The Bureau of Labor Statistics’ (BLS) monthly Employment Situation report is an indicator of economic well being and the state of the labor market in particular. It normally comes out the first Friday of every month and provides a deep look at our labor market by race, gender, age, and profession.
Between 1974 and 1994, Black unemployment consistently remained in the double digits, with rates twice as high as those for white Americans. From 1994 to 2017, Black unemployment rates varied between 7% and 10%, occasionally spiking to nearly 17% during recessions. However, since 2018, Black unemployment has reached record lows of 5% and 6%, except during the 18-month recession caused by COVID-19.
In April, the Black unemployment rate was 4.7%. This is the lowest it has been since the Bureau of Labor Statistics (BLS) began tracking this data in 1972. Moreover, progress has been made in closing the gap between Black and white unemployment. After the COVID-19 recession, Black unemployment is no longer double that of white Americans. In April, the Black unemployment rate of 4.7% was only 1.5 times higher than the white unemployment rate of 3.5%.
Continued efforts to bridge this gap and maintain low Black unemployment rates could have a significant positive economic impact on the African American community.
Takeaways from the April Employment Situation Report
- Black unemployment has reached an all time recorded low of 4.7%.
- The African American employment to population ratio of 60% almost equals white employment to population ratio of 60.3%.
- Unemployment continued to decline, and for all groups remains at or near 20 year low points.
- Consumer sentiment is declining and fears of a recession are widespread. However, this isn’t reflected in the jobs report which shows employment and labor force participation remain robust for most groups
The latest BLS monthly jobs report finds the economy added 253,000 new jobs in April. The industries reporting the greatest number of jobs were professional and business services and health care, which added 43,000 and 40,000 new jobs respectively. This is a sharp increase for the professional and business sector, which normally averages 25,000 jobs per month. Leisure and hospitality employers added 31,000 new jobs, mostly in food service and drinking places. Social assistance providers added 25,000 jobs as well, mostly in the individual and family services subsector. Across these industries, the average hourly wages increased as well. Overall, hourly wages rose 16 cents to $33.36 in April. This is $1.42 an hour more than April 2022 and of the industries showing the greatest gains in employment professional and business services continue to show the fastest growth in wages as well, rising to $40.20, an increase of $1.69 since April 2022.
In April 2023, the overall unemployment rate dropped slightly to 3.4%, down from 3.5% in March. This marks a period of historically low unemployment rates, indicating a robust labor market. Unemployment rates for all demographic groups are currently at or near their lowest levels in 20 years. Such consistent low overall unemployment, around 3%, has not been observed since the 1960s.
The gap between Black and white employment, now at a record low of 1.6 percentage points, highlights progress in addressing economic inequality. To make a lasting impact on the historical economic disparities between Black and white Americans, it is crucial to sustain these low levels of inequality and Black unemployment for the long term. This is particularly important given concerns about a potential upcoming recession.
In April, Hispanic workers also continued to show declining unemployment, falling from 4.6% in March to 4.4% in April. However, this is still slightly higher than April 2022, when Hispanic workers reported 4.2% unemployment.
In April 2023, the total number of employed people increased by 171,000, which helps to understand the overall job market by examining who is finding work. However, this increase is much smaller than the 894,000 new jobs reported in January, the largest growth in the past year. White workers experienced the most significant growth, with a 0.32% increase or 393,000 more people employed compared to March.
Interestingly, the number of employed Black workers decreased by 1.2% or 271,000. Despite a lower Black unemployment rate in April, this decline indicates reduced economic participation for Black workers. Consequently, the labor force participation rate for Black workers fell from 64.1% to 63.0%.
The employment-to-population ratio indicates the proportion of working-age adults who are employed. Historically, Hispanic workers have had a higher ratio compared to other groups, while Black workers have been trailing. However, since the pandemic began, a larger percentage of Black adults have become employed, nearly closing the gap with white workers. In April, the overall ratio remained unchanged from March at 60.4%. White and Hispanic workers saw slight increases of 0.1% to 60.3% and 63.8%, respectively. In contrast, the ratio for Black workers declined by 0.9% to 60.0%.
As we navigate the post-COVID economy and the labor market shifts it has caused, it is crucial that we not only maintain, but also strengthen the progress made in reducing Black/white employment disparities. The trends we observe in racial employment equity play a significant role in shaping our society as a whole.
Featured Image: © Adobe Stock-Federica Fortunat