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Kentucky’s 2021 annual unemployment rate decreased to 4.7%

Bill Stephens

March 7th, 2022

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FRANKFORT, Ky. (March 7, 2022) —Kentucky’s annual unemployment rate for 2021 was 4.7% according to the Kentucky Center for Statistics (KYSTATS), an agency of the Kentucky Education and Workforce Development Cabinet. This is a decrease from 6.4% in 2020.

The U.S. annual unemployment rate fell to 5.3% in 2021 from 8.1% in 2020.

The U.S. Bureau of Labor Statistics’ estimate of the number of employed Kentuckians for 2021 was 1,941,737. This figure was up 54,738 from the 1,886,999 employed in 2020.

The number of unemployed Kentuckians for 2021 was 95,205, down 34,598 or 26.7% from the 129,803 unemployed in 2020. There were 98,127 fewer individuals or 50.8% less unemployed in 2021 than 10 years ago.

In 2021, the estimated number of Kentuckians in the civilian labor force was 2,036,942. This was up 20,140 from the 2,016,802 recorded in 2020, and down 24,558 from 10 years ago when the civilian labor force was 2,061,500.

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.

Forty-nine states experienced a statistically significant decrease in their annual unemployment rates from 2020 to 2021. Maine’s unemployment rate for 2021 was not statistically different from 2020. Kentucky’s unemployment rate for 2021 was higher than 24 states and lower than 25 states. California had the highest unemployment rate in 2021 at 7.3%. Nebraska had the lowest rate at 2.5%. Among its surrounding states, Kentucky’s unemployment rate was lower than Illinois, Ohio and West Virginia and higher than Indiana, Missouri, Tennessee, and Virginia.

“The annual labor force estimates show that Kentucky’s economy improved significantly from 2020 to 2021,” said University of Kentucky’s Center for Business and Economic Research (CBER) Director Mike Clark, Ph.D. “However, because the annual estimates are averages for the year, they tend to mask the improvements that occurred throughout 2021. For example, from December 2020 to December 2021, the number of people unemployed was down 4.1%; the number employed was up 2.2%, and the number in the labor force was up 1.9%.”

In a separate federal survey of business establishments that excludes jobs in agriculture and people who are self-employed, Kentucky’s nonfarm payroll in 2021 increased by 59,100 or 3.2% to 1,896,400 jobs.


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

“While the pandemic caused large employment losses in 2020, 2021 saw significant improvements in employment across most major sectors as businesses expanded their payrolls to meet strong demand for goods and services,” said Clark. “Employment growth for 2021 was likely somewhat constrained as businesses often struggled to find workers during the pandemic.”

Employment in Kentucky’s leisure and hospitality sector expanded by 16,300 positions in 2021, and 11,700 jobs in the past 10 years. Most of these jobs gains were concentrated in accommodation and food services, which gained 13,900 positions in 2021. The arts, entertainment and recreation subsector added 2,400 jobs from 2020 to 2021.

“The pandemic hit Kentucky’s leisure and hospitality hard in 2020,” said Clark. “While employment in this sector is still below pre-pandemic levels, it has improved considerably during 2021 as consumers returned to restaurants and entertainment venues.”

Kentucky’s trade, transportation and utilities sector added 15,100 jobs or 3.8% in 2021. During the past 10 years, the number of jobs increased by 46,300 jobs or 12.7%. This is Kentucky’s largest sector based on employment with a total of 411,700 jobs or 21.7% of Kentucky’s nonfarm employment. Within the sector, wholesale trade gained 1,400 jobs from 2020 to 2021, retail trade grew by 5,400 jobs, and transportation, warehousing and utilities gained 8,300 jobs.

Firms in the state’s professional and business services sector increased by 11,500 jobs in 2021 or 5.5%. This sector includes professional, scientific and technical services, management of companies, and administrative and support management. In the last 10 years, the sector has grown by 30,000 jobs or 15.9%. Within this sector, professional, scientific and technical services added 3,700 jobs; management of companies added 600 jobs, and administrative and support and waste management added 7,200 jobs.

The educational and health services sector expanded by 7,300 jobs in 2021 and gained 24,200 jobs or 9.4% over the past 10 years. Employment in the healthcare and social assistance subsector increased by 6,800 jobs in 2021, and added 26,100 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 added 500 jobs from 2020 to 2021 or 1.8%, but decreased by 1,900 jobs over the past 10 years.

Kentucky’s manufacturing sector gained 6,900 jobs or 2.9% in 2021 for a total of 242,400 positions. Over the past 10 years, manufacturing employment was up 29,600 jobs, a gain of 13.9%. Durable manufacturing added 5,700 jobs or 3.8% from 2020 to 2021 and non-durable manufacturing rose by 1,300 jobs or 1.5%.

The financial activities sector increased by 2,700 jobs from a year ago. Over the past 10 years, this sector has added 10,700 jobs or 12.6%. Within this sector, the finance and insurance subsector gained 2,000 jobs in 2021, while real estate, rental and leasing increased by 700 jobs in 2021.

Kentucky’s construction sector expanded by 1,200 jobs in 2021 or 1.5%. The sector has increased by 11,200 jobs or 16.6% since 2011.

Other services, a sector that includes repair and maintenance; personal and laundry services; and religious, civic, and professional organizations, added 1,000 jobs in 2021. The sector has lost 5,200 jobs or 7.7% in the last 10 years.

The information sector, which includes establishments involved in publishing, Internet activities, data processing, broadcasting and news syndication, grew by 400 jobs in 2021 from a year ago. It lost 4,200 jobs or 16.8% compared to 10 years ago.

Employment in the mining and logging sector increased by 1.3% with the gain of 100 jobs in 2021. Over a 10-year period the sector decreased by 15,300 jobs or 66.8%. Other industries included in the sector are forestry; oil and gas extraction; and support activities for mining.

The government sector, which includes federal, state and local employment in public education, public administration agencies and state-owned hospitals, dropped by 3,700 jobs or 1.2% in 2021. Employment in this sector was down 26,300 jobs over the last 10 years, or 8.2%. During the past year, employment fell 600 jobs in federal government, decreased 3,000 jobs in state government, and dropped 200 jobs in local government.

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.


Coronavirus (COVID-19) Pandemic Impact on 2021 Household Survey Data

Labor force statistics, including the unemployment rate, are based upon estimates from the Current Population Survey of households. Nonfarm employment data are provided by the BLS’ Current Employment Statistics survey program. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry.

The 2021 annual estimates are based on the average monthly estimates derived from these surveys during the year. Response rates for both the household and establishment survey were affected by the pandemic. Response rates improved through the year. By December 2021, the household survey response rate for the nation was 77%. This was an improvement from the low of 65% in June but below the average of 83% for the 12 months prior to the pandemic. The collection rate for the establishment survey for the nation in December was 76%, which was about the same as the average for the 12 months ending in February 2021.

The “Impact Summary” documents associated with the Employment Situation news release listed at the link below, extensively discuss the monthly impacts of a misclassification in the household survey on the national estimates beginning in March 2021. Despite the considerable decline in its degree relative to the initial months of the pandemic, this misclassification continued to be widespread geographically through the end of 2021, with BLS analysis indicating that most states still were affected to at least some extent as of December. However, according to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses. Hence, the household survey estimates of employed and unemployed people that serve as the primary inputs to the state models were affected to varying degrees by the misclassification, which in turn affected the monthly estimates underlying the 2021 annual averages presented in this news release.

More information is available at https://www.bls.gov/covid19/effects-of-covid-19-pandemic-and-response-on-the-employment-situation-news-release.htm .

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