By Tom Latek
Kentucky Today
The COVID-19 pandemic caused Kentucky’s annual unemployment rate for 2020 to jump more than 50% above the 2019 figure, state officials reported on Monday.
Kentucky’s annual unemployment rate for 2020 was 6.6%, up from 4.1% in 2019, according to the Kentucky Center for Statistics, an agency of the Kentucky Education and Workforce Development Cabinet.
The U.S. annual unemployment rate had an even bigger spike, jumping to 8.1% in 2020 from 3.7% in 2019.
All 50 states experienced a statistically significant increase in their annual unemployment rates from 2019 to 2020. Kentucky’s unemployment rate for 2020 was higher than 20 states and lower than 29 states.
Nevada had the highest unemployment rate in 2020 at 12.8%, while Nebraska had the lowest rate at 4.2%. Among its surrounding states, Kentucky’s unemployment rate was lower than Illinois, Indiana, Ohio, Tennessee and West Virginia, but higher than Missouri and Virginia.
In a separate federal survey of business establishments that excludes jobs in agriculture and people who are self-employed, Kentucky’s nonfarm payroll in 2020 decreased by 110,018, or 5.7%, to 1,835,367 jobs.
“The annual labor force estimates provide additional data on how the pandemic affected Kentucky’s economy,” said the UK Center for Business and Economic Research Director Mike Clark. “However, the annual numbers mask the magnitude of the economic contraction and the speed of the recovery. For example, while Kentucky’s annual unemployment rate only increased by 2.5 percentage points in 2020, the state’s monthly unemployment rate jumped from 4.2% in March to 16.9% in April. Kentucky’s unemployment rate then declined quickly, ending the year at 5.6% in December.”
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 showed employment losses in 2020.
“Employment losses were widespread, with all major industrial sectors reporting lower employment levels at some point during the year,” said Clark. “Ten years ago, the Great Recession had just ended and the economy began its longest expansion is U.S. history.”
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.