Kentucky's annual unemployment rate for 2025 was 4.6%, according to the Kentucky Center for Statistics, an agency of the Kentucky Education and Labor Cabinet. The rate exceeded the national average of 4.3%, placing Kentucky among the states with higher joblessness.

Kentucky's unemployment rate for 2025 was higher than 39 states, lower than eight states and equal to two states. Kentucky, along with Illinois and Ohio, had the highest unemployment rate among its surrounding states. California reported the highest rate nationally at 5.5%, while South Dakota had the lowest at 2.1%.

An estimated 2,018,309 Kentuckians were employed in 2025, while 97,280 were unemployed, out of a civilian labor force of approximately 2.1 million.

The Kentucky economy showed signs of weakness throughout the year. Kentucky's nonfarm annual average payroll employment decreased by 3,400 or 0.2% to 2,033,100 jobs, according to federal survey data. "The business survey suggests that the labor market weakened during 2025," said University of Kentucky's Center for Business and Economic Research Director Mike Clark.

Kentucky's manufacturing sector contracted by 5,200 jobs or 2% in 2025, with particularly steep losses in durable goods manufacturing. The private educational and health services sector expanded by 5,000 jobs in 2025, providing some offset to broader employment declines across the state.

Statewide averages for 2025 are based on 11 months of data due to a lapse in federal appropriations that prevented October 2025 data collection, making comparisons to prior annual averages not strictly comparable.