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Kentucky Jobless Rate Drops Below Double Digits

Fri, 06/17/2011 - 4:20am
Bruce Schreiner, Associated Press

LEXINGTON, Ky. (AP) — Kentucky's jobless rate in May dipped below double digits for the first time since early 2009, but high gas and food prices coupled with supply disruptions from Japan that hit manufacturing "weighed down" the job market, a state labor official said Thursday.

The unemployment rate fell to 9.8 percent last month, matching the rate in February 2009, according to the state Office of Employment and Training. The statewide jobless rate was 10 percent in April and 10.4 percent in May 2010.

Kentucky's rate was above the 9.1 percent national figure in May.

Gov. Steve Beshear said the drop offered "another indicator that there is light at the end of the tunnel" in Kentucky's recovery from the deep national recession, but he acknowledged many families continue to struggle.

"Our economy continues to show signs of steady recovery," said Beshear, a Democrat running for re-election this year.

Despite the monthly drop in the state, nonfarm employment was "weighed down by supply disruptions due to the tsunami in Japan and high food and gas prices," said chief labor market analyst Justine Detzel.

The U.S. Bureau of Labor Statistics estimates that slightly more than 1.9 million Kentuckians were employed in May. The figure was up 6,421 from April 2011 and up 48,978 from May 2010. Kentucky's population was 4.3 million in 2009.

Republican challenger David Williams' campaign pointed to statistics released alongside the jobless rate that showed employers across a broad range of sectors actually cut jobs in May.

Scott Jennings, senior campaign adviser to Williams, said Kentucky's high unemployment rate is a result of "inaction" by Beshear.

"It is obvious that many people who have been looking for work for months have either given up or moved to other states that have better job opportunities," Jennings said.

A separate survey of employers showed employment declines across a number of sectors.

One bright spot was Kentucky's leisure and hospitality sector, which added 700 jobs in May, continuing a surge that has added 11,500 jobs in the sector in the past year, according to the survey.

But the state's largest sector — encompassing trade, transportation and utilities — lost 1,300 jobs in May, the survey said. The sector includes retail and wholesale trade, and Detzel said the employment decline occurred in retail trade.

"As gas and food prices surge, consumers are struggling to make ends meet," Detzel said.

Kentucky's manufacturing sector shed 1,100 jobs in May, but in the past year it has added 4,100 positions.

Job losses in manufacturing are focused on the durable goods sector, Detzel said. It reflects layoffs at an auto supply producer that was disrupted by the tsunami in Japan and because a conveyor maker closed, she said.

The statistics also showed job declines last month in government, educational and health services, professional and business services and other segments of the state economy.

University of Kentucky professor Ken Troske, chairman of the school's economics department, said Kentucky's job market continues to show steady improvement but at a fairly slow rate. Employment declines in construction, manufacturing and retail trade sectors reflect weakness in those key sectors, he said.

"This continued weakness is one of the main reasons why we are not seeing faster growth in employment and a faster overall recovery," Troske said in emailed remarks.

Detzel said job losses reflected in the survey for May are expected to be temporary. She said the several factors behind losses — including high gas prices and supply disruptions from Japan — are abating.

"As these headwinds subside, the economic recovery will regain strength," Detzel said.

Kim Brannock, a spokeswoman for the Office of Employment and Training, said the separate surveys reflecting the overall jobless rate and hiring trends within sectors of the economy sometimes "do not go in the same direction."

"Both provide a snapshot of what was happening in the labor force but from different points of view," she said.

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