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.
Initial claims for unemployment insurance for the week ending March 20: 8,606
Initial claims for Pandemic Unemployment Assistance for the week ending March 20: 12,352
Claims for Pandemic Emergency Unemployment Compensation for the week ending March 6: 36,602
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, as well as the extra $300 per week benefit known as Pandemic Unemployment Compensation will expire September 5 in Kentucky 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.
Supplemental Nutrition Assistance Program (SNAP)
Total SNAP participation in March 2021: 622,782
Percent of Kentucky participating in SNAP March 2021: 13.9%
Value of groceries purchased with SNAP March 2021: $130.8 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 ($26,500 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.
Because of the COVID-19 pandemic, all SNAP participants receive the maximum benefit per-person. And through the December federal relief bill and the American Rescue Plan, SNAP participants will also receive a 15% increase in benefits through September 2021.
Employment in Kentucky
Total estimated Kentucky employment February 2021: 1,856,600
Percent change in Kentucky employment from last month: 0.2%
Many public-facing businesses were ordered to close during the early months of the pandemic 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 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 restricting capacity and in-person work are lifted, and cases of COVID-19 subside.
Monthly General Fund Revenues
Total General Fund revenue March 2021: $954,845,669
Percent change in tax revenue year-over-year March 2021: +9.0%
The impact of COVID on state coffers has been mitigated by significant federal aid passed in March and December of 2020, without which, Kentucky’s General Fund revenue would have collapsed, making it harder to invest in vital services for Kentucky communities. Programs like the extra $600 in unemployment benefits (now $300 per week), two rounds of stimulus checks and the Paycheck Protection Program helped prop up revenues through 2020. Without continued federal assistance, Kentucky would 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. In 2021, additional, substantial aid through the American Rescue Plan will provide substantial help to Kentucky to finish out the fight against the pandemic and on the path toward a strong recovery.
The graph below tracks monthly General Fund revenues compared to the same month the previous year.