FRANKFORT, Ky. (March 6, 2023) — Kentucky’s annual unemployment rate for 2022 decreased to 3.9% from 4.4% in 2021, according to the Kentucky Center for Statistics (KYSTATS), an agency of the Kentucky Education and Labor Cabinet.  This is a drop from 10 years ago when the annual rate in 2012 was 8.2% and is the lowest seen since the US Bureau of Labor Statistics began reporting state unemployment rates in 1976.

The U.S. annual unemployment rate fell to 3.6% in 2022 from 5.3% in 2021. 

The U.S. Bureau of Labor Statistics’ estimate of the number of employed Kentuckians for 2022 was 1,968,121. This figure was up 30,584 from the 1,937,537 employed in 2021 and up 77,012 from the 1,891,109 employed in 2012.

The number of unemployed Kentuckians for 2022 was 79,945, down 9,683 from the 89,628 unemployed in 2021. There were 89,030 fewer individuals unemployed in 2022 than 10 years ago. 

In 2022, the estimated number of Kentuckians in the civilian labor force was 2,048,066. This was up 20,901 from the 2,027,165 recorded in 2021, and down 12,018 from 10 years ago when the civilian labor force was 2,060,084. 

Labor force statistics, including the unemployment rate, are based on estimates from the Current Population Survey 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.

All fifty states experienced a decrease in their annual unemployment rates from 2021 to 2022. Kentucky’s unemployment rate for 2022 was higher than 33 states, lower than 13 and equal to three states. Nevada had the highest unemployment rate in the U.S. in 2022 at 5.4%, while North Dakota and South Dakota had the lowest rate at 2.1%. Among its surrounding states, Kentucky’s unemployment rate was lower than Illinois and Ohio, the same as West Virginia, and higher than Indiana, Missouri, Tennessee and Virginia.

“Kentucky’s economy continued to improve through 2022. With demand for workers strong, Kentucky saw more people employed than in 2021 and fewer people unemployed,” said University of Kentucky’s Center for Business and Economic Research (CBER) Director Mike Clark, Ph.D. “The commonwealth’s unemployment rate fell to a historic low of 3.8% during the spring of 2022 and averaged 3.9% for the year. Kentucky’s annual labor force increased from 2021 to 2022. However, the gains in labor force occurred early in the year and monthly estimates suggest the labor force declined somewhat by the end of 2022.”

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 2022 increased by 59,300 or 3.1% to 1,962,800 jobs. The state’s nonfarm annual average payroll employment rose 8.4% from 1,811,100 in 2012. 

Nonfarm data is provided by the Bureau of Labor Statistics’ Current Employment Statistics program. According to this survey, all of Kentucky’s 11 major nonfarm job sectors listed in the North American Industry Classification System (NAICS) showed employment gains in 2022 compared to 2021.

“Kentucky’s employers expanded their payrolls to help meet strong demand for their goods and services last year,” said Clark. “The job gains were widespread with all major sectors showing more jobs in 2022 than the previous year.”

Employment in Kentucky’s leisure and hospitality sector expanded by 13,700 positions in 2022, and 20,400 jobs in the past 10 years. Most of these job gains were concentrated in accommodation and food services, which gained 11,500 positions in 2022. The arts, entertainment, and recreation subsector added 2,200 jobs from 2021 to 2022.

“Employment in Kentucky’s leisure and hospitality sector continued to recover in 2022 and has nearly returned to its pre-pandemic levels,” said Clark.

Kentucky’s trade, transportation and utilities sector jumped by 12,600 jobs or 3.1% in 2022. During the past 10 years, the number of jobs increased by 56,400 jobs or 15.3%. This is Kentucky’s largest sector based on employment with a total of 425,200 jobs or 21.7% of Kentucky’s nonfarm employment. Within the sector, transportation, warehousing, and utilities gained 9,200 jobs, wholesale trade rose by 3,100 positions from 2021 to 2022, and retail trade gained 200 jobs.

Kentucky’s manufacturing sector grew by 9,300 jobs or 3.8% in 2022 for a total of 252,400 positions. Over the past 10 years, manufacturing employment was up 29,000 jobs or 13%. Durable manufacturing added 6,600 jobs or 4.2% from 2021 to 2022 and non-durable manufacturing added 2,800 jobs or 3.2%.

“Employment in the manufacturing sector began the year down but then jumped in August. These late gains in employment put the sector up for the year,” said Clark.

Firms in the state’s professional and business services sector increased by 8,500 jobs in 2022 or 3.9%. This sector includes professional, scientific, and technical services, management of companies, and administrative and support management. Since 2012, the sector has grown by 32,900 jobs or 16.8%. Within this sector, professional, scientific and technical services added 5,100 jobs, management of companies rose by 600 jobs, and administrative and support and waste management added 2,700 positions from 2021 to 2022.

The educational and health services sector expanded by 5,500 positions in 2022 and gained 28,200 jobs or 10.9% over the past 10 years. Employment in the healthcare and social assistance subsector increased by 6,000 jobs in 2022 and added 29,000 jobs over the past 10 years. Educational services in this sector include employees at private elementary, secondary and postsecondary schools along with other establishments that provide instruction and training. Educational services lost 600 jobs from 2021 to 2022 or 2.1% and decreased by 900 positions over the past 10 years.

Kentucky’s construction sector jumped by 3,100 jobs in 2022 or 3.9%. The sector has increased by 15,200 jobs or 22.6% since 2012.

Other services, a sector that includes repair and maintenance; personal and laundry services; and religious, civic, and professional organizations, added 3,000 jobs in 2022. The sector rose by 200 jobs or 0.3% in the last 10 years.

The government sector, which includes federal, state and local employment in public education, public administration agencies and state-owned hospitals, added 1,600 jobs or 0.5% in 2022. Employment in this sector was down 25,200 jobs over the last 10 years or 7.8%. During the past year, employment was down 400 jobs in federal government, down 1,000 jobs in state government, and up 2,900 positions in local government.

The information sector, which includes establishments involved in publishing, Internet activities, data processing, broadcasting and news syndication, gained 900 jobs in 2022 from a year ago. It lost 3,000 jobs or 12.2% compared to 10 years ago.

Kentucky’s mining and logging sector increased by 9.2% with 700 more jobs in 2022. Over a 10-year period the sector decreased by 12,200 jobs or 59.5%. Other industries included in the sector are forestry; oil and gas extraction; and support activities for mining.

The financial activities sector rose by 500 jobs from a year ago. Since 2012, this sector has added 9,800 jobs or 11.3%. Within this sector, the finance and insurance subsector decreased by 100 jobs in 2022, while real estate, rental and leasing increased by 600 jobs in 2022.

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.