Ky. jobless rate falls below 8 percent for the first time since 2008

ssloan@herald-leader.comMarch 7, 2013 

Kentucky's unemployment rate dropped in January to 7.9 percent, a four-year low, but the survey behind it showed that the state lost jobs during the month.

The jobless rate fell from 8 percent in December, the first time it has fallen below 8 percent since November 2008, according to the state Office of Employment and Training.

The state's performance matched the national unemployment rate, which Kentucky typically lags. The U.S. rate increased to 7.9 percent in January from 7.8 percent in December.

Kentucky's unemployment rate dropped because of a decline in the civilian labor force, which includes those who are employed and the unemployed who have recently looked for jobs. That decline came both because slightly fewer people were employed and because fewer people were looking for work.

The declines were not statistically significant, though, said Manoj Shanker, economist with the Kentucky Office of Employment and Training.

A second survey that measures employment by industry also showed a decline in jobs in the state in January. That survey, which excludes agricultural work and self-employment, showed that the state shed 400 jobs in January.

Shanker encouraged taking a longer-term view of both surveys and said that nine of the 11 economic sectors in the state have seen job growth from January 2012 to January 2013.

The two sectors that have seen declines in the past year are the mining and logging sector and the construction industry. Shanker attributed the declines in mining to increased competition from the natural gas industry and to low-cost coal mined in the western United States. Construction, meanwhile, has suffered in recent years because of the housing downturn.

Other economic sectors have seen slow and steady growth, Shanker said.

"The good thing about a slow decline in the unemployment rate and slow gains in employment is businesses are making long-term decisions," he said. "Slow growth is good. These are all very positive things."

For January, only four of the state's economic sectors saw job growth. Five declined and two stayed the same.

Leading the growth was the government sector, which added 3,100 jobs. Shanker said almost all of the gains came in education.

"After undergoing years of budget cuts, some of the jobs in schools and colleges are coming back," he said in his report.

Other sectors that added positions were manufacturing, with 1,500 new jobs; construction, 600; and information, 400.

The largest job losses in January came in the trade, transportation and utilities sector, which declined by 3,700 jobs.

Shanker attributed the losses to the warehousing subsector. "The hiring environment appears to have weakened as the warehouse delivery industry reassesses its employment needs, especially with increased automation," he said.

The leisure and hospitality sector declined by 1,000 jobs, and almost all of the losses were in arts and entertainment, which is 10 percent of employment in the category.

"Employment in theater, dance and museums is driven by discretionary spending," Shanker said. "Though the overall employment situation is improving, wages are stagnant.

"When faced with tough choices, people tend to forgo a theater performance and use the money to pay down their debt and pay for school."

Employment in the professional and business services sector dropped by 700 jobs, while the other services sector, which includes repair companies and religious organizations, shed 500 workers.

The financial activities sector saw employment decline by 100 positions.

Employment was flat in the educational and health services sector and the mining and logging sector.

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

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