Ky. jobless rate below 10% but for bad reasons

Kentucky's unemployment rate fell below 10 percent in July for the first time since February 2009, but the reason behind the decline was anything but good news.

The drop to 9.9 percent "continues to be a result of the decrease in the state's civilian labor force because people have become discouraged in their job search," said Ron Crouch, director of research and statistics in the state's Office of Employment and Training. "People who have not looked for a job in the last four weeks are no longer counted in the labor force."

July also marked the end of a spate of job gains. For four months, the state had added jobs each month, but in July, that reversed course to a drop of 8,000 positions.

The state's unemployment rate continued to outpace the national rate of 9.5 percent. A year ago, the state's unemployment rate was 10.8 percent.

Nine of the 11 major industries that are tracked showed employment decreases in July. The increases came in the trade, transportation and utilities sector, as well as the professional and business sector. The former added 3,600 jobs in July, as the number of jobs in retail trade and wholesale trade rose. In a statement, Crouch attributed some of that to "people buying supplies and clothes for school."

The professional and business services sector added 1,000 jobs.

Meanwhile, the government sector saw the largest declines with a drop of 4,800 jobs. The largest of that came in the federal government area with the end of short-term help linked to the Census.

"State government also saw a large decrease in positions as the state budget constricts," Crouch said.

The manufacturing sector shed 4,200 jobs, as the losses were concentrated in the food and tobacco industries. Some automotive manufacturers also had temporary layoffs to retool their plants, he said.

Kentucky's leisure and hospitality sector dropped by 1,300 jobs, primarily in hotels and restaurants. Crouch said it appears people cut back on travel and vacationing.

"Normally, we have an increase in travel during the summer as people vacation, but this year we are seeing fewer people take to the road because of the economic downturn across the country," he said.

Other sectors seeing job losses were other services (700), educational and health services (600), construction (500), financial activities (200), information (200) and mining and logging (100).