Kentucky’s annual unemployment rate for 2020 was 6.6 percent, up from 4.1 percent in 2019, according to the Kentucky Center for Statistics (KYSTATS), an agency of the Kentucky Education and Workforce Development Cabinet.
The U.S. annual unemployment rate jumped to 8.1 percent in 2020 from 3.7 percent in 2019.
The U.S. Bureau of Labor Statistics’ estimate of the number of employed Kentuckians for 2020 was 1,885,645. This figure was down 99,017 from the 1,984,662 employed in 2019.
The number of unemployed Kentuckians for 2020 was 134,242, up 48,572 from the 85,670 unemployed in 2019. There were 78,479 fewer individuals unemployed in 2020 than 10 years ago.
In 2020, the estimated number of Kentuckians in the civilian labor force was 2,019,887. This was down 50,445 from the 2,070,332 recorded in 2019, and down 45,136 from 10 years ago when the civilian labor force was 2,065,023.
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.
All 50 states experienced a statistically significant increase in their annual unemployment rates from 2019 to 2020. Kentucky’s unemployment rate for 2020 was higher than 20 states and lower than 29 states. Nevada had the highest unemployment rate in 2020 at 12.8 percent, while Nebraska had the lowest rate at 4.2 percent. Among its surrounding states, Kentucky’s unemployment rate was lower than Illinois, Indiana, Ohio, Tennessee and West Virginia, and higher than Missouri and Virginia.
In a separate federal survey of business establishments that excludes jobs in agriculture and people who are self-employed, Kentucky’s nonfarm payroll in 2020 decreased by 110,018, or 5.7 percent, to 1,835,367 jobs.
“The annual labor force estimates provide additional data on how the pandemic affected Kentucky’s economy,” said University of Kentucky’s Center for Business and Economic Research (CBER) Director Mike Clark, Ph.D. “However, the annual numbers mask the magnitude of the economic contraction and the speed of the recovery. For example, while Kentucky’s annual unemployment rate only increased by 2.5 percentage points in 2020, the state’s monthly unemployment rate jumped from 4.2 percent in March to 16.9 percent in April. Kentucky’s unemployment rate then declined quickly, ending the year at 5.6 percent in December.”
Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to this survey, all of Kentucky’s 11 major nonfarm job sectors listed in the North American Industry Classification System (NAICS) showed employment losses in 2020.
“Employment losses were widespread with all major industrial sectors reporting lower employment levels at some point during the year,” said Clark. “Ten years ago, the Great Recession had just ended and the economy began its longest expansion is U.S. history.”
Employment in Kentucky’s leisure and hospitality sector contracted by 36,285 positions or 18 percent in 2020, and 1,870 jobs in the past 10 years. Most of these jobs losses were concentrated in the accommodation and food services, which fell by 31,312 positions or 17.6 percent in 2020. The arts, entertainment and recreation subsector fell by 4,973 jobs or 20.7 percent from 2019 to 2020.
“Kentucky’s leisure and hospitality suffered the largest employment losses among the state’s major sectors as restaurants, hotels, and other businesses trimmed payrolls due to reduced capacity and demand,” said Clark.
Employment in the mining and logging sector fell by 25.9 percent with the loss of 2,646 jobs in 2020. Over a 10-year period the sector decreased by 14,513 jobs or 65.8 percent. Other industries included in the sector are forestry; oil and gas extraction; and support activities for mining.
Kentucky’s construction sector lost 2,672 jobs in 2020 or 3.3 percent. The sector has expanded by 9,959 jobs or 14.7 percent since 2010.
“While average annual employment for construction was down from 2019 to 2020, Kentucky’s construction sector recovered its employment losses fairly quickly,” said Clark. “Construction employment was up 3 percent from December 2019 to December 2020. This appears to be driven by increased demand for home remodeling and new housing.”
Kentucky’s manufacturing sector shed 16,535 jobs or 6.6 percent in 2020 for a total of 235,712 positions. Over the past 10 years, manufacturing employment was up 26,563 jobs, a gain of 12.7 percent. Durable manufacturing lost 13,565 jobs or 8.3 percent from 2019 to 2020 and non-durable manufacturing lost 2,970 jobs or 3.4 percent.
Kentucky’s trade, transportation and utilities sector lost 9,938 jobs or 2.5 percent in 2020. During the past 10 years, the number of jobs increased by 34,246 jobs or 9.5 percent. This is Kentucky’s largest sector based on employment with a total of 394,908 jobs or 21.5 percent of Kentucky’s nonfarm employment. Within the sector, wholesale trade lost 3,416 jobs from 2019 to 2020, retail trade lost 8,770 positions, and transportation, warehousing and utilities gained 2,249 jobs.
The information sector, which includes establishments involved in publishing, Internet activities, data processing, broadcasting and news syndication, decreased by 1,449 jobs or 6.7 percent in 2020 from a year ago. It lost 4,369 jobs or 17.7 percent compared to 10 years ago.
The financial activities sector declined by 994 jobs or 1.1 percent from a year ago. Over the past 10 years, this sector has added 6,965 jobs or 8.1 percent. Within this sector, the finance and insurance subsector lost 83 positions in 2020, while real estate, rental and leasing lost 911 jobs in 2020.
Firms in the state’s professional and business services sector lost 9,414 jobs in 2020, a decrease of 4.4 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 grown by 24,648 jobs or 13.5 percent. This category also includes temporary help agencies that provide workers to other businesses on a contractual basis. Within the sector, professional, scientific, and technical services decreased by 567 jobs; management of companies declined by 382 positions; and administrative and support and waste management lost 8,466 jobs.
The educational and health services sector fell by 11,579 jobs in 2020, but gained 20,057 jobs, or 7.9 percent, over the past 10 years. Employment in the healthcare and social assistance subsector fell by 8,359 jobs in 2020, but added 24,099 positions over the past 10 years. Educational services in this sector include employees at private elementary, secondary and postsecondary schools along with other establishments that provide instruction and training. Education services declined by 3,220 jobs from 2019 to 2020, or 10.7 percent, and decreased by 4,042 jobs over the past 10 years.
Other services, a sector that includes repair and maintenance; personal and laundry services; and religious, civic, and professional organizations, decreased by 5,218 jobs or 7.8 percent in 2020. The sector has lost 7,300 jobs or 10.6 percent in the last 10 years.
The government sector, which includes federal, state and local employment in public education, public administration agencies and state-owned hospitals, dropped by 13,289 jobs or 4.3 percent in 2020. Employment in this sector was down 18,987 jobs over the last 10 years or 6 percent. During the past year, employment was up 412 jobs in federal government, down 2,558 positions in state government, and down 11,141 jobs in local government.
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.