Kentucky sets new state record for low unemployment

Kentucky may have set a new state record for low unemployment last month, according to a new report from the state’s Education and Labor Cabinet. 

The report recorded a preliminary unemployment rate of 3.7 percent for April 2023. This is 0.1 percentage points lower than March 2023. In February 2022, Kentucky set a state record for falling below 4.0 percent and has since seen several months with rates of 3.9 or 3.8 percent.   

The unemployment rate is a measure of adults who do not have a job but are actively seeking one. Information on unemployment and employment is gathered through surveys of households conducted by the U.S. Department of Labor and U.S. Census Bureau. Unemployment data for the states extends back to 1976. The April 2023 estimate for Kentucky is preliminary and subject to revisions. 

“April’s low unemployment rate reflects widespread job availability and the continuation of a tight labor market for employers,” said Dr. Charles Aull, Executive Director of the Kentucky Chamber Center for Policy and Research. “This is a positive trend to see in the context of rising interest rates and is indicative of the impact that pro-growth public policies like tax reform are having on the state. However, it also underscores the need to pull more workers into Kentucky’s labor market. When employers are unable to fill open positions, this can negatively impact consumers and harm economic development in the long-run.”

The U.S. unemployment rate for April 2023 was 3.4 percent. In March 2023, Kentucky’s unemployment rate of 3.8 percent was the 12th highest in the nation. South Dakota had the lowest rate at just 1.9 percent, while Nevada’s was 5.5 percent.

According to the new report, Kentucky’s total workforce grew by more than 4,000 workers as unemployed individuals found jobs and new individuals joined the workforce and quickly found employment. A report released last year from the Kentucky Chamber Center for Policy and Research stressed the importance of continuing to grow the overall size of Kentucky’s workforce. Kentucky’s workforce in April 2023 was estimated at 2,046,426. Continued growth will be necessary to fill both current and forthcoming job openings.  

Additional recent data also helps illustrate today’s tight labor market. One metric looks at the percentage of individuals receiving unemployment benefits. The “insured” or “covered unemployment rate” in Kentucky was 0.38 percent at the end of April. This metric has only been below 0.4 percent six times, and five of those occurrences have taken place in the past 12 months. Prior to COVID-19, the state typically saw rates closer to 0.8 or 1.00 percent. 

Another metric is job openings. A report released by the Bureau of Labor Statistics earlier this month showed 144,000 jobs openings in Kentucky in March 2023. While this is down significantly from the 213,000 open jobs in March 2022, job openings continue to dramatically outpace unemployed workers looking for a job. 

To learn more about how the Kentucky Chamber is working to solve employers’ workforce challenges through advocacy and research, click here.