2017 / 2018 KENTUCKY ECONOMY
- Employment continued to improve within the United States during 2017. The United States ended 2017 with the official unemployment rate (U-3 rate measurement) at 4.1% in December 2017 (seasonally adjusted; 4.7% in December 2016), and the alternative U-6 measurement (incorporates those marginally attached to the workforce) of 8.1% (9.2% in December 2016). https://www.bls.gov/news.release/empsit.t15.htm
- Kentucky's Unemployment Rate has also continued to improve. Kentucky's unemployment rate has ranged from 5.3% in December 2014, 5.2% to 5.3% during 2015, the low in 2016 was 4.8%. The preliminary estimate for Kentucky as of December 2017 is 4.5%. Alternative measures of labor underutilization by state, fourth quarter of 2016 through third quarter of 2017 averages, indicates Kentucky's U3 unemployment rate was 5.3%, and the U6 unemployment rate was 9.4%. At November 2017, rates ranged from a low of 2.7% in Woodford County to a high of 12.7% in Magoffin County. Lexington / Fayette County experienced a low unemployment rate of 3.0% in Nov. / Dec. 2016 (3.2% at November 2017), and Louisville / Jefferson County experienced a low of 3.8% also in November 2016 (3.5% at November 2017). https://www.bls.gov/eag/eag.ky.htm
- During 2017, Kentucky saw a steady improvement in the total number of persons employed, especially toward the end of the year. During the 2017 year, the number of persons employed in Kentucky increased from approximately 1.93 million persons at December 31, 2016 to (preliminary) 1.96 million persons in December 2017. https://www.bls.gov/eag/eag.ky.htm
- Kentucky's labor participation rate remains low.
Nationally, the labor force participation rate, which measures the labor force as a percentage of the civilian non-institutional population, increased by 0.1 percentage point to 62.7% at December 2016. Overall, the rate has ranged between 62.7% and 62.9% 2014 through November 2017, with a recent low of 62.3% in September 2015. The Kentucky Chamber of Commerce indicates in 2016, Kentucky's average labor participation rate was 57.6%, well below the national average, and the 4th lowest among the 50 states (just over half the states were above the national average). Kentucky's labor participation rate has been on a declining trend since 2009. https://www.kychamber.com/sites/default/files/Workforce%20Participation%20Report%20-%20May%202017.pdf
Preliminary information indicates the labor participation rate in Kentucky has improved to 59.2% at December 2017 (which was actually a decrease from 59.8% at June 2017) https://www.bls.gov/web/laus/lalfprderr.xlsx
- Total non-farm employment amounted to approximately 1.96 million persons in Kentucky at December 2017. The amount represent 56.4% of the civilian non-institutional population, and 95.5% of the civilian labor force (2.054 million persons). For the year, the largest increase in employment was in Other Services, which has seen a 6.2% increase in the past 12 months, followed by the construction sector where the total number of those employed has increased by 5.8%, and then information technology saw a 3.0% increase in employment. The Mining and Logging category saw the greatest decline in employment in 2017 thus far, decreasing by 7.0% over the past 12 months. https://www.bls.gov/eag/eag.ky.htm
- The Kentucky Center for Economic Policy (KCEP), The State of Working Kentucky - 2016, (Baumann, Ann, and Baily, Jason; August 2016) indicate job growth in Kentucky since the Economic Recession has been uneven and weak. "Kentucky's population has grown at a faster rate than jobs: 5.1 percent compared to 2.6 percent since December 2007", thus there is a slight deficit. "Large swaths of the state still have fewer jobs than before the recession. Growth has not been evenly distributed across the Commonwealth, but largely concentrated in the "Golden Triangle" region bound by Jefferson, Fayette and northern Kentucky counties." Kentucky continues to transition from a goods producing economy to a service providing economy. Nationally, job growth totaled 2.2 new million positions in 2016, less than the increase of 2.7 million new positions in 2015. http://kypolicy.org/dash/wp-content/uploads/2016/08/State-of-Working-KY-FINAL.pdf
