Kentucky unemployment rate trends and analysis

Macro

Unemployment rates throughout the United States vary depending on the region and the types of industries that conduct business in a particular region. Unemployment rates have a significant effect upon regional economics and the national economy. The purpose of this discussion is to investigate the unemployment rate in Kentucky and to discuss the impact of unemployment on the economy.

Kentucky Unemployment Rate

In recent months the Kentucky unemployment rate has fallen. According to "Kentucky unemployment dropped in August" the Kentucky jobless rate dropped in the month of August when compared to July. The article explains that more than 50% of industry sectors gained jobs ("Kentucky unemployment dropped in August"). In addition the seasonally adjusted jobless rate declined to 5.8% from 6.3% for the prior month ("Kentucky unemployment dropped in August"). However this rate is still higher than the national average of 4.7%.

The article also reports that the manufacturing sector realized the greatest addition of jobs from July to August with 5300 jobs added ("Kentucky unemployment dropped in August"). In addition, the public sector added 3,000 jobs in the month of August ("Kentucky unemployment dropped in August"). The sectors with the fewest jobs added in the month of August were the information sector where rates were unchanged and the education, health and construction sectors had fewer jobs ("Kentucky unemployment dropped in August").

Another article reports that unemployment rates decreased in 75 counties in Kentucky in the year between August 2005 and August of 2006 (Cracraft). In addition unemployment rates increased in 37 counties and remained constant in eight counties (Cracraft). In addition in August of this year, two counties had an unemployment rate equal to or above 10% compared to three counties that recorded 10% or higher in August of last year (Cracraft).

Impact of unemployment on the economy

The Unemployment rate has a serious impact upon the nation in ways that are social and economic. For the purpose of this discussion we will explain the economic impact of unemployment rates. One of the main impacts of unemployment on the economy is that it inhibits people's ability to pay for necessities and luxury items and in doing so consumer confidence is diminished ("Unemployment"). In addition when people are unable to purchase their basic necessities they begin to utilize welfare programs which can be associated with a whole host of economic and social issues when people are unemployed for a significant amount of time and become dependent on the system ("Unemployment").

As such low unemployment rates are encouraged because they have the opposite effect on the economy.