Ky. jobless rate falls to 8.7%

ssloan@herald-leader.comMarch 22, 2012 

Kentucky's unemployment rate remained below 9 percent in February, dropping to 8.7 percent. That's down a tad from 8.8 percent in January, which marked the first time in three years that the jobless rate had been below 9 percent.

February was the eighth consecutive month that the rate has declined, according to the state Office of Employment and Training. However, the state's measure continued to lag the national rate, which remained at 8.3 percent.

"The employment situation has improved steadily since last summer," state economist Manoj Shanker said in a statement. "However, it is important to realize that there will be some blips on the way as businesses adapt to the new post-recession economy."

Seven of the state's 11 major economic sectors reported employment increases in February with the state adding 8,000 non-farm jobs during the month.

It was the fifth straight month that the state has seen a net increase in jobs across the 11 sectors.

The highest growth — 3,300 positions — came in the professional and business services sector, which includes temporary employment agencies.

"Businesses are hedging their bets by filling positions as diverse as assembly line workers and health services positions through temporary employment services," Shanker wrote. "This practice boosts overall employment, but will keep wages low."

Coming in behind that was the leisure and hospitality sector, which added 3,000 jobs with hotels and food services driving the majority of the hiring.

The government sector added 1,400 jobs and trailing it was the construction sector, which had 1,200 more workers. But Shanker cautioned that construction hiring, which has been aided by the mild winter, might be muted as spring goes on.

"Kentucky now has had three months of above-average growth in construction employment, but until overall economic recovery becomes more widespread, the boom in construction may soften by late spring," he said.

Other sectors adding employees included educational and health services (600); other services, which includes religious organizations and repair businesses (400); and financial activities (100).

Leading the job losses in the state with a drop of 1,000 employed was the manufacturing sector, but Shanker said that statistic is slightly misleading as manufacturing companies are hiring temporary workers. That means those jobs are credited to the professional and business services sector rather than manufacturing.

"This indicates that manufacturing output is not declining in Kentucky, but some of those jobs are now being performed by temporary workers," he said.

Other sectors posting declines in employment were trade, transportation and utilities, which shed 600 jobs, and information, which fell by 400 positions.

The mining and logging sector saw employment remain steady.

Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz

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