The number of people in Kentucky’s labor force dropped by 11,326 during the first two months of 2026, according to the Kentucky Center for Statistics.
The report shows the state’s labor force stood at 2,108,665 in February, a decrease of 5,874 from January.
Earlier data indicated the labor force was 2,114,515 in January, down 5,476 from December.
Despite the decline, the statewide unemployment rate slightly improved, falling from 4.4% in December to 4.2% in February. Officials say this is partly because the overall labor force is shrinking, meaning fewer people are actively seeking jobs.
Mike Clark, director of the University of Kentucky’s Center for Business and Economic Research, said the drop could reflect a more challenging job market.
“They’re available to work, and would take a job if offered, but they may view the economic situation such that it’s hard to find a job right now, or employers are not hiring, so they are choosing not to work, and basically they are sitting out of the labor force,” Clark said.
Clark also pointed to losses in the manufacturing sector, which saw 600 jobs cut from January to February and 2,100 jobs lost compared to last February.
“As we came out of the pandemic, we actually did really well in terms of manufacturing jobs in Kentucky,” Clark said. “We saw Kentucky really growing manufacturing jobs faster than the rest of the nation, so that really helped in terms of our recovery, but we really seem to have turned a corner, particularly in terms of durable goods manufacturing.”
Meanwhile, the health services and education sector continues to grow, adding 1,300 jobs since January and 4,100 jobs since last February.
“We’re actually seeing some growth nationally, and we’re seeing growth in Kentucky as well,” Clark said. “But if you look at over the last couple of years how Kentucky has been growing in that sector relative to the US, while we’ve been growing, we haven’t really been keeping pace with the US growth.”
Clark noted that small changes in labor force data can be normal month-to-month fluctuations. However, if the decline continues, it could signal a broader trend.
“One of the things that we always have to watch out for is (if) there’s noise in the data,” Clark said. “And so, we get revisions. We often see a month that maybe will change, and one month of change really isn’t indicating a trend.”
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