The state’s economic climate continues to improve, a University of Kentucky economics professor told lawmakers on Wednesday, as more people enter the state’s workforce.
The state’s unemployment rate is below the national average, British professor Michael W. Clark told members of the General Assembly’s interim committee on appropriations and revenues.
Kentucky’s unemployment rate was 4.3% in August, the latest date for which statistics were available. According to the Education and Workforce Development Cabinet, the country’s unemployment rate in August was 5.4 percent.
“We are seeing some people coming back to the workforce,” Clark told lawmakers. “… People who return to the workforce find jobs, and it’s not surprising.
“Many employers are struggling to find workers. “
The overall workforce participation in Kentucky is 56.4%, which is lower than the national average, Clark said.
Kentucky lost 295,000 jobs in the first two months of the COVID-19 pandemic, and while employers are hiring, some industries have not returned to pre-pandemic employment levels. For example, employment levels in the leisure and hospitality industry are down 16.2% from their pre-pandemic level.
Clark said the Delta variant likely played a role, as people concerned about the variant stayed home, which meant fewer hospitality workers were needed.
Additionally, some companies in the hospitality industry “can’t find workers ready for work,” Clark said.
Companies are recruiting.
“Over the past few months, job postings have increased dramatically,” Clark said.
Hiring has increased, but the hiring rate is not keeping up with the number of open jobs posted, Clark said.
“As employment improves, we still see these issues in the labor market, where companies are struggling” to hire, Clark said.
The number of people leaving their jobs is also on the rise, Clark said, which could indicate those workers have quit to take better-paying jobs elsewhere.
The number of unemployment insurance claims continues to decline, Clark said.
“It tells us that employers are trying to keep their workers,” he said. “They don’t lay off or lay off a lot of workers. “
The tight labor market has resulted in wage growth in some areas, such as retail and hospitality, Clark said. While inflation rose to 5.2% in June, economists believe the spike is likely temporary.
“We saw the prices really go up in June,” in part because of supply issues, Clark said.
But the price increase slowed after June, he said.
James Mayse, 270-691-7303, [email protected], Twitter: @JamesMayse