Local and statewide residents searching for jobs continue to get them, though national monetary policy could soon make that more challenging.
The latest figures from the Bureau of Labor Statistics show Louisville and Kentucky continue to have low unemployment rates.
The unemployment rate represents how many people are actively seeking jobs but don’t have one. It’s a portion of the total labor force, which represents all people aged 16 and older who can work and either have a job or are searching.
Metro Louisville’s unemployment rate for this past July was 3.7%, compared to 4.8% in July 2021. It’s the lowest mark for the month since 1998.
The BLS’s metro data is not seasonally adjusted, meaning usual monthly employment trends, such as summer months having a larger labor force, are not considered in the agency’s calculations. They are, however, adjusted on the statewide and national levels.
Kentucky’s unemployment rate in July was 3.7%, the same mark it hit in June. Since April, the commonwealth has had its lowest unemployment rates ever recorded.
The BLS’s national data, which is released sooner than regional data, shows U.S. unemployment rose slightly from July to August, from 3.5% to 3.7%, though it remains around pre-pandemic levels.
Sarah Ehresman, director of labor market intelligence at the Louisville government agency KentuckianaWorks, said not all of the city’s industries have recovered evenly from the pandemic.
“The logistics sector—transportation, warehousing and utilities—the sector rebounded very early on in the recovery from the COVID-19 recession, and it still has employment levels that are well beyond the levels that we saw prior to the pandemic,” Ehresman said.
“We still see employment levels have not yet recovered in manufacturing, and in leisure and hospitality, and also the public sector,” she added.
The unemployment rate at all three levels is low and indicative of a tight labor market where there are more jobs to fill than available workers. This has led to higher wages, which in turn has increased spending and contributed to rising inflation.
According to BLS data, while private industry wages and compensation rose 5.7% nationally for workers from June 2021 to June 2022, when adjusted for inflation they were actually down 3.1%.
However, those numbers could grow in the near future as the Federal Reserve, the country’s central banking system, continues to address high inflation. Experts believe the reserve could continue raising interest rates and trigger a recession, resulting in more workers losing their jobs.
“Anytime the unemployment rate goes up, that’s obviously an economic hardship for that individual and their family. And, in particular, the timing of this could be very challenging if unemployment starts to go up before inflation comes down,” Ehresman said.
The BLS also calculates national and statewide labor force participation rates. This rate tracks people entering and exiting the available pool of workers and can be affected by factors such as illness, old age and childcare.
Nationally, labor force participation increased less than half a percentage point from July to August, and is still down about 1% since February 2020.
In Kentucky, it remained stable from June to July at 58.1% and is down half a percentage point since February 2020. Both before the pandemic and now, the commonwealth has one of the lowest labor force participation rates in the country.