Kentucky’s unemployment rate at 4.9 percent in August


Staff Report



FRANKFORT – Kentucky’s seasonally adjusted preliminary unemployment rate for August 2016 was 4.9 percent from a revised 5 percent in July 2016, according to the Office of Employment and Training (OET), an agency of the Kentucky Education and Workforce Development Cabinet.

The preliminary August 2016 jobless rate was 0.4 percentage points lower than the 5.3 percent rate recorded for the state in August 2015.

The U.S. seasonally adjusted jobless rate for August 2016 was 4.9 percent, according to the U.S. Department of Labor.

Labor force statistics, including the unemployment rate, are based on estimates from the Current Population Survey of households. It is designed to measure trends rather than to count the actual number of people working. It includes jobs in agriculture and those classified as self-employed.

In August 2016, Kentucky’s civilian labor force was 1,969,093, an increase of 1,552 individuals compared to the previous month. Employment was up by 1,970, and the number of unemployed decreased by 418.

“August was a rare month in which everything came together for Kentucky’s labor market. The labor force expanded, employment increased, unemployment dropped, and the unemployment rate matched the national average at 4.9 percent,” said economist Manoj Shanker of the OET. “If you have to look for a downside, then it is definitely the sluggish movement in wages.”

In a separate federal survey of business establishments that excludes jobs in agriculture and people who are self-employed, Kentucky’s seasonally adjusted nonfarm employment increased by 1,300 jobs in August 2016 from the month before and was up 19,400 positions since August 2015.

“In August the goods producing sector suffered a sharp decline with losses in manufacturing, construction and mining. But the overall job situation improved because of strong growth in the service economy,” said Shanker. “Private sector employers added 4,600 jobs in August, and government employment expanded by 1,600.”

Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to this survey, seven of Kentucky’s 11 major nonfarm North American Industry Classification System (NAICS) job sectors registered gains in employment, while three declined and one stayed the same from the previous month.

Employment in the educational and health services sector added 1,700 positions in August 2016, and had a robust gain of 11,500 jobs from a year ago. Health care jobs account for about 15 percent of all nonfarm employment in Kentucky and increased by 1,700 positions for the month, and showed strong gains over the year with the addition of 12,500 jobs. The private educational services sector remained flat in August, and was down by 1,000 from a year ago.

The leisure and hospitality sector rose by 1,700 jobs in August 2016 from a month ago. Since August last year, the sector has added 2,100 jobs. This sector includes arts, entertainment, recreation, accommodation, and food services.

“Growth in the hospitality sector reflects consumers’ expectations. When discretionary spending at restaurants rises it indicates that consumers are positive about the outlook for the labor market,” said Shanker. “That seems to be confirmed by the strong rise in the national consumer confidence index.”

The government sector, which includes public education, public administration agencies and state-owned hospitals, increased by 1,600 jobs in August 2016 but declined by 2,000 positions compared to last August.

The financial activities sector expanded by 500 jobs in August 2016 from a month ago. The sector has added 4,800 jobs since last August.

Kentucky’s trade, transportation, and utilities sector rose by 300 jobs in August 2016 from a month ago. This is the largest sector in Kentucky with nearly 400,000 jobs accounting for one-fifth of all nonfarm employment. Since August 2015, this sector has expanded substantially with a gain of 7,300 jobs. Retail trade gained 100 jobs over the previous month, and increased by 5,600 jobs over the year, while transportation and warehousing added 400 jobs from a month ago and gained 1,800 positions over the year.

The information sector grew by 300 jobs in August 2016. This segment has declined by 1,000 positions from a year ago. The industries in this sector include traditional publishing as well as software publishing; motion pictures and broadcasting; and telecommunications.

Employment in the other services sector, which includes repairs and maintenance, personal care services, and religious organizations, increased by 100 positions in August 2016 from a month ago. This sector has increased by 300 jobs from a year ago.

Kentucky’s professional and business services was unchanged from July 2016 to August 2016. Year-over-year, there was a gain of 1,200 jobs. This category includes establishments engaged in services that support the day-to-day activities of other organizations, including temporary employment services and payroll processing.

Employment in the mining and logging sector fell by 200 jobs in August 2016 from a month ago. The industry has declined by 2,600 positions from a year ago.

The construction sector dropped by 400 jobs in August 2016 from a month ago. Since August 2015, construction jobs have decreased by 1,900 positions.

Kentucky’s manufacturing sector declined by 4,300 jobs in August 2016 compared to the previous month. Since August 2015, employment in manufacturing has declined by 300. Durable goods account for two-thirds of the manufacturing sector and grew by 2 percent from a year ago with the addition of 3,100 jobs, whereas nondurable goods lost 3,400 jobs over the year.

Civilian labor force statistics include nonmilitary workers and unemployed Kentuckians who are actively seeking work. They do not include unemployed Kentuckians who have not looked for employment within the past four weeks.

Kentucky’s statewide unemployment rate and employment levels are seasonally adjusted. Employment statistics undergo sharp fluctuations due to seasonal events, such as weather changes, harvests, holidays and school openings and closings. Seasonal adjustments eliminate these influences and make it easier to observe statistical trends. However, because of the small sample size, county unemployment rates are not seasonally adjusted.

Staff Report

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