Jobs report shows economic uncertainty. ‘No reason to think KY will be immune’

As the national jobs report for August included concerning figures about the economy, Lexington’s mayor said Central Kentucky’s mixed jobs market is resilient.

Hiring slowed across the country last month, according to the Bureau of Labor Statistics, and employers only added 22,000 jobs to the economy. The unemployment rate increased to 4.3%, the highest it’s been since October 2021, the bureau said in its monthly report.

More than a quarter of unemployed people have been looking for work since February.

The jobs report exists as a snapshot of the economy created in the previous month across the country and includes figures tracking how many people were without a job and how much those with jobs were paid for their work, among other things. Local and state reports lag behind national data releases by about a month.

Lexington Mayor Linda Gorton said the city’s economy is affected by the national economy, which she said appears to be slowing.

“However, Lexington benefits from not being an industrial-based city, in that we don’t historically see the worst effects of a downturn,” she said. “Our mixed economic base gives us a little more resiliency.”

Because the city and the county are not reliant on a single industry to provide revenue and employment, any losses incurred by an economic downturn in one area can sometimes be made up in another.

In Fayette County, there are sites smaller than 20 acres for industry and office space, but industries looking for more can look to neighboring areas. Lexington officials encourage those businesses that relocate outside Fayette County to look to the workforce who live and play in the area, which includes a talent pool of recent graduates from the University of Kentucky and the system of community and technical schools.

As the country’s economy slows, however, there’s nothing indicating the city or the state will be able to avoid the effects of a recession.

In an email, Kentucky Center for Economic Policy Executive Director Jason Bailey said, “there’s no question the economy is weakening overall and there’s no reason to think Kentucky will be immune from problems if that continues.”

“We’re a state where manufacturing and construction have been bright spots in recent years, but to see those jobs fall nationally is certainly a red flag for Kentucky,” he said.

There are opportunities to afford Kentuckians good jobs, the center has previously written in an analysis of the state’s labor force. Providing support through child care, health care and “investing in job-creating public investment,” especially in Eastern Kentucky, could empower people to enter or reenter the workforce, the center said.

Gorton pointed to the city’s investments in Coldstream Research Campus, Legacy Business Park and the new regional center in Madison County as ways it’s creating opportunities for business.

In public-private partnerships, the city is also working to make Lexington a national agriculture technology hub through grants that support startups, the first round of which engaged more than 35 farms, supported more than 55 jobs and created a dozen new positions.

And earlier this year, the city opened its Davis Park Workforce Center where staff offer assistance in job searching, resume writing, employability skills building, partner referrals and host job fairs. On Wednesdays, the center hosts seminars on workforce partners. Starting this month, employers will begin to share job openings within their companies.

More on national jobs report

The Sept. 5 jobs report is the first to be released after President Donald Trump fired the labor statistics director following poor early summer results he said he believed to have been altered and incorrect. And it comes just weeks before the Federal Reserve, the country’s central bank responsible for setting interest rates, is set to meet.

The expectation is later this month, the Fed will make a series of cuts that will make it easier to borrow and spend money, including on labor.

Of all the cities in the Federal Reserve’s Fourth District, Lexington recovered the most jobs the quickest during the pandemic. But since, and especially in recent weeks, data from across the district show flat employment levels as a result of decreased demand for labor.

Across industries, departing staff are not being replaced as a means of reducing costs and some manufacturers said they were decreasing hours.

In Lexington, Gorton said, the city is seeing minimal growth in employment right now after setting an all-time employment record in March when 178,203 residents had jobs. Last summer, the top three job sectors were health care and education, transportation and utilities, followed by business services, according to an early year Budget, Finance, and Economic Development Committee hearing.

Gains in summer payroll in June and July, or the increase in the total number of jobs during a period of time, were revised as part of the August report and show the country lost 13,000 jobs in June, the first reported job losses since the pandemic months at the end of 2020.

Those revised numbers show over the past three months, the country has created fewer than 30,000 new jobs per month, according to the Associated Press. In 2024, the average monthly job gain was 168,000 jobs and between 2021 and 2023, monthly job additions averaged 400,000, due in part to post pandemic employment recovery.

For the fourth straight month, manufacturing jobs decreased by 12,000, according to the report, and construction companies cut 7,000 jobs. About 15,000 federal government jobs were lost in August, something union leaders have pushed against locally.

The health care and social assistance employment sectors added nearly 47,000 jobs in August, making up for losses elsewhere in the economy.

Piper Hansen

Lexington Herald-Leader

502-648-6715

Piper Hansen is a local business and regional economic development reporter at the Lexington Herald-Leader. She previously covered similar topics and housing in her hometown of Louisville, Kentucky. Before that, Hansen wrote about state government and politics in Arizona.