Education and Workforce Development Cabinet
Kentucky’s jobless rate plunges to nearly seven-year low at 5.7 percent in December

Press Release Date:  Thursday, January 22, 2015  
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FRANKFORT, Ky. (Jan. 22, 2015) — Kentucky’s seasonally adjusted preliminary unemployment rate nearly matched the U.S. rate as it plunged to a preliminary 5.7 percent rate in December 2014 from a revised 6 percent in November 2014, according to the Office of Employment and Training (OET), an agency of the Kentucky Education and Workforce Development Cabinet. This is the lowest rate for the state since February 2008 when it was 5.7 percent.


The U.S. seasonally adjusted jobless rate for December 2014 declined to 5.6 percent from 5.8 percent in November 2014, according to the U.S. Department of Labor. 


Kentucky’s preliminary December 2014 jobless rate was 2.2 percentage points below the 7.9 percent rate recorded for the state in December 2013.


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 December 2014, Kentucky’s civilian labor force was 1,986,782, a decrease of 6,912 individuals compared to the previous month. Employment was up by 605, and the number of unemployed declined by 7,517.


“2014 has been a defining year for the Kentucky labor market,” said economist Manoj Shanker of the OET. “We have pulled ourselves out of the so-called ‘jobless recovery’ that followed the recession, and brought down unemployment rates to levels last seen almost seven years ago.”


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 decreased by 800 jobs in December 2014 from the month before, but increased by 32,400 positions since December 2013.


“This slight month-to-month decline in employment is an unexpected blip, but it’s countered by the surge in employment on a year ago basis,” said Shanker. “In the last quarter, monthly job growth has averaged 5,300 jobs, while the average growth was just 1,000 jobs per month for the same quarter a year ago.”


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


Kentucky’s professional and business services sector added 1,500 positions in December 2014 from a month ago. The year-over-year gain was more substantial with the addition of 8,000 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. The month-to-month gain came principally from the professional, scientific and technical services subsector.


“With the exception of a decline in January 2014, business services have shown steady month-to-month growth during the last 18 months. Growth in business services continues to be a key indicator of economic health,” said Shanker.


Kentucky’s manufacturing sector increased by 1,300 jobs in December 2014. Since December 2013, employment in manufacturing has increased by 4,200 jobs.


“Manufacturing has seen a strong uptick in 2014. Exports were a key component at the beginning of the year, but lately domestic demand has driven up the demand for durable goods,” said Shanker. “That’s a consequence of consumer confidence and low energy prices.” 


The leisure and hospitality sector posted a jump of 1,000 positions in December 2014. Since December 2013, this sector has grown by a substantial 12,000 jobs for an increase of 6.7 percent. This sector includes arts, entertainment, recreation, accommodation and food services.


The construction sector gained 300 jobs in December 2014 from a month ago. Since December 2013, employment in construction has declined by 600 positions.   


Employment in the government sector, which includes public education, public administration agencies and state-owned hospitals, rose by 100 in December 2014, and 1,500 positions since last December.


The financial activities sector posted no change in employment between November and December 2014. The sector has lost 1,400 positions over the last 12 months.


The information sector decreased by 300 jobs in December 2014. This segment has risen by 1,000 positions since December 2013. The industries in this sector include traditional publishing as well as software publishing; motion pictures and broadcasting; and telecommunications.


Employment in the mining and logging sector dropped by 700 in December 2014. The industry has lost 800 jobs since last November.  


Employment in the other services sector, which includes repairs and maintenance, personal care services, and religious organizations, went down by 700 positions in December from a month ago. This sector posted a decrease of 600 jobs from a year ago.


Employment in the educational and health services sector fell by 1,600 positions in December 2014, but gained 4,900 jobs over the year. Health care jobs, which account for nearly 90 percent of employment in this sector, had a month-to-month decrease of 1,200 jobs in December but expanded by 3,900 positions over last year.


“The drop in month-to-month employment is explained partially by the strong growth in professional and business services. Hospitals and physicians’ offices tend to out outsource payroll and clerical work to temporary service employees, resulting in a decline in the core health services sector,” said Shanker.


Kentucky’s trade, transportation and utilities sector lost 1,700 jobs in December 2014 compared to November 2014. From a year ago, employment has grown by 4,200 jobs. This is the largest sector in Kentucky accounting for one-fifth of all nonfarm jobs.


“The decline seems to be a result of statistical smoothing factors that are used to adjust the employment spike that normally occurs in December,” said Shanker. 


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.


Learn more about Kentucky labor market information at