Ky. unemployment rate drops to 10%

Kentucky's unemployment rate fell to 10 percent in June, down from 10.4 percent in May, but behind the good news was a troubling sign.

"The decrease ... is driven by a decline in the civilian labor force," said Justine Detzel, chief labor market analyst for the state Office of Employment and Training. "Individuals who have faced long-term unemployment are becoming discouraged and dropping out of the labor force."

The state added 6,200 jobs in June, marking the fourth straight month of job gains. The month also represents the highest level of non-farm employment since January 2009.

It also continued another milestone in the road to economic recovery, as June was the second consecutive month of year-over-year job increases.

"Prior to this, Kentucky suffered 26 consecutive months of year-over-year employment losses," Detzel said in a statement.

The state's unemployment rate continued to outpace the national rate of 9.5 percent.

Seven of the 11 major industries that are tracked showed employment increases in June, while four decreased. The biggest increase came in the manufacturing sector, which added 2,700 jobs. Detzel attributed that to automotive manufacturers increasing production.

The leisure and hospitality sector added 2,100 jobs in June, as "consumers are loosening their purse strings and opening their wallets," Detzel said.

Other sectors seeing job increases were construction (1,600), educational and health services (1,200), trade transportation and utilities (600), mining and logging (100), and professional and business services (100).

Job losses were most evident in the financial activities sector, which shed 1,100 positions. Detzel said the expiration of the federal home-buyer tax credit led to the real estate and leasing industry in that sector losing 600 positions.

Other sectors losing jobs were government (600), other services (300) and information (200).