Kentucky unemployment rate rises 1.6 percent in March; jobless rate 5.8 percent in wake of COVID-19

19 April 2020 (Northern KY Tribune)

Kentucky’s seasonally adjusted preliminary March 2020 unemployment rate was 5.8 percent, according to the Kentucky Center for Statistics (KYSTATS), an agency within the Education and Workforce Development Cabinet (EWDC).

The preliminary March 2020 jobless rate was up 1.6 percentage points from February 2020 and up 1.6 percentage points from the 4.2 percent recorded for the state in March 2019. The U.S. seasonally adjusted jobless rate for March 2020 was 4.4 percent, up from 3.5 percent in February 2020, according to the U.S. Department of Labor.

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

Kentucky civilian labor force was 2,051,009 in March 2020, a decrease of 33,080 individuals from February 2020. The number of people employed in March fell by 62,878, while the number unemployed increased by 29,798.

“Closures caused by the coronavirus contributed to nearly 63,000 fewer people working in March than in February,” said University of Kentucky’s Center for Business and Economic Research (CBER) Interim Director Mike Clark, Ph.D. “The data suggests that approximately half of these individuals appeared to still be looking for work, while half left the labor force.

“However, there may have been some confusion among respondents who temporarily lost jobs but are likely to be recalled by their employers. While these workers should be classified as unemployed, they were classified as having left the labor force in the March estimates.”

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 7,100 jobs in March 2020 compared to February 2020. Kentucky’s employment was up 1,200 jobs relative to March 2019, for a growth rate of 0.1 percent.

“Employment reported in the business survey also declined, but the decrease was not as large as in the household survey,” said Clark. “The employment numbers reflect the pay period that includes the 12th of the month. Since many of the closures occurred later in March, these numbers likely reflect only a portion of the virus’s effect on the economy.”

Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to the survey, four of Kentucky’s 11 major nonfarm North American Industry Classification System (NAICS) job sectors had employment increases from the previous month while six declined and one was unchanged.

Kentucky’s leisure and hospitality sector shed 6,600 positions in March. This sector was down 1,100 positions since March 2019. The accommodations and food services subsector lost 5,700 jobs from February to March. Employment in the arts, entertainment and recreation subsector decreased by 900 jobs.

“Leisure and hospitality businesses were the first and hardest hit as numerous events were cancelled and restaurants were closed to prevent the spread of the coronavirus,” said Clark.

Kentucky’s trade, transportation and utilities sector lost 1,800 jobs in March 2020. Wholesale trade declined by 500 jobs; retail trade decreased 400 jobs; and transportation, warehousing, and utilities decreased by 900 jobs. Since March 2019, employment in this sector has decreased by 6,400 positions or 1.6 percent.

Total employment in the government sector fell by 500 jobs from February 2020 to March 2020. Federal government employment decreased by 100 jobs; state government employment was unchanged; and local government employment decreased by 400 jobs. Total government employment has declined by 300 jobs since March 2019.

Kentucky’s mining and logging sector fell by 300 jobs from February 2020 to March 2020, and was down 2,300 jobs, or 21.3 percent, from a year ago.

Employment in Kentucky’s educational and health services sector decreased by 100 jobs in March 2020. The educational services subsector was down 300 jobs in March 2020. However, the health care and social assistance subsector added 200 positions from February to March. Since last March, the sector has grown by 5,500 positions or 2.0 percent.

Employment in the information services sector fell by 100 jobs in March 2020. This sector was down 1,400 positions from a year ago. The industries in this sector include traditional publishing as well as software publishing; motion pictures and broadcasting; and telecommunications.

Employment in Kentucky’s construction sector was unchanged in March 2020. The construction sector was up 400 jobs or 0.5 percent from one year ago.

Kentucky’s manufacturing employers added 100 positions from February 2020 to March 2020. Employment in durable goods manufacturing declined by 800 jobs, while non-durable manufacturers added 900 jobs in March. Kentucky’s manufacturing employment decreased by 900 jobs since March 2019.

The financial activities sector gained 500 jobs in March 2020. The finance and insurance subsector was up 900 jobs while the real estate, rental and leasing subsector was down 400 jobs from February to March. The sector was down 400 jobs compared to last March.

The professional and business services sector added 800 jobs or 0.4 percent in March 2020. The administration and support and waste management subsector added 300 positions from February to March. The professional, scientific and technical services subsector was up 700 jobs in March and the management of companies subsector was down 200 jobs. This sector was up 5,500 jobs since March 2019.

Employment increased by 900 jobs in the other services sector from February 2020 to March 2020. This sector was up by 2,600 positions since March 2019. The other services sector includes repairs and maintenance, personal care services and religious organizations.

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, due to the small sample size, county unemployment rates are not seasonally adjusted.

Labor force statistics, including the unemployment rate, are based upon estimates from the Current Population Survey of households. Non farm employment data is provided by BLS’ Current Employment Statistics survey program. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry.

Note that the March survey reference periods for both surveys pre-dated many coronavirus-related business and school closures that occurred in the second half of the month.

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Additional information is also available on the Education & Workforce Development Cabinet website.