Unemployment for Black Americans is at its worst level since the pandemic, with some economists seeing the latest results as a sign of worse things to come for the US economy.
The unemployment rate for Black Americans hit 7.5% in August, according to seasonally adjusted data released Friday by the Bureau of Labor Statistics, its highest since October 2021 — more than double the rate seen for white workers. Some possible reasons include federal job cuts and tariff-fueled economic uncertainty.
Meanwhile, the unemployment rate for Black men, at 7.1%, was slightly higher than the 6.7% unemployment rate seen for Black women in August, though Black women have seen bigger employment losses since the first quarter of this year. (Black teens of both sexes, ages 16-19, had an unemployment rate of 24.8%.)
That’s not a great thing for the country’s economic well-being.
“What we find typically is that the unemployment rates that you see for the young, for Blacks — and particularly Black males — are a telltale sign of the direction of the economy and what we can expect to see hit overall in a few months,” said Gary Hoover, an economist at Tulane University.
Gbenga Ajilore, chief economist at the left-leaning Center on Budget and Policy Priorities, similarly sees Black unemployment as a “canary in the coal mine.” He added, “If it’s steadily starting to go up, that portends that the economy might be heading toward a downturn.”
Tough market
The country’s broader unemployment rate had been hovering between 4% and 4.2% since May 2024, only to crack out of that narrow band and hit 4.3% in August’s bruising jobs report, which showed the US economy added just 22,000 jobs that month. That was far below the 75,000 positions economists had anticipated.
Revised numbers also showed the economy shed 13,000 jobs in June, the first net job loss since 2020. Downward revisions to jobs numbers included in July’s job report, which also showed fewer than expected monthly gains, led President Trump to fire former BLS Commissioner Erika McEntarfer.
Other signals of a tough labor market abound. The unemployment rate for workers above the age of 25 with a bachelor’s degree, for instance, is also at its highest since the pandemic, and there were more jobless Americans than available positions in July for the first time since April 2021. Since Black workers are often seen as the “last hired, first fired,” tight labor conditions may impact them in particular, Ajilore said.
Some of the job losses for Black workers can also be explained by sector-specific trends. For example, Black workers made up nearly 19% of the federal workforce, which has been significantly reduced since President Trump took office. The federal government is down 97,000 jobs since January, according to the Labor Department.
Additionally, more than a quarter of Black men worked in logistics — described as “production, transportation, and material moving occupations” by the Bureau of Labor Statistics — in 2024, noted Joseph Dean, a research economist at the National Community Reinvestment Coalition, a nonprofit group, with 18.9% being in transit specifically.
The unemployment rate for transportation workers has ticked slightly higher in recent months, though payrolls for transit and warehousing have also increased in the past year. Tariffs may be having an impact on Black employment, especially since manufacturing jobs are also being hit hard.
“Across the board, you’re seeing industries that employ large amounts of Black people either stagnant or in decline,” Dean said.
History repeats
Black workers have historically faced higher unemployment rates than other racial groups due to structural inequities in the labor market. Their unemployment rates rose past 16% in 2010, in the aftermath of the Great Recession, and took years to recover to a record low of 5.3% in 2019. Black unemployment surged yet again during the pandemic, before dropping to a record low of 4.8% in April of 2023. (Even when the Black unemployment rate was at its best, it was “still nearly twice that of whites,” Hoover said.)
But the recovery from the pandemic was uniquely fast, Valerie Wilson, a labor economist and the director of the program on race, ethnicity, and the economy at the left-leaning Economic Policy Institute, said. There was also a robust policy response at the time to address Americans who were struggling and out of work.
This time, the circumstances feel more uncertain.
“It’s difficult to predict whether we can recover quickly,” Wilson said. “That will depend on how quickly Congress moves to counteract the recession.”
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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