FRANKFORT, Ky. (April 9, 2026) — Kentucky’s annual unemployment rate for 2025 was 4.6%, according to the Kentucky Center for Statistics (KYSTATS), an agency of the Kentucky Education and Labor Cabinet.

The U.S. annual unemployment rate was 4.3% in 2025. 

The U.S. Bureau of Labor Statistics’(BLS) estimate of the number of employed Kentuckians for 2025 was 2,018,309. The number of unemployed Kentuckians for 2025 was 97,280. In 2025, the estimated number of Kentuckians in the civilian labor force was 2,115,589.

Labor force statistics, including the unemployment rate, are based on estimates from the Current Population Survey (CPS) of households. The survey is designed to measure trends in the number of people working. It includes jobs in agriculture and individuals who are self-employed.

Due to the lapse in federal appropriations, October 2025 data collection did not occur for the CPS, which provides the primary inputs to the Local Area Unemployment Statistics estimation. Concurrent with this news release, statewide averages for 2025 are based on the 11 months for which CPS data collection occurred and were published in the BLS time-series database. These 11-month averages are not strictly comparable to annual averages for prior years.

Kentucky’s unemployment rate for 2025 was higher than 39 states, lower than eight states and equal to two states. California had the highest unemployment rate in 2025 at 5.5%. South Dakota had the lowest rate at 2.1%. Kentucky along with Illinois and Ohio had the highest unemployment rate among its surrounding states.

In a separate federal survey of business establishments that excludes jobs in agriculture and people who are self-employed, Kentucky’s nonfarm annual average payroll employment in 2025 decreased by 3,400 or 0.2% to 2,033,100 jobs.

“The business survey suggests that the labor market weakened during 2025,” said University of Kentucky’s Center for Business and Economic Research (CBER) Director Mike Clark, Ph.D. “The revised estimates show that employers reduced their average annual payrolls by 3,400 jobs. Job losses occurred across most major sectors but were largest in the manufacturing sector. These losses were partially offset by gains in the private educational and health care services sector and the government sector, which includes public education, public administration agencies and state-owned hospitals.”

Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to this survey, eight of Kentucky’s 11 major nonfarm job sectors listed in the North American Industry Classification System (NAICS) saw annual average employment decreases in 2025 compared to 2024, while three had average annual employment increases.

The private educational and health services sector expanded by 5,000 jobs in 2025 and gained 55,200 jobs or 20.9% over the past 10 years. Employment in the healthcare and social assistance subsector increased by 5,300 jobs in 2025 and gained 55,100 jobs over the past 10 years. Educational services in this sector include employees at private elementary, secondary and post-secondary schools along with other establishments that provide instruction and training. Education services lost 300 positions from 2024 to 2025 or 1%, and increased by 100 jobs over the past 10 years.

The government sector, which includes federal, state and local employment in public education, public administration agencies and state-owned hospitals, added 2,300 jobs or 0.7% in 2025. The number of positions in this sector fell by 1,400 during the last 10 years or 0.4%. During the past year, employment was down 1,300 jobs in federal government, up 2,100 jobs in state government, and up 1,500 jobs in local government.

The financial activities sector gained 100 positions from a year ago. Over the past 10 years, this sector has added 3,400 jobs or 3.7%. Within this sector, the finance and insurance subsector decreased by 400 jobs in 2025, while real estate, rental and leasing increased by 500 positions.

Other services, a sector that includes repair and maintenance; personal and laundry services; and religious, civic and professional organizations, lost 200 jobs in 2025. The sector added 9,500 jobs or 14.8% in the last 10 years.

Kentucky’s leisure and hospitality sector fell by 300 positions in 2025 but gained 18,200 jobs over the past 10 years. The accommodation and food services sector lost 400 positions in 2025. Employment in the arts, entertainment and recreation subsector rose by 100 jobs from 2024 to 2025.

The information sector, which includes establishments involved in publishing, internet activities, data processing, broadcasting and news syndication, dropped by 500 positions in 2025 from a year ago. The sector lost 2,300 jobs or 10.1% compared to 10 years ago.

The state’s professional and business services sector decreased by 600 jobs or 0.3% in 2025. In the last 10 years, the sector has grown by 4,900 jobs or 2.2%. Within this sector, professional, scientific and technical services were down 100 jobs from 2024 to 2025, management of companies lost 500 jobs, and employment in the administrative and support and waste management subsector was unchanged.

Employment in the mining and logging sector declined by 10.1% with the loss of 800 jobs in 2025. Over a 10-year period the sector decreased by 6,900 jobs or 49.3%. Other industries included in the sector are forestry; oil and gas extraction; and support activities for mining.

Kentucky’s construction sector lost 1,100 jobs in 2025 or 1.2%. The sector has increased by 16,700 jobs or 22% since 2015.

“Revised estimates show that construction employment was weaker through most of 2025 compared to 2024,” said Clark. “Monthly employment was down in 10 months of 2025 compared to the same month in 2024.”

Kentucky’s trade, transportation and utilities sector declined by 1,800 jobs or 0.4% in 2025. During the past 10 years, the number of jobs increased by 39,200 or 10.2%. This is Kentucky’s largest sector based on employment with a total of 425,100 jobs or 21% of Kentucky’s nonfarm employment. Within the sector, wholesale trade gained 300 jobs from 2024 to 2025, retail trade lost 300 jobs, and transportation, warehousing and utilities decreased by 1,700 jobs.

Kentucky’s manufacturing sector contracted by 5,200 jobs or 2% in 2025 for a total of 252,500 positions. Over the past 10 years, manufacturing employment was up 11,100 jobs, a gain of 4.6%. Durable manufacturing fell by 4,700 jobs or 2.8% from 2024 to 2025 and non-durable manufacturing decreased by 500 jobs or 0.5%.

“Most of the jobs losses for the year occurred in Kentucky’s durable goods manufacturing sector,” said Clark. “Employment at non-durable goods manufacturers made some initial gains early in the year but lost ground as the year progressed.”

Unemployment statistics are based on estimates and are compiled to measure trends rather than actually to count the number of people working. Civilian labor force statistics include non-military workers and unemployed Kentuckians who are actively seeking work. They do not include unemployed Kentuckians who have not looked for employment within the past four weeks.

Learn more about Kentucky labor market information at http://kystats.ky.gov/KYLMI.