Education Cabinet
Kentucky’s unemployment rate goes up in July

Kentucky’s seasonally adjusted preliminary unemployment rate rose to 5.9 percent in July 2005 from 5.7 percent June 2005, according to the Office of Employment and Training, an agency of the Education Cabinet. The July 2005 rate was above July 2004’s jobless rate of 5.3 percent.

The U.S. seasonally adjusted jobless rate remained at 5 percent from June 2005 to July 2005, according to the U.S. Department of Labor.

“Typically in July, many facilities have vacation and model changeover shutdowns. Often, these layoff incidents fall during the one-week July survey period when employment and unemployment statistics are gathered for the month, so it’s a good possibility that we will see a rebound in the number of nonfarm payroll employment in August. The 4,500 decrease in nonfarm employment in July marks the first month this year that we have seen a downturn in this figure since January 2005. However, Kentucky’s nonfarm employment has jumped by 27,000 since July 2004,” said Carlos Cracraft, the department's chief labor market analyst.

“Kentucky’s jobless rate of 5.9 percent ranked as the ninth highest among all states in July,” he said. “Kentucky was one of 32 states that had a higher unemployment rate in July 2005 than in June 2005.”

Four of the 10 major nonfarm job North American Industry Classification System (NAICS) sectors had employment increases in July, while the remaining six decreased, Cracraft said. A monthly survey of business establishments revealed that Kentucky’s nonfarm employment fell by 4,500 on a seasonally adjusted basis to 1,816,700 in July.

According to the seasonally adjusted employment data, the educational and health services sector reported 1,400 more jobs in July 2005 than in June 2005. Since July 2004, the sector has added 4,400 jobs. “The educational and health services sector has been one of our most consistent gainers this year. In the last four months, this sector has added 3,600 jobs with the majority being in the health care industries,” Cracraft said.

The government sector, which includes public education, had 900 more jobs in July 2005 than in June 2005. Since July 2004, this sector has added 3,700 jobs.

Kentucky’s trade, transportation and utilities sector recorded 800 more workers in July 2005 than in June 2005. This sector includes retail and wholesale trade, transportation and utilities businesses, and warehousing, and is the largest sector in Kentucky with 375,000 employees. Since July 2004, the number of jobs in this sector has shot up by 3,500.  

“Approximately 80 percent of the 3,500 over-the-year gain in this sector was in the transportation and warehousing industries. Trucking activity is being carefully monitored by economists seeking to determine what influence increased fuel costs are having on this industry,” Cracraft said.

The financial activities sector added 200 jobs in July 2005. This sector, which includes establishments involved in finance, insurance, real estate and property leasing or rental, has decreased by 1,500 jobs over the past 12 months.

On the negative side, the state’s manufacturing sector fell by 6,100 jobs in July. Compared to July 2004, the sector had 1,100 more employees in July 2005.

“This decrease reflected larger-than-usual shutdowns in July, lowering the employment level in this sector to some 259,300 employees. Many factories routinely shut down for a week or two in the summer for vacation or temporarily close to upgrade, retool equipment or make yearly product changes such as making model changes in automotive designs. Such temporary work stoppages result in laying off employees who have not been employed long enough to qualify for vacation pay. However, we are still 1,100 jobs ahead of where we were last July in this sector,” Cracraft said.

The professional and business services sector reported 700 fewer jobs in July 2005 than in June 2005. This sector recorded 5,200 more employees in July 2005 than July 2004. This is the first month since January that this sector has shown a loss in jobs.

The state’s leisure and hospitality sector dropped by 600 jobs in July 2005. Since July 2004, the sector’s employment has gone up by 5,400 employees. The sector includes arts, entertainment, recreation, accommodations and food services and drinking places industries. “Prior to this July loss, this sector had added employment in six of the past seven months,” 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, decreased by 300 jobs from June 2005 to July 2005. Over the past 12 months, the sector has added 1,300 positions.

The state’s construction sector lost 200 jobs in July 2005. Since July 2004, employment in this sector has risen by 3,600.

Kentucky’s information sector employment went down by 100 jobs from June 2005 to July 2005. This sector, which includes firms involved in publishing, Internet activities and broadcasting and news syndication, had 700 fewer jobs since July 2004.

The U.S. Bureau of Labor Statistic’s monthly estimate of the number of employed Kentuckians for July 2005 was 1,877,372 on a seasonally adjusted basis. This figure is up 2,543 from the 1,874,829 employed in June 2005, and up 6,743 from the 1,870,629 employed in July 2004.

 The monthly estimate of the number of unemployed Kentuckians for July 2005 was 118,196. This figure is up 3,904 from the 114,292 unemployed in June 2005, and up 13,564 from the 104,632 Kentuckians unemployed in July 2004.

The monthly estimate of the number of Kentuckians in the civilian labor force for July 2005 was 1,995,568. This figure is up 6,447 from the 1,989,121 recorded in June 2005, and up 20,307 from the 1,975,261 recorded for July 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.