Kentucky's unemployment rate fell below 9 percent for the first time in three years in January, as it dropped to 8.8 percent. The rate was down from 9 percent in December.
However, the state's measure continued to lag the national rate, which was down to 8.3 percent from 8.5 percent in December.
And while the unemployment rate dropped, research showed that the state's civilian labor force also dropped by nearly 2,700 workers, said economist Manoj Shanker of the state Office of Employment and Training. Shanker said that's indicative of the long-term unemployed falling out of the labor force as they seek training to become employed in other fields.
The state's unemployment rate is calculated through a survey of households and includes agricultural workers and the self-employed.
A different survey that looks at non-farm jobs across 11 major economic sectors showed a gain of 7,600 jobs in January from December.
It was the fourth straight month that the state has seen a net increase in jobs across the 11 sectors. In January, seven of the sectors increased employment, three reduced jobs and one stayed the same.
The highest growth — 3,700 positions — came in the professional and business services sector, which includes temporary employment agencies.
"The prolonged recession has made primary employers wary about the signs of recovery," Shanker said in a statement. "Instead of expanding their core work force, these employers first contract with employment service companies.
"Employment for business and technical consultants, as well as temporary help agencies have surged because of this wait-and-see attitude."
Coming in behind that was the construction industry, which saw employment surge by 1,800 jobs because of the mild winter.
Other sectors adding employees included manufacturing (1,100); trade, transportation and utilities (900); other services, which includes religious organizations and repair businesses (500); leisure and hospitality (400), and information (200).
Leading the losses in the state was the financial activities sector, which saw employment decrease by 500 jobs.
Employment in the educational and health services sector fell by 400 positions. That's the second straight month that the sector has seen job losses, "which raises eyebrows and it should," Shanker said.
He said his preliminary investigation shows health care companies are outsourcing administrative functions to save money and that's causing the job losses.
Also shedding jobs in January was the government sector, which fell by 100 positions.
The mining and logging sector saw employment stay steady.