Kentucky’s 2018 annual unemployment rate falls to 4.3%

FRANKFORT, Ky. (March 4, 2019 - The Lane Report) — Kentucky’s annual unemployment rate dropped to 4.3 percent in 2018 from 4.9 percent in 2017, while nonfarm employment gained 10,500 jobs, according to the Kentucky Center for Statistics (KYSTATS), an agency of the Kentucky Education and Workforce Development Cabinet.

It was the lowest annual jobless rate for the state since 2000 when the rate was 4.2 percent.

The U.S. annual unemployment rate dropped to 3.9 percent in 2018 from 4.4 percent in 2017.

The U.S. Bureau of Labor Statistics’ estimate of the number of employed Kentuckians for 2018 was 1,972,312. This figure is up 19,280 from the 1,953,032 employed in 2017.

The number of unemployed Kentuckians for 2018 was 89,310, down 11,415 from the 100,725 unemployed in 2017. There were 40,745 fewer individuals unemployed in 2018 than 10 years ago, when the economy was in recession.

In 2018, the estimated number of Kentuckians in the civilian labor force was 2,061,622. This is up 7,865 from the 2,053,757 recorded in 2017, and up 30,884 from 10 years ago when the civilian labor force was 2,030,738.

“Last year marks the ninth consecutive year of employment gains in Kentucky,” said University of Kentucky’s Center for Business and Economic Research (CBER) Associate Director Mike Clark, Ph.D. “While the rate of growth has slowed, these employment gains helped lower the state’s annual unemployment to 4.3 percent—its lowest level since 2000.”

Labor force statistics, including the unemployment rate, are based on estimates from the Current Population Survey of households. The survey is designed to measure trends in the number of people working. It includes jobs in agriculture and individuals who are self-employed.

Annual unemployment rates declined in 44 states from 2017 to 2018. The unemployment rates increased in three states: Colorado, Oregon and West Virginia, and was unchanged in Arkansas, Hawaii and Maine.

Kentucky’s unemployment rate for 2018 was higher than 38 states and lower than nine states. Kentucky’s rate was tied with Illinois and Pennsylvania. Alaska had the highest unemployment rate in 2018 at 6.6 percent, while Hawaii had the lowest rate at 2.4 percent. Among its surrounding states, Kentucky’s unemployment rate was lower than Ohio and West Virginia, higher than Indiana, Missouri, Virginia and Tennessee, and the same as Illinois.

In a separate federal survey of business establishments that excludes jobs in agriculture and people who are self-employed, Kentucky’s nonfarm payroll in 2018 increased by 10,500 or 0.5 percent to 1,931,600 employees.

Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to this survey, six of Kentucky’s 11 major nonfarm job sectors listed in the North American Industry Classification System (NAICS) showed employment growth in 2018, while five reported losses.

According to the annual employment data, the educational and health services sector rose by 5,500 jobs in 2018, and 31,200 or 12.6 percent over the past 10 years. This growth is driven by hiring in the healthcare and social assistance subsector, which added 4,800 jobs in 2018. Within this sector, health care and social assistance industries, such as hospitals, nursing and residential care facilities and social assistance businesses expanded by 33,000 jobs for a 15.3 percent gain in the past 10 years.

“Kentucky’s health and social services subsector has consistently grown over the years,” said Clark. “A large portion of these gains occurred among employers providing ambulatory care and social services.”

Educational services in this sector include employees at private elementary, secondary and postsecondary schools along with other establishments that provide instruction and training. Employment in educational services gained 800 jobs, an increase of 2.8 percent. This subsector has declined by 1,700 jobs over the last 10 years.

Kentucky’s trade, transportation and utilities sector jumped by 4,400 jobs or 1.1 percent in 2018. During the past 10 years, the number of jobs increased by 23,200 jobs or 6.1 percent. This is Kentucky’s largest sector based on employment with a total of 403,800 jobs or 21 percent of Kentucky’s nonfarm employment. Within the sector, wholesale trade gained 1,000 jobs from 2017 to 2018, retail trade lost 800 positions, and businesses in transportation, warehousing and utilities added 4,300 jobs.

“Trade, transportation, and utilities has been a major economic driver in Kentucky for at least the past five year,” said Clark. “Most of this growth has occurred in transportation and warehousing.”

Kentucky’s manufacturing sector expanded by 1,600 jobs or 0.6 percent in 2018 for a total of 252,100 positions. Over the past 10 years, manufacturing employment is up 6,900 jobs, a gain of 2.8 percent. Durable manufacturing added approximately 1,300 jobs or 0.8 percent from 2017 to 2018 and non-durable manufacturing added 500 jobs or 0.6 percent.

“Kentucky’s manufacturers have been able to make up much of the employment losses that occurred during the recession,” said Clark. “However, employment growth during the past two years appears to have slowed.”

Employment in the state’s professional and business services added 1,300 jobs in 2018, an increase of 0.6 percent. This sector includes professional, scientific and technical services, management of companies, and administrative and support management. In the last 10 years, the sector has expanded by 32,600 jobs or 17.6 percent. This category also includes temporary help agencies that provide workers to other businesses on a contractual basis.

“Professional business services accounted for a large share of Kentucky’s employment growth during the past 10 years,” said Clark. “However, growth in this sector has mostly stopped with declines during two of the past three years.”

Kentucky’s construction sector added 700 jobs in 2018, for a growth of 0.9 percent. The sector has declined by 6,300 jobs or 7.5 percent since 2008.

The leisure and hospitality sector grew by 600 positions in 2018, and 25,700 jobs or 15 percent in the past 10 years. Within the sector are arts, entertainment and recreation, and accommodation and food services.

The government sector, which includes federal, state and local employment in public education, public administration agencies and state-owned hospitals, dropped by 2,100 jobs or 0.7 percent 2018. In the last 10 years, the sector has gained 4,000 positions or 1.3 percent.

The financial activities sector lost 900 jobs from a year ago. Over the past 10 years, this sector has added 1,100 jobs or 1.2 percent.

The information sector, which includes establishments involved in publishing, Internet activities, data processing, broadcasting and news syndication, decreased by 500 jobs in 2018 from a year ago. It has lost 6,100 jobs or 21.7 percent compared to 10 years ago.

Employment in the mining and logging sector fell by 2 percent with the loss of 200 jobs in 2018. Over a 10-year period, the sector has declined by 13,900 jobs or 58.2 percent. Other industries included in the sector are forestry; oil and gas extraction; and support activities for mining.

Other services, a sector that includes repair and maintenance; personal and laundry services; and religious, civic, and professional organizations, decreased by 100 jobs in 2018. The sector has lost 8,700 jobs or 11.7 percent in the last 10 years.

Unemployment statistics are based on estimates and are compiled to measure trends rather than actually to count the number of 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.

Learn more about Kentucky labor market information at