FRANKFORT, Ky. (March 22, 2002) - Kentucky's annual unemployment rate rose to 5.5 percent in 2001, making it the highest jobless rate in five years, according to the Department for Employment Services.  The 2000 rate was 4.1 percent.

Five of the commonwealth's 10 job categories reported employment increases in 2001; however, there was an overall loss of 6,600 jobs.  "Even with the 6,600 drop in jobs from 2000 to 2001, Kentucky had an increase of 349,200 jobs from 1991 to 2001," said Carlos Cracraft, chief labor market analyst in the Department for Employment Services, an agency of the Cabinet for Workforce Development.

Cracraft said that 2001 marked the first time in 18 years that the state's job market had shrunk.  

The U.S. unemployment rate jumped to 4.8 percent in 2001 from 4 percent in 2000, the highest national rate since 1997. Unemployment rates rose in 42 states from 2000 to 2001.  North Dakota posted the lowest 2001 annual jobless rate in the country at 2.8 percent, while Washington D.C. had the highest annual rate at 6.5 percent, followed closely by Washington state at 6.4 percent. 

For the sixth straight year, the services sector was the largest employer in Kentucky, and gained 7,900 jobs in 2001.  Within the services category, health services recorded most of that growth with 6,200 more jobs in 2001.  "The gradual aging of the population coupled with advances in medical technologies that increase life expectancies have contributed to this growth. In the last 10 years, the health services industry has expanded by 27 percent and the employment outlook for these types of jobs is good," Cracraft said. Also within the services sector, social services positions increased by 2,200 in 2001.  Total employment for the sector was 483,600 in 2001.  Since 1990 the sector has added 147,500 jobs.

The government and education sector was second with an increase of 5,300 for a total of 310,400 jobs in 2001.  In the category, local education showed the most growth with 3,800 more jobs followed by 1,400 additional jobs in state education and 900 more positions each in state government and local government.  The federal government was the only area in the sector to decrease (-1,600) because extra workers hired in 2000 to take the census were let go.  "Of the 43,100 jobs added in the government and education sector in since 1991, 86 percent have been in state and local education.  Factors such as universal preschool, full-day kindergarten, reduced class size, increasing demand for postsecondary education and continued career and skills training are some of the reasons for the employment increases in state and local education," Cracraft said.

The agriculture sector rose by 1,600 jobs in 2001 for a total of 26,500 for the year. The sector has declined by 14,200 jobs since 1991.

Mining and quarrying jobs were on the upswing in 2001 as 700 jobs were added in 2001 for a total of 20,100 positions last year.  "There was a rare gain of 900 jobs in coal mining in 2001. That was the
largest single-year gain in coal mining jobs in Kentucky since 1984, but that growth trend is not expected to continue.  As more efficient and automated production methods require fewer workers, employment is projected to decline while output is expected to increase," Cracraft said. Overall, coal mining jobs have fallen by 12,400 jobs or 44 percent in the past decade.

The finance, insurance and real estate category recorded 200 new jobs last year for a total of 75,500 positions for 2001.  The finance industry added 600 jobs, while the real estate industry lost 300 jobs and the insurance category decreased by 100 jobs in 2001.  Since 1991, the sector has reported a 13,500-job increase.

On the down side, manufacturing jobs fell by 15,200 jobs in 2001 for a total of 307,200 jobs.  "Employment in the manufacturing sector decreased for the first time in five years in 2001. Even so, the manufacturing sector has added 25,800 jobs for a 9 percent growth over the last decade.  During that same period, manufacturing jobs on the national level have decreased 708,000 jobs or 4 percent," Cracraft said. Within the manufacturing sector in 2001, durable goods manufacturing dropped by 10,100 jobs with losses in industrial machinery, electronic equipment industry, lumber and furniture, and primary metal industries. Nondurable goods manufacturing also took a hit (-5,000) in 2001 with losses in textiles and apparel industries, rubber and miscellaneous plastics product.  "The garment industry's employment level has declined from 40,800 in 1993 to 20,400 in 2001 - a 50 percent plunge over that eight year period," Cracraft
noted.  "On the positive side, manufacturing is expected to exhibit modest growth in the future, primarily due to firms that produce durable goods.  The demand for items such as computers, electronic components, motor vehicles and communication equipment should lead to more jobs in this sector," he said.

Trade, Kentucky's second largest employment sector, recorded a 4,700-job fall in 2001 for a total of 424,000 in the sector last year.  Since 1991, trade jobs have jumped by 73,100. "This sector lost 4,700 jobs in 2001 after 19 consecutive years of employment growth.  Most of that decrease was in retail trade (-3,500), but wholesale trade tumbled, too (-1,200).  We had a loss of 2,400 jobs in food stores in 2001 because of the trend toward large general merchandise stores selling groceries.  Other significant losses occurred in home furniture, furnishings and equipment stores (-1,200) and automotive dealers and gas
stations (-1,000). "On the other hand, jobs in eating and drinking establishments went up by 2,400 in 2001.  Approximately one out of every three retail trade jobs is in the eating and drinking establishments category.  Since 1991, there has been an jump of 28,200 jobs in this category," Cracraft said. Demographic factors such as increases in population, personal incomes, leisure time and dual-income families will contribute to a projected rise in employment in the trade sector, he said.

Transportation, communications and public utilities employment fell by 1,200 jobs in 2001 for a total of 108,000.  Public utilities had the largest decrease in this category with 800 fewer positions, while transportation dropped by 500 jobs in 2001, Cracraft said.  Since 1991, the sector has grown by 27,600 positions.

Construction had 800 fewer positions in 2001, the first time in 10 years this sector has fallen. General building contractors, which include residential builders, had 600 fewer positions in 2001, while special trade
categories such as plumbing, heating and air conditioning, electrical work and bricklaying lost 200 jobs, Cracraft said.  The sector has added 24,000 jobs since 1991 for a total of 88,000 positions last year.
Cracraft said the construction sector is expected to have slow employment growth during the next few years.

The category of domestics, self-employed and unpaid family workers reported a dip of 400 jobs in 2001 for a total of 137,800 positions.  Since 1991, the sector has added 21,200 positions.