Social distancing policies and practices are protecting lives in Kentucky. In the short term, that means record job losses and the threat of increasing hardship as people struggle to make ends meet. Once the pandemic is behind us, the economy may still underperform if the policy response between now and then isn’t strong enough.
This tracker brings together some of the most important state-level indicators of how Kentucky’s economy is faring. It will be updated as new data are released.
Unemployment Insurance
Initial claims for unemployment insurance for the week ending January 9: 11,219
Initial claims for Pandemic Unemployment Assistance for the week ending January 9: 10,881
Continued claims for Pandemic Emergency Unemployment Compensation for the week ending December 26: 30,989
New unemployment insurance (UI) claims are close to a real-time indicator of how many Kentuckians are losing hours and employment because of the COVID-19 pandemic. Continued claims are a good indicator for how protracted joblessness is, as individuals ask for additional weeks of benefits. But the state only provides 26 weeks of regular UI benefits, and many have exhausted those benefits and are becoming eligible for additional weeks through the federally-funded Pandemic Emergency Unemployment Compensation program. Also, many workers who do not qualify for regular state unemployment insurance do qualify for “Pandemic Unemployment Assistance” (PUA). Both PEUC and PUA will expire March 14 without further action by congress.
The most recent week represents “advance claims” rather than initial claims, and is revised the following week with actual initial claims.
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Supplemental Nutrition Assistance Program (SNAP)
Total SNAP participation in December 2020: 628,470
Percent of Kentucky participating in SNAP December 2020: 14.1%
Groceries purchased with SNAP December 2020: $115.2 million
Like unemployment insurance, SNAP responds quickly to changes in the economy, and so it is also an early indicator for how Kentuckians are faring. Because it is targeted to people with net incomes below the poverty line ($26,200 for a family of four), it is particularly helpful for knowing how Kentuckians with low incomes are faring. SNAP is a strong tool for reducing food insecurity and improving health, but also for dampening economic harm during downturns.
Employment in Kentucky
Total estimated Kentucky employment November 2020: 1,839,500
Percent change in Kentucky employment from last month: 0.1%
Many public-facing businesses were ordered to close during the state of emergency in an effort to slow the spread of COVID-19, and many other businesses have laid off and furloughed workers due to decreased demand. Changes in total employment will help reflect the ongoing crisis in the labor market — and will show when Kentuckians eventually begin going back to work.
The following chart tracks the monthly change in nonfarm employment in Kentucky from the Current Employment Statistics State and Metro Area Employment estimates. Because many are staying home rather than searching for a job, the unemployment rate is not yet a good indicator of the health of the economy but will be useful later when orders to close are gradually lifted and businesses begin hiring back their workforce.
Monthly General Fund Revenues
Total General Fund revenue December 2020: $1,258,755,431
Percent change in tax revenue year-over-year November 2020: +16.1%
Though the impact of COVID on state coffers is just beginning to be felt, as federal aid is exhausted or expires, Kentucky’s General Fund revenue will fall, making it harder to invest in vital services for Kentucky communities. A smaller workforce and less demand will especially impact the individual income tax and the sales and use tax — the two largest sources of revenue for the state. Although the extra $600 in unemployment benefits helped prop up revenues in June and July, those benefits have now expired and additional federal unemployment programs are set to expire December 26. Without significant federal assistance, Kentucky will face an unprecedented shortfall, leading to widespread public layoffs and significant harm to the public institutions that educate, protect, and care for Kentuckians and strengthen communities across the commonwealth.
The graph below tracks monthly General Fund revenues compared to the same month the previous year.
