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Payroll employment growth slows in Kentucky, but economist remains upbeat about outlook

While annualized payroll employment growth in Kentucky has slowed since the beginning of 2016, largely as a result of softness in the manufacturing and energy sectors, many regions in Kentucky continue to enjoy strong job growth, according to Gary A. Wagner, vice president and senior regional officer of the Cincinnati Branch of the Federal Reserve Bank of Cleveland.

“In the most recent three-month period for which data are available (July through September 2016), annualized payroll job growth in the Commonwealth was 2.5 percent, well ahead of the 1.6 percent growth experienced by the US during the same time period,” says Wagner.


Although the structural changes in the coal industry continue to create significant hurdles for job seekers in rural and eastern Kentucky communities in particular, Wagner notes that the recent job gains have been fairly broad based across different sectors and metropolitan statistical areas (MSAs).

“Two notable frontrunners for the Commonwealth are the financial services and education and health services sectors, both of which have outpaced the nation in job growth over the past year,” says Wagner.

According to Wagner, the timing of the job gains during the past few years has corresponded closely to the bounce back in consumer spending that began in late 2013 or early 2014.

“Since consumer spending, which accounts for roughly 70 percent of the national economy, remains close to its historical average, and household balance sheets remain healthy in the aggregate, there are reasons to remain upbeat about the near-term outlook in the service side of both the nation’s and the Commonwealth’s economies,” says Wagner.

Read State of the State: Kentucky.

From Cleveland Federal Reserve Communications

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