Home » Kentucky’s 2016 annual unemployment rate falls to 5%

Kentucky’s 2016 annual unemployment rate falls to 5%

Ky. hits lowest annual rate in 17 years; nonfarm employment adds 28,100 jobs

FRANKFORT, Ky. (March 6, 2017) – Kentucky’s annual unemployment rate dropped to 5 percent in 2016 from 5.3 percent in 2015, while nonfarm employment gained 28,100 jobs, according to the Office of Employment and Training (OET), an agency of the Kentucky Education and Workforce Development Cabinet. It was the lowest annual jobless rate for the state since 2000 when the rate was 4.2 percent.

“At 5 percent, Kentucky’s unemployment rate has reached a low not seen since 2000,” said Kentucky Labor Market Information Director Kate Shirley Akers, Ph.D. “Total nonfarm employment reached a historical high in 2016 at 1,914,200. Employment in the largest sector, trade, transportation and utilities, was also at historic levels.”

The U.S. annual unemployment rate dropped to 4.9 percent in 2016 from 5.3 percent in 2015.

The U.S. Bureau of Labor Statistics’ estimate of the number of employed Kentuckians for 2016 was 1,892,273. This figure is up 30,751 from the 1,861,522 employed in 2015, and the highest since 2008 when the statewide employment was estimated at 1,900,683.

The estimated number of unemployed Kentuckians for 2016 was 99,701, down 4,443 from the 104,144 unemployed in 2015. The number of those unemployed is down by 16,058 compared to 10 years ago.

“This is the lowest number of unemployed Kentuckians on record since 2000 when the number stood at 81,974,” Akers said. “By all of these labor measures, Kentucky has made great strides in the last few years.”

In 2016, the estimated number of Kentuckians in the civilian labor force was 1,991,974. This is up 26,308 from the 1,965,666 recorded in 2015, but down from 10 years ago when the civilian labor force was 2,029,231.

Labor force statistics, including the unemployment rate, are based on surveys designed to measure trends.

Annual unemployment rates declined in 39 states in 2016 compared to 2015. Among the states, New Hampshire and South Dakota tied for the lowest rate at 2.8 percent each, while Hawaii was the third lowest at 3 percent. New Mexico, 6.7 percent; Alaska, 6.6 percent; and Louisiana, 6.1 percent, had the highest rates in 2016.

Kentucky and New Jersey, both at 5 percent, had the 19th highest annual unemployment rates among all states and the District of Columbia in 2016. Kentucky was one of 20 states, including the District of Columbia, with annual unemployment rates above the U.S. annual rate in 2016. Four contiguous states, Indiana, Missouri, Tennessee and Virginia, had unemployment rates lower than the national average. Two others, Illinois, 5.9 percent, and West Virginia, 6 percent, had unemployment rates higher than the U.S. average.

In a separate federal survey of business establishments that excludes jobs in agriculture and people who are self-employed, Kentucky’s nonfarm payroll in 2016 increased by 28,100 or 1.5 percent to 1,914,200 employees.

Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to this survey, nine of Kentucky’s 11 major nonfarm job sectors listed in the North American Industry Classification System (NAICS) showed employment growth in 2016, while two reported losses.

According to the annual employment data, Kentucky’s trade, transportation and utilities sector jumped by 9,700 jobs or 2.5 percent in 2016. Over a 10-year period, the number of jobs increased by 16,300 or 4.3 percent. It is the largest Kentucky sector with a total of 397,200 jobs or one-fifth of Kentucky’s nonfarm employment. Within the sector in 2016, wholesale trade was up by 1,500 jobs, retail trade employment increased by 4,300, and businesses in transportation, warehousing and utilities added 3,900 jobs.

“Increased transportation and warehouse activity is a good indicator of a growing economy because it reflects a demand for goods,” said Akers.

Kentucky’s manufacturing sector expanded by 7,500 jobs or 3.1 percent in 2016 for a total of 248,700 positions. In the last 10 years, the manufacturing base has declined by 4.6 percent with the loss of 12,000 jobs.

The leisure and hospitality sector grew by 5,000 positions in 2016, and jumped by 24,500 or 14.5 percent since 2006. Within the sector are arts, entertainment and recreation, and accommodation and food services.

The educational and health services sector rose by 5,000 jobs in 2016 and has surged by 28,600 or 11.9 percent in the last 10 years.

“Growth in this this sector has been driven by gains in healthcare,” said Akers. “While educational services employment has declined, employment in healthcare and social assistance has increased by 15 percent over the last decade.”

Within this sector, health care and social assistance industries, such as hospitals, nursing and residential care facilities and social assistance businesses, added 5,300 jobs in 2016, and expanded by 31,200 jobs for a robust 15 percent gain in the past 10 years. Educational services in this sector include employees at private elementary, secondary and postsecondary schools along with other establishments that provide instruction and training. Educational services lost 300 jobs in 2016, and declined by 2,600 jobs in the last 10 years.

The financial activities sector gained 1,500 jobs from a year ago. Over the past 10 years this sector has added 4,600 jobs or 5.2 percent.

Other services, a sector that includes repair and maintenance; personal and laundry services; and religious, civic, and professional organizations, increased by 1,400 jobs in 2016. The sector has lost 10,300 jobs or 13.6 percent in the last 10 years.

Kentucky’s construction sector added 1,200 jobs in 2016, for a growth of 1.6 percent. The sector has declined by 6,100 jobs or 7.3 percent since 2006.

The state’s professional and business services, a sector that includes professional, scientific and technical services, management of companies, and administrative and support management, added 400 jobs in 2016 for an expansion of .2 percent. In the last 10 years, the sector has surged by 36,000 jobs or 19.7 percent. This category also includes temporary help agencies that provide workers to other businesses on a contractual basis.

“Driven by long-term gains in administration and support and waste management, the professional and business services sector has experienced the largest percent growth among sectors over the last 10 years,” said Akers. “Since 2006, employment in this area has increased by more than 20 percent.”

The information sector, which includes establishments involved in publishing, Internet activities, data processing, broadcasting and news syndication, increased by 200 jobs in 2016 from a year ago. It has lost 5,500 jobs or 19.4 percent compared to 10 years ago.

Employment in the mining and logging sector fell by 25 percent with the loss of 3,500 jobs in 2016. Over a 10-year period the sector has contracted by more than half, losing 12,400 jobs. Other industries included in the sector are forestry; oil and gas extraction; and support activities for mining.

The government sector, which includes federal, state and local employment in public education, public administration agencies and state-owned hospitals, dropped by 400 jobs or .1 percent 2016. In the last 10 years, the sector has grown by 13,400 positions or 4.4 percent.

Unemployment statistics are based on estimates and are compiled to measure trends rather than actually to count the number of people working. Civilian labor force statistics include non-military 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.

Learn more about Kentucky labor market information at www.kylmi.ky.gov.