State's jobless rate hits 9.8 percent

Kentucky's unemployment rate soared in March, reaching a 25-year high of 9.8 percent and well outpacing the nation's as a whole.

Driven by job losses in the manufacturing and construction industry, the rate increased from 9.3 percent in February and skyrocketed from 5.9 percent in March 2008, the state Office of Employment and Training said Friday.

The manufacturing sector lost 2,700 jobs in March, the 10th straight month of job losses. The sector has shed 36,900 jobs since last March.

And the trend shows no signs of slowing. Managers have told employees at Noble Metal Processing's plant in Shelbyville that production will cease on April 24, according to worker Charles Brinegar. He's one of 79 who will lose their jobs.

"It's going to be rough. I'm probably going to have to cash out my 401(k) and take a big loss on that just to keep paying the house payment," said Brinegar, who has worked at the plant since it opened in 1999 and had been with its parent company since 1997.

And Kuhlman Electric Corp., a large Versailles employer since 1969 with around 200 employees, will see 70 gone as of May 1. Others will leave June 30, as the company's production lines move elsewhere. At least 40 employees will remain, though, as the company's headquarters staff.

The construction sector was also a heavy loser in March with 1,400 jobs disappearing.

"This is the fifth consecutive month of employment declines, which is a sign of weakness in specialty trade contractors," said Justine Detzel, chief labor market analyst for the Office of Employment and Training.

And it's more bad news for Brinegar, who worked in construction before starting at Noble.

"Those were my two major skills, and they're the hardest hit," said Brinegar, who lives outside Waddy with his wife and 3-year-old daughter. "I may have to do something I really don't want to do."

Only one other sector saw a job loss of more than 1,000. That was professional and business services, which shed 1,700 positions, namely in administrative and support management, Detzel said.

Losing ground

Kentucky's March unemployment rate is more than a percentage point higher than the nation's rate.

Throughout the 1990s and the early part of this decade, Kentucky tracked closely to the nation's rate but has lost ground over the past year.

In January 2008, Kentucky was just 0.6 percentage points higher than the nation. Now the difference has more than doubled to 1.3 percentage points.

"It's still a little puzzling to me why we've jumped up above the U.S. at the amount we have," said University of Kentucky economics professor John Garen. "We are slightly more dependent on manufacturing than the U.S. as a whole, but it's not a huge amount."

Garen said he sees no quick recovery in sight for the state or nation.

"I'm hoping things will kind of stabilize out here a little bit, but there's still a lot of uncertainty," he said, questioning the effectiveness of federal policies.

"There are still a lot of question marks about this financial bailout ... and that adds to the uncertainty," he said.


There were some bright spots, though, in an otherwise gloomy report.

Kentucky's trade, transportation and utilities sector, the largest in the state with more than 375,000 employees, added 1,600 jobs last month.

It's the first time since August that the sector has added jobs, due to "multiple store openings." However, the transportation, warehousing and utilities portions of the sectors saw "significant job losses," Detzel said.

The leisure and hospitality sector also saw a boost of 1,400 jobs, mainly because of "numerous restaurant openings," she added.

Also, the state on Friday issued an emergency regulation to allow Kentuckians to stay on unemployment after their jobless benefits would otherwise have run out.