Kentucky’s unemployment rate at 5% for September

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

The preliminary September 2016 jobless rate was 0.4 percentage points lower than the 5.4 percent rate recorded for the state in September 2015.

The U.S. seasonally adjusted jobless rate for September 2016 was 5 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 September 2016, Kentucky’s civilian labor force was 1,981,794, an increase of 12,605 individuals compared to the previous month. Employment was up by 10,571, and the number of unemployed increased by 2,034.

“The sharp increase in the labor force signals that more workers are returning to the workforce as they see the employment situation improving. For the last five months our unemployment rate has hovered around 5 percent, which is effectively full employment,” said economist Manoj Shanker of the OET. “Though there has been an uptick in labor force participation, Kentucky is still ranks near the bottom of the stack in participation rates.” 

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 11,500 jobs in September 2016 from the month before and was up 25,800 positions since September 2015.

“Nonfarm employment, or what’s normally called the jobs number, is at a historical high. The September report delivered an unexpected boost to the flat situation we have experienced so far in 2016, “said Shanker. “The biggest increase was in professional and business services which was buoyed by jobs in temp services.”

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

Employment in Kentucky’s professional and business services increased by nearly 3 percent with the addition of 6,200 jobs in September 2016 from a month ago. Year-over-year there was a gain of 6,000 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.

“Typically, when businesses plan to expand they test the waters by hiring more temp employees. The robust gain in temp hiring—after a nine-month decline—is reassuring,” said Shanker. 

The leisure and hospitality sector gained 2,500 jobs in September 2016 from a month ago. Since September last year, the sector has expanded by nearly 2 percent with the addition of 3,500 jobs. This sector includes arts, entertainment, recreation, accommodation, and food services.

Kentucky’s trade, transportation, and utilities sector expanded by 1,200 jobs in September 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 September 2015, this sector has expanded substantially with a gain of 9,300 jobs. Retail trade added 1,000 jobs over the previous month, and gained 7,600 jobs over the year, while transportation and warehousing added 700 jobs from a month ago and increased 2,400 positions over the year. 

The manufacturing sector rose by 700 jobs in September 2016 compared to the previous month. Over the year, however, manufacturing employment declined by 1,300. Durable goods account for two-thirds of the manufacturing sector and grew by 1.5 percent from a year ago with the addition of 2,400 jobs, while nondurable goods lost 3,700 jobs over the year. 

The government sector, which includes public education, public administration agencies and state-owned hospitals, increased by 600 jobs in September 2016 but declined by 2,100 positions compared to last September. Almost all of the month-to-month gain was in federal employment.

Employment in educational and health services sector was up by 500 positions in September 2016, and had a robust gain of 10,600 jobs, or 4 percent, from a year ago. Health care jobs account for about 15 percent of all nonfarm employment in Kentucky and decreased by 200 positions for the month, but showed strong gains over the year with the addition of 12,000 jobs.

The financial activities sector expanded by 300 jobs in September 2016 from a month ago. The sector has added 4,600 jobs since last September.

Mining and logging sector jobs increased by 100 in September 2016 from a month ago. The industry has declined by 2,300 positions from a year ago.

Employment in the information sector remained unchanged in September 2016. This segment has declined by 900 positions from a year ago. The industries in this sector include traditional publishing as well as software publishing; motion pictures and broadcasting; and telecommunications.

The construction sector dropped by 200 jobs in September 2016 from a month ago. Since September 2015, construction jobs have decreased by 1,800 positions.

Employment in the other services sector, which includes repairs and maintenance, personal care services, and religious organizations, decreased by 400 positions in September 2016 from a month ago. This sector has increased by 200 jobs from a year ago.

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.

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