Kentucky’s seasonally adjusted preliminary unemployment rate for December 2015 rose to 5.3 percent from a revised 5 percent in November 2015, according to the Office of Employment and Training (OET), an agency of the Kentucky Education and Workforce Development Cabinet.
The preliminary December 2015 jobless rate was 0.2 percentage points below the 5.5 percent rate recorded for the state in December 2014.
The U.S. seasonally adjusted jobless rate for December remained unchanged from the previous month at 5 percent, according to the U.S. Department of Labor.
Labor force statistics, including the unemployment rate, are based on estimates from the Current Population Survey of households. It is designed to measure trends rather than to count the actual number of people working. It includes jobs in agriculture and those classified as self-employed.
In December 2015, Kentucky’s civilian labor force was 1,950,431, an increase of 15,096 individuals compared to the previous month. Employment was up by 6,653, and the number of unemployed increased by 8,443.
“Typically, as the economy improves and wages trend upwards, more people enter the labor force,” said economist Manoj Shanker of the OET. “It takes time for skill levels of the new entrants to match available jobs, resulting in an inching up of the unemployment rate.”
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 increased by 5,100 jobs in December 2015 from the month before, and by 40,200 positions since December 2014.
“This year we have had steady job growth. On average Kentucky has added 3,350 jobs every month during the last 12 months,” said Shanker.
Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to this survey, seven of Kentucky’s 11 major nonfarm North American Industry Classification System (NAICS) job sectors registered gains in employment, while three declined and one remained the same.
Private sector jobs were up by 4,700 over the month to 1,594,300. Goods producing industries gained 1,500 jobs, while service-providing industries added 3,200 jobs.
Kentucky’s professional and business services jumped by 4,600 positions in December 2015 from a month ago for a growth of more than 2 percent. There was an increase of 4,300 jobs over the year. This category includes establishments engaged in services that support the day-to-day activities of other organizations, including temporary employment services and payroll processing. December gains were centered on support services positions.
“Temporary staffing positions play a critical role in the job market when there is turbulence in the economy,” said Shanker. “The continuing drop in oil prices and a weakening of the economies of our major trading partners makes businesses less likely to hire permanent employees, causing the demand for temps to spike.”
Employment in the educational and health services sector posted a gain of 1,500 positions in December 2015, and an overall increase of 9,700 jobs from a year ago. Health care jobs account for nearly 90 percent of employment in this sector and had a month-to-month increase of 1,500 jobs, and expanded by 9,200 positions over the year.
The construction sector rose by 1,000 jobs in December 2015 from a month ago. Since December 2014, construction jobs have grown by a robust 4,600, or 6.2 percent.
“Last year proved to be a banner period for construction. Even the severe winter storms of February and March didn’t dampen the overall demand for construction workers,” said Shanker. “Low energy costs put more money in people’s pockets for home remodeling; and relatively low interest rates spurred housing starts.”
Kentucky’s manufacturing sector added 800 jobs in December 2015 compared to the previous month. Since December 2014, employment in manufacturing has increased by 7,800.
The information sector grew by 500 jobs in December 2015 from a month ago, and expanded by 700 positions from a year ago. The industries in this sector include traditional publishing as well as software publishing; motion pictures and broadcasting; and telecommunications.
The government sector, which includes public education, public administration agencies and state-owned hospitals, gained 400 jobs in December 2015. The sector posted an increase of 1,300 jobs compared to December a year ago.
Employment in the other services sector, which includes repairs and maintenance, personal care services, and religious organizations, increased by 300 positions in December 2015 from a month ago. This sector increased by 700 jobs from a year ago.
The financial activities sector employment remained the same from November 2015 to December 2015. The sector has expanded by more than 5 percent during the last 12-months with the addition of 4,900 jobs.
Employment in the mining and logging sector decreased by 300 positions in December 2015 from a month ago. There was a decline of 1,700 jobs, or 10.6 percent, from a year ago.
The trade, transportation, and utilities sector declined by 400 jobs in December 2015 from a month ago. There has been an increase of 3,800 jobs from a year ago. This is the largest sector in Kentucky accounting for one-fifth of all nonfarm jobs. More than half of these jobs are in the retail trade sector which had a net gain in employment for the year. The rest of the jobs are in wholesale and warehousing. The warehousing sector declined by 800 jobs in December 2015 but expanded by 1,300 positions over the year.
Kentucky’s leisure and hospitality sector dropped by 3,300 jobs in December 2015 from a month ago. Since December last year, however, the growth was quite substantial with the addition of 4,100 jobs for an increase of 2.2 percent. This sector includes arts, entertainment, recreation, accommodation, and food services.
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, because of the small sample size, county unemployment rates are not seasonally adjusted.