EDITORS NOTE: A chart listing employment in Kentucky job sectors in 2004 is posted at http://workforce.ky.gov/Ann_04_chart.pdf.  Acrobat Reader is required to view charts.

Kentucky’s annual unemployment rate dropped nearly one percentage point to 5.3 percent in 2004 from 6.2 percent in 2003 as state employment grew for the first year since 2000, according to the Office of Employment and Training (OET) in the Department for Workforce Investment.

The U.S. unemployment rate decreased to 5.5 percent in 2004 from 6 percent in 2003. Unemployment rates declined in 43 states from 2003 to 2004. Hawaii posted the lowest 2004 annual jobless rate in the country at 3.3 percent, while the District of Columbia had the highest annual rate at 8.2 percent. Thirty states, including Kentucky, had lower annual unemployment rates than the U.S. annual rate in 2004, while 16 states and the District of Columbia were higher than the nation and four states had the same unemployment rate in 2004.

“The 5.3 percent rate for 2004 was the lowest annual unemployment rate since 2001 when it was also 5.3 percent. The .9 percentage point decrease in the unemployment rate in 2004 was the largest single-year drop since 1994 when the rate also fell by .9 percentage point,” said Carlos Cracraft, chief labor market analyst in the OET, an agency of the Education Cabinet. “Kentucky’s 5.3 percent in 2004 ranked it as the 23rd highest of the 50 states and the District of Columbia. The nearly full percentage point decrease from 2003 to 2004 followed three consecutive years in which the unemployment rate had increased in Kentucky.

“In addition, we had a net gain of 14,300 jobs in 2004 following three straight years of employment losses. At 2,007,500 jobs, it’s the first year we’ve been over the two million mark in total employment since 2001. Another encouraging figure is that Kentucky employment has jumped by 208,300 jobs in the last 10 years,” said Cracraft.

Ten of Kentucky’s 14 jobs sectors listed in the North American Industry Classification System (NAICS) showed employment growth in 2004.

Kentucky’s professional and business services, a sector that includes professional, scientific and technical services, management of companies, and administrative and support management, had the largest growth in 2004 with 6,500 more jobs. This category also includes temporary help agencies that provide workers to other businesses on a contractual basis. In the last 10 years, the sector has ballooned by 35,900 jobs.

“Within the professional and business services sector, the temporary help industry showed clear signs of recovery in 2004 as its employment grew by 4,300 after three consecutive no-growth years. Employers who face uncertain demand frequently hire temporary workers before hiring permanent workers so many economists consider the temporary help industry to be a barometer of trends in the broader labor market,” Cracraft said.

The leisure and hospitality sector shot up by 4,700 positions in 2004 and 27,200 in the last decade. Within the sector are arts, entertainment and recreation, and accommodation and food services. The food services and drinking places category recorded the majority of the gain in this sector both in 2004 (+4,200) and since 1994 (+23,400).  

Educational and health services rose by 3,300 jobs in 2004 and has surged by 58,100 in the last 10 years. Within this sector are educational services, which include employees at private elementary, secondary and postsecondary schools along with other establishments that provide instruction and training. Also, health care and social assistance industries, such as hospitals, nursing and residential care facilities and social assistance in the sector, has contributed 44,600 jobs in 10 years.

Kentucky’s trade, transportation and utilities sector added 1,700 jobs in 2004 and 35,000 over the past 10 years. It is the largest Kentucky sector with a total of 372,000 jobs. 

Within the sector, wholesale trade was up by 900, transportation and warehousing increased by 800 jobs, retail trade rose by 200 positions and utilities was down by 200 jobs in 2004. Within retail trade, motor vehicle and parts dealers added 300 jobs. The majority of the 800 jobs added in transportation and warehousing in 2004 was concentrated in truck transportation (+600).

“The close ties between trucking and warehousing and wholesale trade became especially evident in 2004 as both these industries recorded job gains,” Cracraft said.

Other services, a sector that includes repair and maintenance; personal and laundry services; and religious, civic, professional organizations rose by 1,300 jobs in 2004 and 20,200 since 1994. This sector has added employment in each of the last four years, said Cracraft.

The nonprofit sector increased 1,200 jobs in 2004 and has grown by 12,600 positions in the last 10 years.

The category of domestics, self-employed and unpaid family workers went up by 700 jobs in 2004. In the last decade, the sector has added 6,800 positions.

Financial activities, a sector that includes finance and insurance, and real estate, rental and leasing, jumped by 600 positions in 2004. In the last 10 years, the sector has expanded by 16,300 positions.

The natural resources and mining sector increased by 500 jobs in 2004 but decreased by 8,300 jobs since 1994. Coal mining makes up about 75 percent of this sector. Other industries included in the sector are agriculture, forestry, fishing and hunting; oil and gas extraction; and support activities for mining.

“Coal mining employment increased (+400) in 2004 for the first time in three years but it has declined by 8,000 or about 36 percent of its total employment over the past 10 years,” Cracraft said.

The construction sector recorded 400 new jobs from 2003 to 2004. The sector has gained 10,600 jobs in the last 10 years.

On the negative side, the government and public education sector showed a decrease of 3,100 jobs in 2004. Within the sector, state government, state education, local education and federal government lost jobs in 2004 while local government gained jobs. In the last 10 years, the sector has increased by 28,900 positions. 

The manufacturing sector lost 1,500 jobs in 2004 for a total of 263,900 positions.

“The manufacturing sector declined for the forth consecutive year in 2004 although the pace of job losses slowed significantly relative to job losses in 2003, 2002 and 2001. Over the last decade, Kentucky’s manufacturing sector has experienced a 25,500-job drain and the majority of that loss has been in the apparel industry (-21,200),” Cracraft said.

Within the manufacturing sector in 2004, durable goods manufacturing recorded a net gain of 100 jobs with notable growth in wood products manufacturing and machinery manufacturing and similar decreases in computer and electronic products manufacturing and electrical equipment, appliance and component manufacturing.

“The growth in machinery manufacturing may prove to be a positive sign because this industry sells its products to other manufacturers and its expansion generally coincides with increased capital investment,” Cracraft said.
In the nondurable goods manufacturing category, there were 1,600 fewer jobs in 2004 than 2003. “Five of the six manufacturing nondurable goods subsectors that are published had employment losses in 2004 with the most noteworthy being in paper manufacturing and apparel manufacturing,” Cracraft said.

In the agriculture sector, jobs decreased by 1,100 in 2004. This sector has fallen by 10,500 jobs in the past decade. This job sector includes those persons whose primary job is agricultural and do not have a job in another job sector, Cracraft said.

The information sector, which includes establishments that create, disseminate or provide the means to distribute information, reported 900 fewer jobs in 2004 and 1,000 fewer in the last 10 years.   

Unemployment statistics are based on estimates and are compiled to measure trends rather than actually to count people working.  Civilian labor force statistics include non-military workers and unemployed Kentuckians who are actively seeking work.

Learn more about the Office of Employment and Training at www.workforce.ky.gov.

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