June saw an increase in the unemployment rate among Black workers

The overall unemployment rate in the United States experienced a decline in June. However, there appears to be a concerning trend among Black workers, as indicated by the latest nonfarm payrolls report.

In June, the overall unemployment rate stood at 3.6%, representing a 0.1 percentage point decrease from May, according to the U.S. Department of Labor’s report released on Friday. Unfortunately, Black workers encountered a rise in unemployment to 6% in June, up from 5.6% in May, marking the second consecutive monthly increase.

Within this demographic, unemployment among women slightly increased to 5.4% in June compared to 5.3% in the previous month, while men experienced a growth to 5.9% in June from 5.6% in May. Additionally, the labor force participation rate for Black men slightly decreased, while women’s participation rate fell from 63.9% to 62.9%.

Economists will closely monitor the upcoming round of payrolls data to determine if this negative trend persists.

“While we are cautious about drawing major conclusions from one-month changes due to potentially noisy data, a three-month trend is generally considered significant,” explained Carmen Sanchez Cumming, a research associate at the Washington Center for Equitable Growth. “A sustained decrease in employment levels for Black workers over the past three months would raise a red flag.”

Cumming attributes the rise in unemployment among Black workers to a slowdown in the economy. As the economy continues to recover from the pandemic, companies have made significant efforts to regain the lost positions, including offering higher wages to attract more employees. However, now that the labor market is approaching pre-pandemic capacity, companies are less likely to continue adding jobs at the same rate.

Furthermore, Cumming suggests that the job market may be responding to the Federal Reserve’s interest rate increases.

In addition to Black workers, Latino workers also experienced an increase in the unemployment rate, which rose from 4% in May to 4.3% in June. However, the labor force participation rate for this group slightly increased, reaching 67.3% compared to the previous month’s 66.9%.

Among Hispanic men, the unemployment rate decreased by 0.2 percentage point from May to 3.8% in June, with labor force participation remaining stable. Conversely, Hispanic women faced a significant jump in the unemployment rate, rising from 3.4% in May to 4.1% in June, while their labor force participation remained at a similar level as the previous month.

“The situation is more ambiguous for Latino workers since their unemployment rate increased this month but had actually decreased last month,” Cumming explained. “Overall, employment levels are still on the rise, so the picture is less clear in this case.”