State of the Economy

Stories about instability in financial markets and rising recession predictions are dominating the news cycle as the United States fundamentally rethinks its approach to international trade policy. The impacts of these changes on the economy will take time to surface in economic data. Here are five things to know about the economy as of April 23, 2025. 

Job Growth Remains Steady but Slowed Down Last Year

• Kentucky added 14,300 new jobs between January and March 2025. Growth slowed down in 2024 compared to 2022 and 2023, but remains positive, and we have more jobs than we did before the pandemic.
• The U.S. added 228,000 jobs in March 2025, signaling continued national growth.

Layoffs Appear Low, So Far

• Claims for unemployment insurance benefits in Kentucky increased in early 2025 but remain low by historical standards.
• This suggests layoffs are still relatively limited despite recent upticks.

Unemployment has Risen, and Hiring has Decreased

• Kentucky’s unemployment rate rose in 2024 to above 5% as more adults looked for work but remains below typical levels. The U.S. unemployment rate was just above 4 percent in February 2025.
• At the same time, hiring rates dipped below normal levels as employers added fewer new workers to their headcounts.
• To learn more about why Kentucky’s unemployment rose in 2024, read a Policy Brief written by the Center for Policy and Research in February 2025.

Inflation has Eased but Remains Higher Than What We Want

• U.S. inflation rose 2.5% from February 2024 to February 2025, which is above the Federal Reserve’s 2% target.
• Inflation has eased since 2022’s 7.2% peak but remains a key issue for consumers and businesses.

Consumers and Small Business Owners are Worried About Economic Conditions

• After rising throughout the second half of 2024, consumer sentiment declined in the first quarter of 2025. 
• Similarly, small business optimism rose throughout 2024 but fell in the first quarter of 2025.

On this web page, we provide economic updates on Kentucky and the United States, using a range of key metrics from the U.S. Department of Labor, U.S. Bureau of Economic Analysis, the University of Michigan, the St. Louis Federal Reserve, and the U.S. Chamber of Commerce. All data is analyzed by the Kentucky Chamber Center for Policy and Research. On this page, we cover jobs, unemployment, unemployment insurance claims, hiring, workforce participation, inflation, consumer sentiment, and small business optimism.   

Sources
Federal Reserve Bank of St. Louis, Federal Reserve Economic Data
MetLife and U.S. Chamber of Commerce, Small Business Index
University of Michigan, Survey Research Center, Surveys of Consumers
U.S. Bureau of Economic Analysis, Personal Consumption Expenditures Price Index
U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics
U.S. Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey
U.S. Department of Labor, Employment and Training Administration, Unemployment Insurance Data
U.S. Federal Reserve, Economy at a Glance – Inflation (PCE)