Education Cabinet
Kentucky’s jobless rate drops

August’s 5.4 percent marked the first time in nine months that Kentucky’s seasonally adjusted preliminary unemployment rate has fallen, according to the Office of Employment and Training, an agency of the Education Cabinet. August’s rate declined from the July 2005 rate of 5.9 percent but was still above August 2004’s jobless rate of 5.1 percent.

The U.S. seasonally adjusted jobless rate went down from 5 percent in July 2005 to 4.9 percent in August 2005, according to the U.S. Department of Labor. Kentucky was one of 25 states plus the District of Columbia that reported unemployment rates above the U.S. average in August 2005.

“Before Kentucky’s unemployment rate drop in August, the jobless rate 2005 had increased in six of the seven months and remained the same from May to June. Kentucky was one of 31 states that had a lower unemployment rate in August than in July 2005,” said Carlos Cracraft, the department's chief labor market analyst.

“In addition August 2005 showed an increase of 3,400 in nonfarm payroll employment making it the sixth month during 2005 that Kentucky has recorded a gain in nonfarm payroll employment.”

Five of the 10 major nonfarm job North American Industry Classification System (NAICS) sectors had employment increases in August, while the remaining five decreased, Cracraft said. A monthly survey of business establishments revealed that Kentucky’s nonfarm employment rose by 3,400 on a seasonally adjusted basis to 1,820,700 in August.

According to the seasonally adjusted employment data, the state’s manufacturing sector rebounded in August by adding the most jobs of any sector with 5,900. Compared to August 2004, the sector had 900 more employees in August 2005.

“This August 5,900 jump in jobs followed a 5,800 drop in jobs in July. The July decrease reflected larger-than-usual vacation and other temporary shutdowns that we typically see at factories this time of the year as companies close to upgrade, retool equipment or make yearly product changes,” Cracraft said.

Kentucky’s trade, transportation and utilities sector recorded 1,900 more workers in August 2005 than in July 2005. This sector includes retail and wholesale trade, transportation and utilities businesses, and warehousing, and is the largest sector in Kentucky with 377,000 employees. Since August 2004, the number of jobs in this sector has surged by 5,000.  

“This sector has added employment in four or the past five months and is being driven by the transportation and warehousing industries. Since its most recent low in July 2003, this sector has swelled by 7,800 jobs,” Cracraft said.

The professional and business services sector reported 1,700 more jobs in August 2005 than in July 2005. This sector recorded 6,900 more employees in August 2005 than August 2004. August was the fifth month this year that this sector has shown an employment increase.

The state’s leisure and hospitality sector picked up in August 2005 with 400 new jobs. Since August 2004, the sector’s employment has gone up by 5,600 employees. The sector includes arts, entertainment, recreation, accommodations and food services and drinking places industries.

“We have experienced alternating months of employment gains and losses over the past five months in this sector. The food services and drinking places industries in this sector are responsible for about 85 percent of the over-the-year jobs gain,” Cracraft said.

Employment in the other services sector, which includes such establishments as repair and maintenance places, personal and laundry services, religious organizations, and civic and professional organizations, increased by 300 jobs from July 2005 to August 2005. Over the past 12 months, the sector has added 1,700 positions.

On the negative side, the government sector, which includes public education, had 5,000 fewer jobs in August 2005 than in July 2005. Since August 2004, this sector has lost 1,200 jobs.

“The monthly employment figures in the government sector have been dramatically influenced by the variance in the openings and closings of schools across the state. Economists make seasonal adjustments to factor out seasonal influences such as changes in weather, school openings and closings and major holidays because such factoring makes it easier to recognize nonseasonal trends. But in this case, that seasonal adjustment may have skewed the numbers somewhat in the state and local portion of this sector in August,” said Cracraft.

The educational and health services sector reported 1,000 fewer jobs in August 2005 than in July 2005. Since August 2004, the sector has added 2,900 jobs. “This is the first month since March 2005 that the educational and health services sector has dropped. Most of the 2,900 jobs that have been added over-the-year are in the health care industries,” Cracraft said.

Kentucky’s financial activities sector lost 600 jobs in August 2005. This sector, which includes establishments involved in finance, insurance, real estate and property leasing or rental, has decreased by 2,100 jobs over the past 12 months.

The state’s construction sector fell by 100 jobs in August 2005. Since August 2004, employment in this sector has risen by 4,100.

Kentucky’s information sector employment went down by 100 jobs from July 2005 to August 2005. This sector, which includes firms involved in publishing, Internet activities and broadcasting and news syndication, has 800 fewer jobs since August 2004.

The U.S. Bureau of Labor Statistic’s monthly estimate of the number of employed Kentuckians for August 2005 was 1,884,961 on a seasonally adjusted basis. This figure is up 7,587 from the 1,877,374 employed in July 2005, and up 13,937 from the 1,871,024 employed in August 2004.

 The monthly estimate of the number of unemployed Kentuckians for August 2005 was 106,825. This figure is down 11,753 from the 118,578 unemployed in July 2005, but up 5,747 from the 101,078 Kentuckians unemployed in August 2004.

The monthly estimate of the number of Kentuckians in the civilian labor force for August 2005 was 1,991,786. This figure is down 4,166 from the 1,995,952 recorded in July 2005, but up 19,684 from the 1,972,102 recorded for August 2004. 

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