On Tuesday, The Kentucky Chamber of Commerce released the first of a new series of quarterly reports, “Kentucky’s Economic Recovery: A Quarterly Update of Workforce, Employment, State GDP, and Exports‘,” to track Kentucky’s economic recovery in partnership with the University of Kentucky Center for Business and Economic Research.
In addition to causing a global health crisis, the COVID-19 pandemic has also shaken the economy to its core. Very quickly, Kentucky set a record for the number of unemployment claims with more than 591,000 claims filed in six weeks, small businesses were closing, and our workforce participation rate plummeted to the lowest in the nation.
The Kentucky Chamber and the University of Kentucky Center for Business and Economic Research will be publishing a report every three months taking a deep dive into the Commonwealth’s economy as we work to rebuild, recover and get our citizens back to work. The goal of these regular, quarterly reports will be to inform the public and provide a tool for lawmakers as they shape policy essential to the state’s economic recovery.
Highlights of this first release of “Kentucky’s Economic Recovery: A Quarterly Update of Workforce, Employment, State GDP, and Exports” include:
- Kentucky’s GDP bounced back during the 3rd quarter of 2020 but was still below pre-pandemic levels.
- While employment was still down 5.2% in December compared to a year ago, Kentucky has recovered 65% of jobs lost during initial months of the pandemic.
- As of December 2020, Kentucky’s unemployment rate stood at 6%, down from 16.6% in April 2020.
- Kentucky’s labor participation rate, which was 59.6% just before the pandemic dropped to 57.5% in December 2020.
- The pandemic took a toll on surrounding states’ economies as well, and December’s unemployment figures put Kentucky’s rate essentially equal to the rate for surrounding states in total.
“Our economy will look different post-recovery, as business sectors have shifted and consumer habits have evolved. In a time of such transition, we must make sure Kentucky is a place that attracts growth, talent, and the job creators that will lead us into the future. But in order to achieve this, we must have a strong, educated and skilled workforce and a competitive economy,” said Kentucky Chamber President and CEO Ashli Watts. “With federal and state aid helping keep the economy afloat, the extent of damage occurred over the last 11 months is still yet to be seen, but we must prioritize our economic recovery. We are hopeful these quarterly reports will keep our eye on the ball as we work toward a post-pandemic economy.”
Kentucky has now recovered 65 percent of the jobs lost at the beginning of the pandemic. While the state’s economy is improving, there is still a high degree of uncertainty associated with the pace of recovery,” said Associate Professor of Economics and Director of the Center for Business and Economic Research at the University of Kentucky Gatton College of Business and Economics Michael W. Clark, Ph.D. “Kentucky’s economy is still operating below pre-pandemic levels. The rate of continued recovery will depend on the vaccine roll-out and strengthening consumer confidence.”