The recent spike in Black unemployment is worrisome. It may be part of a larger trend in society to return to historical levels of job discrimination under the Trump administration. We are watching closely with our third eye open.
The Bureau of Labor Statistics reported an increase in the Black unemployment rate to 6.8% in June. The rate shot up from 6.0% in May: a 13% increase. The BLS reported the change as an increase, which is a departure from the “largely unchanged” category, meaning it was statistically significant without directly saying so.
The number of unemployed Black people increased by 179,000 from 1.4 million unemployed to 1.51 million. An increase of 13.4%. There was a huge jump in Black teenage unemployment of 47,000 kids.
The change was driven by a decrease in Black employment for both men and women of -193,000 jobs. Black men lost 117K (K=1,000) jobs while Black women lost 84K jobs.
For other groups, unemployment decreased: White(-0.2%), Hispanic(-0.3%), and Asian(-0.1%) and was reported as: “largely unchanged” in BLS-speak.
Yes, Black unemployment was 15.0% during COVID but then fell to record lows (4.9%) during the recovery. Please look at the recent uptick.
There is something wrong with the labor market
Clearly there is something wrong when the Black unemployment is going up while every other ethnic group’s unemployment is going down. We understand employment is driven by demand in different sectors, industries, and skills, but a 13% jump matters. It looks like we are returning to the “2X” days when the Black unemployment rate was twice that of Whites.
Black people tend to work in retail, education, healthcare, government, management jobs, and transportation and logistics.
The BLS uses a rolling sample of about 60,000 individuals which means about 10% are Black. In the past they have said the margin of error is 100,000 jobs.
Conclusion
First, while the data is troublesome, but one set of data does not make a trend. The BLS restates data and changes population controls yearly, and there is some variability in the employment reports. BLS employment reports are always revised later, but the initial data is usually close.
Second, while we may be seeing the effects of DOGE at the federal level, which targeted the Department of Education and DEI program, there is a larger private sector slow down. Black workers make up 18% of the Federal workforce.
Finally, it looks like we are slipping back to the 2X days when the Black unemployment rate was twice that of Whites. During COVID-19, it was 1.5X and lower. What scares us the most is that, as the job market tightens, historical patterns of discrimination may kick in with little enforcement of discrimination laws from the new administration.
We are returning to the bad old days of: “Last hired, first fired.” And Black people are going to take the brunt of the slowdown in hiring.