable and below pre-pandemic highs.

“For our region to achieve our economic potential,” he said, “we need to draw more residents into the labor force.”

On an annual basis, San Diego County’s fastest growing sector was private education and health services, adding 11,400 jobs. It was followed by leisure and hospitality with 4,700; government with 4,000; construction with 2,200; services with 1,400; and retail with 500.

Professional and business services, typically the region’s highest paying sector, lost 10,400 jobs. Other losers were manufacturing, dropping 4,200 jobs; and financial activities and information — both losing 1,400 each.

The most job openings in May were for retail salespersons, according to state data that aggregates job postings during the month. There were 2,363 job postings for retail people, followed by posts for registered nurses with 2,114, first-line supervisors of retail workers with 1,164, and customer service representatives with 1,090.

The top employers, by job postings, were UC San Diego, Sharp Healthcare, Scripps Health, Apple and Starbucks.

State officials do not seasonally adjust jobless rates for individual counties. Compared with other parts of California, San Diego County was on the low end with its unadjusted rate of 3.6 percent.

The rate was 5.2 percent in Los Angeles County, 3.2 percent in Orange County, 3 percent in San Francisco County, 3.4 percent in Santa Clara County, 5.1 percent in Santa Cruz County and 4.4 percent in Riverside County.