More would-be workers poured into Hawaii’s labor market in June — so much so that they pushed up the state unemployment rate for the first time in 21 months amid a recovering local economy.

The number of people statewide with jobs rose by 750 in June, but 1,650 additional people were in the job market. As a result, Hawaii’s unemployment rate rose to 4.3% in June from 4.1% in May.

Eugene Tian, the state’s chief economist, said the uptick that upset a lengthy trend of reduced or flat unemployment isn’t bad given the ongoing labor shortage, and that the increase was driven largely by a still- rebounding tourism industry.

“We see more people coming back to the labor force,” he said.

Tian noted that the size of Hawaii’s labor force, which includes people employed or seeking employment, in June was the biggest it’s been since March 2020, right before unemployment soared in connection with COVID-19 restrictions.

There were 677,250 people in the local labor force in June, up from 675,600 in May and 673,250 in June 2021. In March 2020, just before major coronavirus pandemic impacts hit employment, there were 684,250 people in Hawaii’s labor force.

Within the labor force in June, 28,900 people were unemployed, up from 28,000 in May, according to data released Thursday by the state Department of Business, Economic Development and Tourism.

DBEDT also reported that 648,350 people were employed in June, up from 647,600 in May.

Tian said it takes time for more job seekers to find employment mainly because the needs, offerings and desires of employers and job seekers often don’t match up.

“There’s a mismatch,” he said, adding that it takes time for job seekers to be absorbed even when many employers are desperate for workers. “That is normal.”

Jefferson Santo, a manager at Paia Fish Market, said the restaurant chain with three locations on Maui and two on Oahu needs more workers — essentially, all positions at every location.

“We can’t find people,” he said. “We don’t have enough employees.”

Kahala Hotel & Resort is recruiting online to fill 45 jobs. Marriott has about 70 job openings posted online for seven Hawaii hotels it manages, including the Moana Surfrider, Royal Hawaiian Hotel and Ritz-Carlton Residences Waikiki Beach.

Representatives of Liliha Bakery participated in two job fairs in the past month as part of an effort to staff a soon-to-open fifth Oahu location, at Pearl Highlands Center.

“We’ve just been continually looking (to hire),” said Connie Wong, marketing lead for the restaurant and bakery company.

Wong said business has been slowly doing better as people continue to deal with evolving coronavirus situations.

Tian said Hawaii’s main economic engine, the tourism industry, is about 88% recovered from an initial severe downturn triggered by the pandemic, and likely has slowed amid the latest surge in COVID-19 cases, which emerged in May.

As a result, he expects Hawaii’s unemployment rate will be about flat through August and then start to improve in September, buoyed in part by increases in international visitor arrivals. By the end of the year, unemployment should dip below 4%, Tian predicted.

At its worst, Hawaii’s unemployment rate was 22.4% in April 2020, which shot up from 2.2% in March 2020. Since then the rate has subsided, and only one time prior to June was there an uptick. That happened in September 2020 when the rate rose to 14.2% from 13.9% the month before.