An important warning sign for the economy is flashing

"How it works: The Black unemployment rate has long been higher than the jobless rate overall - but the gap narrows when the labor market is strong, as it was in 2019 right before the pandemic and during the strong job market of 2022 and 2023. When the labor market weakens, some research shows that Black workers face higher unemployment rates. "When the economy takes a downturn, it hits Black Americans first," says Chris Martin, lead researcher on jobs site Glassdoor's economic research team."

"By the numbers: The Black unemployment rate was 7.5% in August - a rate that would be viewed as catastrophic if it were the overall jobless number. It is up more than a point from the beginning of the year. That's compared with an overall unemployment rate of 4.3%, up slightly from 4% in January. The white unemployment rate (3.7%) is also up just 0.2 points over that period."

"Still, the most recent jobs report showed that job growth overall has slowed considerable over the past few months. "It seems fairly clear thatdeclines in Black employment are likely connected to a broader slowdown," says Jessica Fulton, vice president of policy at the Joint Center for Political and Economic Studies, which advocates for policies that improve outcomes for people of color."

Black unemployment has long exceeded overall and white jobless rates, with the gap narrowing only during very strong labor markets such as 2019, 2022, and 2023. When the labor market weakens, Black workers face disproportionately higher unemployment, and downturns tend to hit Black Americans first. The Black unemployment rate reached 7.5% in August, up over a point since January, compared with an overall rate of 4.3% and a white rate of 3.7%. Recent job growth has slowed, likely contributing to declines in Black employment. Structural factors include federal layoffs that disproportionately impacted Black people, corporate pullbacks on hiring people of color, and the disbanding of DEI teams. Beginning in 2020, the Federal Reserve adopted an explicitly inclusive approach to maximum employment, which implied greater attention to Black unemployment.

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