State of the Economy

The Kentucky Chamber’s Economic Dashboard provides timely updates on economic conditions in Kentucky and across the United States. It tracks key indicators, including employment, workforce participation, hiring, inflation, consumer sentiment, and small business optimism, to help business leaders and policymakers understand current trends.

• Jobs: Job growth in Kentucky was negative for much of last year, according to newly revised data, while growth in the U.S. cooled considerably. 2026, so far, has been a mixed bag for jobs, with only limited data available at the state level. 
• Slow-hire, Slow-fire: Firms continue to appear less willing to hire, but also reluctant to make any major changes. Some call this a slow-hire, slow-fire job market.
• Inflation: The Federal Reserve’s preferred measure of inflation continues to trend above its target of 2%, while other measures of inflation indicate further price increases for consumers as uncertainty looms over the conflict in the Middle East. 
• Energy Prices: Conflict in the Middle East has caused oil, diesel, and gasoline prices to spike, with gasoline prices in Kentucky 40% higher than they were one year ago and diesel prices 60% higher. 
• Consumer Sentiment: April marked a new all-time low for consumer sentiment, breaking a record set last November, based on preliminary survey data. 

Notes: This information is meant to provide a monthly check-in on the most recent economic data in Kentucky and the U.S. It is not comprehensive. For additional information on Kentucky’s economy, we recommend resources like Blueprint Kentucky’s annual report on Kentucky’s Rural Economy and the UK’s Annual Economic Report.

Here are more details on the state of the economy as of April 21, 2026.

Job growth slowed in the U.S. last year and was negative in KY for most of 2025
 

• Kentucky lost jobs last year: Kentucky ended 2025 with 5,700 fewer jobs compared to the same time in 2024, according to benchmark revisions released by the Bureau of Labor Statistics in April.
• Negative or flat growth in most months: In 2025, growth in 10 out of 12 months was either negative or flat for Kentucky. January 2026, however, saw a welcome uptick.
• National job growth slowed in 2025: The national picture for jobs was marginally better than in Kentucky, with the U.S. adding 181,000 jobs last year. But job growth cooled consistently throughout 2025.
• A mixed start to 2026: The first three months of 2026 have been mixed. The US added 160,000 jobs in January, with the health care sector accounting for most of that growth; lost 133,000 in February; and gained 178,000 in March.
• How we look at jobs: The chart above displays job growth by showing the 12-month change in jobs as a percentage, which allows for more direct comparisons between Kentucky and the U.S. and removes the seasonality of month-to-month changes.

The “slow-hire/slow-fire” job market continues
 

• Slow hire: Hiring in both Kentucky and the U.S. has deteriorated slowly. While the hiring rate in Kentucky was higher throughout much of 2025, it began falling in May 2025. 
• Slow fire: Layoffs and discharges held steady before increasing slightly with more recent months’ estimates. Firms appear less willing to hire, but also reluctant to make any major changes. Some call this a slow-hire/slow-fire job market. 
• Layoffs in the news: Media stories of mass layoff announcements usually provoke more concern than is warranted. BLS data suggest there are around 1.7 million layoffs and discharges every month in the US. That said, recent preliminary estimates show a small increase in layoffs.
• Slow quit too: Quits have been low, suggesting workers aren’t finding (or expecting to find) better jobs than what they have.

The Federal Reserve’s preferred inflation measure remains elevated
 

• Core PCE & the Fed: Core Personal Consumption Expenditures (PCE)—which excludes food and energy—is the Federal Reserve’s preferred inflation metric. The Fed targets 2% inflation, which the US has not seen since 2021. Food and energy are excluded because they tend to be more volatile.
• Current rates: Between February 2024 and February 2026, rates have hovered between 2.6% and 3.2%. The increase in inflation shown since April 2025 is consistent with the effects of tariffs; however, those effects were very likely blunted by the anticipatory increase in imports earlier in the year.
• Iran's impact on inflation: The spike in energy prices due to the war in the Middle East will be felt by consumers and businesses more quickly than they show up in core PCE, which excludes food and energy prices. Other inflation measures are already picking up these impacts. Read more about this below.

Other inflation measures reveal the early impacts of war in the Middle East

 

• Early indicators: The impacts of rising energy prices are beginning to appear in other measurements of inflation. The headline Consumer Price Index, or CPI, for example, ticked up to 3.3% in March 2026. Headline CPI includes food and energy and is a simpler inflation measure than PCE, meaning that it is produced with a smaller lag. Another measure, called the Producer Price Index – Final Demand, which shows what businesses are charging consumers for goods and services, also increased in March.
• What to expect: A measure of what businesses are paying for goods suggests that consumers may expect higher prices in the coming months. As seen on the chart above, the Producer Price Index – Intermediate Demand surged in March. This measure reflects the prices that businesses are paying for goods they purchase as inputs before selling to consumers.

Energy prices rose sharply after the conflict with Iran began
 

• Indexing energy prices: This chart indexes prices for diesel, gasoline, West Texas Intermediate Crude oil (the standard benchmark for U.S. produced oil prices), and the international traded Brent Crude oil (the standard global benchmark) to February 23, 2026, just before the conflict with Iran started. 
• Oil prices: Both West Texas Intermediate Crude (WTI) and Brent Crude oil prices surged following the start of the conflict. In the first week of the conflict, WTI rose over 40% and Brent Crude rose over 30%. The announced ceasefire on April 7 did result in a decrease in prices for crude oil and diesel, but not for gasoline.
• Gasoline and diesel prices: According to the AAA website, the national average price for gasoline was $4.022 per gallon on April 21, 2026. The average price for Kentucky was $3.862, a 40% increase since the same time last year. The national average for diesel was $5.511, while it was $5.180 in Kentucky (a 60.3% increase over the same time last month).  
• Impacts: Diesel prices will have greater impacts on costs to businesses due to how they influence shipping expenses, while gasoline prices will disproportionately affect everyday households. 

Consumer sentiment reached a new all-time low this month.
 

• Consumer Sentiment: The University of Michigan produces an index of consumer sentiment and updates it monthly.
• All-time low last November: The November 2025 reading of 51.0 was an all-time low on the index. 
• A new all-time low in April: The preliminary estimate for April, 47.6, is 9% lower than a year ago, and almost 16% lower than it was in February before the conflict in the Middle East began. However, most of the interviews for the survey were completed before the April 7 ceasefire.

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) 
ADP Employment Report
Carlyle
Revelio Labs

The Kentucky Chamber hosted a webinar on June 9, 2025, featuring Vice President of Policy Charles Aull and Erica York, Vice President of Federal Tax Policy at the Tax Foundation, to explore how tariff and tax policies in Washington are shaping the economic landscape for Kentucky businesses.

Watch the webinar below:

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