- The U.S. Department of Labor, Bureau of Labor Statistics, indicates unemployment rate for young people between the ages of 20 through 24 improved during 2017, decreasing from 8.0% at December 2016 to 7.1% at December 2017. Women in that age group had a lower rate during the year compared to men of the same age: the women's unemployment rate was 6.8% at December 2016, and then ended 2017 at 6.2%. Men saw substantial improvement, the 20 to 24 men's age group unemployment rate decreased from 9.2% at December 2016 to 7.9% at December 2017. National data: https://www.bls.gov/web/empsit/cpseea10.htm
- One of the characteristics of the post-recession rebound has been the slow growth in wages. In December 2016, national average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents to $26.00, after edging down by 2 cents in November. Over the year, average hourly earnings have risen by 2.9%. In December 2016, average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $21.80. The U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics, indicates the Kentucky, 2nd quarter 2016, Average Weekly Wage was $838, which was a 1.9% ($16) improvement over the same comparative period of the previous year. http://beta.bls.gov/maps/cew/us
- U.S. GDP growth has been sluggish in 2016 until improving in the 2nd Quarter 2017. Nationally, the Real Gross Domestic Product increased at an annual rate of 1.6% in 2016 compared to real GDP increases of 2.6% in 2015 and 2.4% in 2014. The Bureau of Economic Analysis (BEA) indicates the estimate for the 3rd Quarter 2017 is an annualized 3.3%, after a 2nd Quarter 2017 3.1% GDP growth, after 1.2% growth during the 1st Quarter 2017. https://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
Kentucky Agricultural Income
- The U.S. Department of Agriculture, National Agricultural Statistics Service (NASS), Crop Production 2017 Summary (January 2018), indicates Kentucky had a record corn yield of 178 bushels per acre in 2017, while the preliminary estimate of total corn harvested was down slightly to 217.2 million bushels compared to 222.6 million in 2016, and 225.3 million in 2015. Kentucky also had a record 102.8 million bushels of soybeans harvested in 2017 compared to 89 million in 2016 and 88.7 million bushels in 2015. The state saw an increase in acreage in soybean planted to 1.95 million acres in 2017 compared to 1.79 million in 2016. The 2017 soybean yield was a record 53 bushels per acre compared to 50 bushels per acre in 2016. https://release.nass.usda.gov/reports/cropan18.pdf
- The University of Kentucky College of Agriculture, Food and Environment, 2016 - 2017 Kentucky Agricultural Economic Situation and Outlook (Burdine, K., et al) "is projecting that Kentucky ag sales will fall to $5.4 billion in 2016, off 7% from 2015 and 17% from our 2014 " due to a decline in commodity prices after strong annual harvests in the previous two years and growing supplies. "Most of the decline in Kentucky ag sales for 2016 can be attributed to rapidly falling cattle receipts which fell by more than 30% in response to mounting beef, poultry, and pork supplies." The $6,495,031 in agricultural cash receipts earned in 2014 was a record for the state. http://www.uky.edu/Ag/AgEcon/pubs/extoutlook161758.pdf
Kentucky Exports, Jobs, & Foreign Investment
- Kentucky's export shipments of merchandise in 2016 totaled a record $29.2 billion ($27.6 billion in 2015). The state's largest market was Canada. Kentucky posted merchandise exports of $7.5 billion to Canada in 2016 ($7.3 billion in 2015), representing 25.6% of the state's total merchandise exports. Canada was followed by the United Kingdom ($2.84 billion), France ($2.83 billion), Mexico ($2.24 billion), and Brazil ($2.04 billion). The state's largest merchandise export category is Aerospace Equipment, which accounted for $10.8 billion of Kentucky's total merchandise exports in 2016.
