Faial's early economic growth was propelled by cultivation and processing of woad, a blue-coloured dye produced from a plant of the same name (in Latin, Isatis tinctoria).
The economy of the island generated some prosperity until 1957, when the Capelinhos Volcano erupted in the western part of the island, reactivating emigration to North America, supported by promises of aid made by Massachusetts senator John F. Kennedy to the affected populations.