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The overall US unemployment rate fell in June, but a negative trend may be emerging among black workers, according to the latest Nonfarm Payrolls report.
Overall, the jobless rate last month was 3.6%, down 0.1 percentage point from May, the US Labor Department reported on Friday. However, the unemployment rate for black workers in June rose to 6% from 5.6% in May, marking the second straight monthly increase.
Within this demographic, female unemployment rose to 5.4% in June from 5.3% in the previous month. Meanwhile, among men, it rose to 5.9% in June from 5.6% in May. The labor force participation rate for black men fell slightly, while that for women fell from 63.9% to 62.9%.
Economists need to keep an eye on the next round of payroll data to see if a trend is developing.
“Sometimes we’re cautious when we say that a one-month change is very significant because the data is sometimes noisy, but the rule of thumb is three numbers is a trend,” said Carmen Sanchez Cumming, a research fellow at the Washington Center for Equitable Growth . “If the employment level of black workers has fallen quite significantly over the past three months, that’s a red flag.”
Cumming attributed the rise in unemployment among black workers to the weakening of economic mechanisms. As the economy recovered from the pandemic, companies made big strides to regain lost positions. For example, employers raised wages to hire more workers. With the labor market now at its pre-pandemic capacity, companies are less likely to continue adding jobs at the same pace.
In addition, the job market may finally react to the Federal Reserve’s rate hikes, she added.
Meanwhile, Latin American workers also saw the unemployment rate rise, from 4% in May to 4.3% in June. However, the group’s labor force participation increased slightly, rising to 67.3% from 66.9% in the previous month.
The unemployment rate for Hispanic males was 3.8% in June, down 0.2 percentage point from May, while labor force participation remained almost flat. Among Hispanic women, the unemployment rate rose to 4.1% in June from 3.4% in May, with labor force participation about the same as the previous month.
“Things are a bit bleaker for Latino workers as their unemployment rate rose this month but fell last month,” Cumming said. “Overall, their employment levels are still increasing. So the picture there is less clear.”
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