Commerce Lexington

August unemployment figures (released a couple weeks ago) show a continued seasonal decline in the unemployment rate. Lexington dropped from 8.3% to 8.2% and the region from 9.3% to 9.0%. See picture below:

Probably the most interesting parts of the above chart are the July spikes in unemployment returning to normal. Still not entirely sure what they represent, but something happened in Scott County in late summer that I really would like to have some more information on. The funny thing is that despite the spikes from a few counties, overall, unemployment for the region was relatively unaffected overall. This would be due to the 800lb gorilla in the room, Lexington. With just under half of the labor force residing in Fayette County, large changes in Lexington’s unemployment will have a much more pronounced effect on the region than the smaller counties. Here is what that looks like visually for August:

A more comprehensive breakdown for the statistical table geeks like me looks like this:

As you can see, there is a pull between Fayette and Woodford counties and the rest of the region’s counties. Fayette and Woodford are contributing more labor force than unemployed persons, the rest of the counties, the opposite.

Big word of caution here: the program that these statistics come from, the Local Area Unemployment Survey (LAUS), measures unemployment based on residence, not place of work. Many of the unemployed in the surrounding counties could have lost a job in Lexington and vice-versa. I’ll try to dig up some way to flesh that out in a later post.

Time for the monthly unemployment update. Good news in July as Lexington saw their unemployment drop from 8.5% to 8.2%. Our larger Bluegrass Alliance area saw its unemployment drop from an adjusted 9.3% to 9.2%. Unfortunately this is a bad combination for our surrounding counties. When Fayette County’s unemployment drops significantly and the larger area (which includes Lexington) doesn’t drop as swiftly, it means that the other counties are probably experiencing rising unemployment. As you can see from the graphic below, that is exactly the case.

The arrows point to the three counties (Bourbon, Scott, and Woodford) where unemployment rose instead of dropped in July. While the spikes (Woodford and Scott) can be scary, their number of unemployed really didn’t change by more than a few hundred, probably due to manufacturing closures that were announced earlier in the year actually taking affect. We’ll have to keep an eye on these counties and see if the unemployment has continued to grow or leveled off.

June’s unemployment numbers were released last week to the tune of 8.5% in Fayette County and 9.2% in our Bluegrass Alliance region. This compares with 7.7% and 8.6% in May respectively. The trends for all of the areas we monitor are below. You can see that Fayette County is basically following local, state, and national trends. NKY is the one oddball here that refuses to go along with everyone else. I would love to see some analysis on their region’s economy.

The uptick in unemployment can be disconcerting, but as always, it is good to put the changes from month to month in historical and seasonal context. The actual change of .8% from May to June in Fayette County is higher than any other year in this decade, however, the magnitude of the change is still high, but not unheard of, in the past few years.

The volatility of employment in the current economy can be hard to observe some months. Even when an economy seems to be either “out of the woods” or on the upswing, unemployment can be persistent. Unfortunately, the data needed to make really solid assumptions on the underlying problems is rarely available in as timely of a manner as the LAUS (Local Area Unemployment Statistics) numbers are each month. As I’ve said before, we’ll know a great deal more about the most recent recession in a couple of years.

Here is how the unemployment numbers look after the most recent release of April. I took out the “Lexington MSA” line and replaced it with a more representative “Bluegrass Alliance” line. The Bluegrass Alliance includes all the Lexington MSA counties (Bourbon, Clark, Fayette, Jessamine, Scott, and Woodford) and adds both Franklin and Madison counties. The most surprising thing to me is that Northern Kentucky (Boone, Kenton, and Campbell counties) didn’t have the large dip in unemployment that is typical in April. Hopefully this is not indicative of any lingering economic issues.

I’ve looked a little deeper into April’s unemployment numbers. As with every monthly unemployment figure, the context is extremely important. Lexington’s April unemployment rate was 6.9%, a .5% decline from March. However, unemployment typically is at its lowest level of the year in April, so a decline isn’t all that surprising (the reason for April’s low unemployment numbers hopefully will be the subject of another post on another day).

Below, I’ve plotted every decline in the unemployment rate from March to April since 2000. As a side note, every drop of .1% in the unemployment rate equals about 150 jobs for Lexington and 300 jobs for the Bluegrass Alliance.

As you can see, the drop in unemployment is normal for this time of year, although some years it drops more than others. My main takeaway from all of this analysis is that we may be at the start of getting back to our normal employment trends. With the wild swings and record numbers of the past six months, I’ll take normal any day. It is one encouraging sign that things hopefully won’t get any worse.

We still have a solid chunk of unemployed persons in our labor force to help and unemployment can be very persistent. Economic downturns often help companies find the bare minimum number of employees they can get by with on a day to day basis. It will take a marked increase in activity for some of these jobs to be rehired.

Just a quick post to let you know that April’s Unemployment figures were released today. Lexington-Fayette County is still the lowest in the state (tied with Woodford County) at 6.9%. This is down .5% from February and March’s levels of 7.4%.

Our eight-county Bluegrass Alliance is at 7.8%, down from 8.4% in March.

April typically has the lowest unemployment of the year according to seasonal trends, so it is good news that unemployment rates dropped, but not unexpected. I’ll get more in depth on this issue with a longer post tomorrow.

Lexington’s official population count now stands at 282,114. The total population of our 8-county Bluegrass Alliance is 583,460.

The Kentucky State Data Center is providing these estimates as part of the Census Bureau’s Federal-State Cooperative Program for Population Estimates. I also included the 2010 and 2020 projections in the table above. As you can see, in about 10 years, Fayette County is projected to be joined by Madison County in the 6-digit population club. The region is an interesting mix of both slower population growth (Bourbon, Clark, Fayette, Franklin, and Woodford) and explosive growth (Jessamine, Madison, and Scott). Undoubtedly, many border communities are increasing because of Lexington’s limited residential growth potential. It will be interesting to see if this leads to a growth of independent economies in these counties, or if they will continue to mainly feed off of Lexington’s established economic success.