Thousands of people poured back into the Orange County labor force in February, as local companies boosted hiring and expressed the highest confidence in eight years.

The county’s unemployment rate dropped sharply in February, to 6.5 percent from 7.1 percent in January and 8.1 percent in February 2012, California’s Employment Development Department reported.

“We’re not just recovering, we’re hitting on all cylinders,” said Wallace Walrod, chief economic adviser to the Orange County Business Council.

Walrod called “pretty amazing” the 35,200 payroll jobs added between February 2012 and February 2013, a jump of 2.6 percent. At the same time, the labor force – people employed and those in the job market – grew 1.3 percent year over year.

“Unemployment dropped even though a lot more people are looking for work,” Walrod said. “This is the first time in a long time that there’s been such a big improvement. People are getting more confident there are actually jobs out there in the economy.”

Nonetheless, Orange County still counted 101,000 fewer jobs than it had in February 2007.

California’s job picture also brightened in February, although less dramatically. Statewide payroll jobs grew by 263,800 year over year, a 2.1 percent rise. California unemployment dropped to 9.6 percent in February, from 9.8 percent in January and 10.8 percent a year earlier.

The U.S. unemployment rate was 7.7 percent in February.

In another positive sign for Orange County, Cal State Fullerton’s quarterly survey of 600 local businesses found a large increase in those planning to boost hiring and build inventory in anticipation of more sales. It was the highest level of confidence the survey has reported since July 2004.

“Businesses are in a buoyant mood compared to the last several years and before the Great Recession,” said Anil Puri, dean of Cal State Fullerton’s Mihaylo School of Business and Economics.

According to the survey, the proportion of owners, CEOs and managers who expect overall business activity to improve or stay the same increased to 95 percent, from 83 percent three months earlier.

In addition, 57.4 percent of executives expect growth in their own industry, as compared with 48 percent in the previous quarter. And 44.6 percent intend to hire more, compared with 34.2 percent in the last quarter.

That confidence is reflected in the county’s falling rate of unemployment and growing payroll job numbers.

“The improvement comes partly from the reduction of uncertainty that was caused by federal tax issues at the end of last year,” Puri said. “Now that those are settled, even though taxes increased, businesses have a lot more clarity.”

Congress has yet to resolve budget issues, he acknowledged, but “for businesses, those are not as dramatic or attention-grabbing as taxes.”

Professional and business services showed the biggest jump in Orange County jobs during the 12 months leading up to February, an increase of 9,700 out of the total 35,200. Most of the rise within that category came in administration and support services positions, including temp agencies.

“This is a leading indicator that businesses will continue to grow in the next three to six months,” Walrod said. Although many of the new jobs may be temporary, studies show “most of them will become full time,” he added.

Leisure and hospitality scored the second biggest gain (8,200), reflecting record numbers of visitors for Disney, Orange County’s largest employer, as well as a general willingness to spend more on restaurants and travel.

“During a recession, when everyone cuts back, eating out is the first thing to go,” Puri said. “Now we are seeing a boost in discretionary spending.”

Educational and Health Services jumped by 7,300 jobs, with the highest gains in health care services.

Financial activities jobs grew by 6,400, reflecting a surge in lending as the housing market strengthens. Construction added 2,300 jobs.

Manufacturing jobs rose by 1,100. Government employment was the only major sector to shrink, by 600.

Joblessness in California’s economy is spread unevenly across age groups, according to state employment officials.

Workers aged 45 to 54 have the lowest unemployment, at 7.9 percent. Among 55 to 64 year olds the jobless rate is 8.2 percent; it is 8.6 percent for those over 65.

Younger people have the highest unemployment, with a 34.5 percent rate for 16 to 19 year olds; a 15.4 percent rate for 20 to 24 year olds; and a 9.9 percent rate for 25 to 34 year olds.