Kentucky Coal Production & Employment
- In 2017, coal-related production experienced a slight decrease and employment experienced a slight increase. In January 2018, the Commonwealth of Kentucky, Energy and Environment Cabinet released preliminary data which indicates Kentucky coal mines produced 42.1 million tons of coal in 2017, a slight decrease from the 42.6 million tons of coal produced in 2016 (milder compared to the decrease of 30.7% when 2016 is compared to 2015 61.4 million tons), and a continuation of the lowest level since 1939. The decline occurred at underground mines (a decrease of 3.4% to 31.6 million tons compared to 32.7 million tons in 2016) but surface mines experienced a slight increase of 4.2% 10 10.5 million tons in 2017 after a decrease of 45.3% to 9.9 million tons in 2016. The previous year's data indicates in 2016 Kentucky slipped from the third largest coal producing state to the fourth largest.
- There were an estimated 6,503 persons employed at coal mines within Kentucky at December 31, 2017, a slight improvement compared to 6,371 persons still employed at coal mines within Kentucky as of December 31, 2016 but still lower when compared to 8,401 persons employed at coal mines within Kentucky as of December 31, 2015. Total coal mine-related employment in Kentucky in 2017 could at best be described as stable after it decreased by 2,030 employees in 2016, a decrease of 24.2% (and a decrease of 27.7% / 3,218 employees during 2015). Eastern Kentucky coal mine-related employment increased during the 2017 year, and Western Kentucky coal mine-related employment decreased during the year.
|Average Annual Employment||17,670||17,812||17,115||18,069||15,622||12,550||11,508||9,493||6,580||6,589|
|Tons of Coal Produced||121,212,504||108,263,968||105,554,104||109,018,240||91,358,160||80,359,000||77,468,336||61,424,920||42,773,250||42,082,668|
Kentucky Metropolitan Unemployment Rates
- The Bowling Green Metropolitan Statistical Area (MSA) not seasonally adjusted unemployment rate as of December 2017 is 3.1% (3.6% in December 2016).
- The Elizabethtown-Fort Knox Metropolitan Statistical Area (MSA) not seasonally adjusted unemployment rate as of December 2017 is 3.5% (4.3% in December 2016).
- The Lexington-Fayette Metropolitan Statistical Area (MSA) not seasonally adjusted unemployment rate as of December 2017 is 2.9% (3.3% in December 2016)
- The Louisville-Jefferson County Metropolitan Statistical Area (MSA) not seasonally adjusted unemployment rate as of December 2017 3.2% (3.8% in December 2016).
- The Owensboro Metropolitan Statistical Area (MSA) not seasonally adjusted unemployment rate as of December 2017 is 4.0% (4.3% in December 2016).
Kentucky Residential Housing
- Similar to the rest of the United States, residential property values within Kentucky have rebounded since the economic recession. In January 2018, the Kentucky Association of Realtors (KAR) indicated that for the year ended December 31, 2017, the Kentucky residential real estate market continues to experience strong growth since the decline in activity and prices incurred during the U.S. Economic Recession. The KAR indicates the total number of home sales (single-family, townhouse and condominium) were the highest ever recorded in the state at 53,058 properties, a 1.8% increase over the 52,123 properties sold in 2016. In addition, the median home price of $128,589 for the year was the highest annual median price recorded in the state, exceeding the record of $122,166 for 2016 by 5.3%. Total volume of all homes sold in Kentucky broke the $9 billion mark for the second time with $9.83 billion in sales. This surpasses the $9.17 billion sold in 2016 by 7.1%. Days on market (DOM), an indicator of housing demand, decreased 5.7% to 131.9 days in 2016 compared 139.5 days in 2015. As of June 30, 2017, the KAR indicates the year-to-date average residential price has increased to $180,924, and the median price is $123,601, days on the market had decreased to 117.6 days, and the housing inventory had increased to 4.43 months, which is seen as a positive development. (Source: KAR).
|Date||No. of sales||Median Price||Average Price||Total Sales||Days On Market|