Last month, joblessness among Black Americans soared to an unprecedented level unseen over the past three years, displaying a striking difference compared to the general labor market’s stability. As it rose to 6.8% in June from 5% in May, the Black American unemployment rate hit a peak last seen in January 2022. Conversely, the national unemployment rate demonstrated a decrease to 4.1%, with the addition of a robust 147,000 jobs in June, exceeding predictions. The downturn in unemployment was reflected among white, Hispanic, and Asian groups.
One variable contributing to the increase in Black American joblessness was President Donald Trump’s turbulent trade policies. This has brought instability to business plans and stimulated concerns over influential price spikes. Businesses have been reporting for a while that substantial policy shifts by the Trump administration – fluctuating tariffs to slicing federal funding – has made forward planning an uphill battle, causing some to temporarily pause their recruitment.
As per economic experts, Black Americans are often the first to feel the repercussions when economic circumstances begin to deteriorate. The disparity in income, wealth, financial reserves, and home ownership between Black Americans and their white counterparts is significant. The Trump administration’s focus on reducing diversity, equity, and inclusion initiatives is an additional concern.
When the economy takes a downturn, black workers potentially face the brunt more rapidly or more severely. However, this pattern is in line with a wider theme of an upward trend in unemployment for all working groups over the past two years. The impact on Black workers has simply been more pronounced.
Despite the overall labor market continuing forward, this development can be attributed to progress specifically within three sectors: health care, local government, and the hospitality industry. Particularly in June, the occupations in private education and health services sectors showed a significant surge with a net addition of 411,000 jobs compared to the situation half a year ago.
In the given time frame, industries other than government and hospitality have added less than 51,000 jobs each. It’s observed that Black Americans are often employed in the sectors of transportation, warehousing, and utilities. These sectors have seen a cutback in recruitment, particularly in recent months.
Businesses find themselves in a predicament as they attempt to set their plans for pricing, spending, and hiring amidst these fluctuating tariffs and uncertainty. The Trump administration’s concerted efforts to reduce the size of the federal government may amplify the negative impact on Black Americans. In the previous month alone, the federal government’s workforce was down by 7,000 jobs.
Federal employment numbers have reduced by 69,000 since January, which could shed some light on the current situation. Especially with the administration’s cut on Diversity, Equity, and Inclusion programs, the situation becomes more complicated. Notably, Black Americans are a significant part of the federal government workforce.
The recent unemployment rates can’t conclusively paint the complete picture of the economic wellbeing of Black Americans. The Labor Department’s monthly employment figures, based on household surveys, are generated from relatively small sample sizes for different racial and ethnic groups. This leads to more significant fluctuations in the data from one month to the next.
Amid the seeming resiliency of the overall labor market, there are other indicators suggesting potential weakness in different parts of the economy. Job growth has been limited in majority of sectors beyond the few identified earlier. After a wave of spending incited by tariffs in the spring, consumer expenditure has recorded a decline.