Kentucky employers added to payrolls but workforce challenges remain, new economic data says

Help wanted sign in front of store front

Last month, Kentucky employers continued adding jobs to payrolls, but labor market challenges persist. These challenges may be slowing the pace of Kentucky’s economic recovery.  

The Bureau of Labor Statistics (BLS) has released its monthly state employment and unemployment data. These data are based on surveys of households and businesses. The release of this information follows BLS’s release of the national employment situation summary earlier in July. 

In June, Kentucky employers added just over 3,000 jobs to payrolls. Between February 2020 and April 2020, the Commonwealth lost close to 300,000 jobs. To date, Kentucky employers have readded roughly 70 percent of the jobs lost during the pandemic. This is in line with the trend of the national economic recovery. It is important to note that a job added to payroll could be held by an individual with two or more jobs or by an out-of-state worker. 

Data on the labor market tells a more complex story. While Kentucky employers overall added jobs to payroll, the number of employed Kentuckians decreased in June by close to 6,000 individuals. As of June, 1,893,139 Kentuckians were classified as employed under BLS definitions. The number of unemployed Kentucians also declined. BLS defines unemployment as not having a job but actively looking for one. It does not mean an individual is receiving unemployment benefits. Kentucky’s unemployment rate dropped from 4.5 percent to 4.4 percent in June. Because overall employment did not increase in June, the drop in unemployment indicates that more Kentuckians may have stopped participating in the workforce. 

“The June data tells us that our economic recovery still has a ways to go and that we need to focus on getting more Kentuckians back into the workforce,” said Kentucky Chamber Senior Policy Analyst Charles Aull. “The challenge to find staff and fill open positions continues to be the top business issue we are hearing about from employers. What we are seeing in the economic data shows the reality of this problem.”  

As a result of declining labor market numbers, Kentucky’s workforce participation rate dropped from 56.6 percent to 56.3 percent. The workforce participation rate is the percent of Kentucky adults who have jobs or are actively looking for a job. Kentucky has the third lowest workforce participation rate in the nation. The national workforce participation rate is 5.3 points higher than Kentucky’s. The Commonwealth’s workforce participation rate is only 0.3 points higher than it was at the lowest point of the pandemic in June 2020. 

Read the Chamber’s summary of the national employment situation here.

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Jacqueline Pitts
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