Headline Numbers
The Black unemployment rate was reported at 6.4% in March, an increase of 14% over the February figure of 5.6%, however, the change may be random. The average rate over the past 24 months has been 5.6%. There are 204,000 less Black people working in March than in February. The Black labor force remained flat at 22,170,000 (22 million) and the participation rate was also the same (63.6%). There were just slightly less Black people working overall.
The “Real” Black employment was 9.9% (see below). This a rough estimate of real Black unemployment by adding the difference in Black / White unemployment to U-6 (everyone who wants a job). The National unemployment rate stood at 3.8%; and non-farm Payrolls rose by 303,000. Hourly wages increased by 4.1% and weekly wages (4%) were up year over year.
We are keeping an eye on the jump in Black unemployment because the change was significant.
Wall Street expected the report and there was little movement by the stock market, the news media, commentators, economists, and the Federal Reserve. Inflation as reported by the CPI was 3.8%, higher than expected.
New construction jobs surged to 39K (39,000), healthcare remained strong with 88k new jobs created, and so did leisure and hospitality (plus 49K). A surprise is government jobs at the state and local level; up 71,000, continuing a medium trend after covid-19.
If you want a good job, you have to look at construction, government, and healthcare. And all pay above average.
Total non-farm payroll continued its upward rise, increasing by 303,000 (303K) jobs which is good news for the Biden administration.
Wages improved by 6% annually (0.5% monthly) after several months of stagnation.
There were 9.7 million Black men employed (6.2% unemployment) and 10.4 million Black women(5.6% unemployed). Black teenage unemployment was 20%.
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This report is also filled with Notes because we have to explain some of the ideas, concepts and theories related to Black unemployment in this report. Since this the first Black unemployment report in a while, so we want to revisit some of the basic concepts about unemployment.
Note: We have stopped reporting the Black unemployment rate each month because of the record-low national rate since the COVID-19 pandemic. We have had 24 months of record low unemployment and Black unemployment. We are below NAIRU, the non-inflation accelerating level of unemployment and almost every Black person who wants a job can find one. Now the problem is long-term. New jobs stink. Pay has been stagnant for years and job quality (autonomy, trust, respect, and career prospects) have gotten worse. Most people measure a good job as one that pays good wages, and in the sectors where Black people work, wages are flat or down when you add in “perceived” inflation.
Note: Inflation is complex and partially psychological. People compare the price of gas or a gallon of milk to 20-years ago without noting how much more they make. Inflation is impacted by workers’ wages but also affected by corporate profit-seeking, external influences (like oil prices), supply-chain constraints and asset (real estate) appreciation. Inflation is not just about higher wages for workers.
Interestingly, the federal reserve, which sets interest rates, uses both the Consumer Price Index and Personal Consumption expenditures (PCE) index. PCE may be a better measure of inflation because it captures spending expectations that get built into the CPI inflation numbers. In other words, people spending patterns both reflect inflation and drive inflation. PCE shows that even though people complain about inflation, people have money and continue to spend, bidding up prices, and driving inflation. Economists believe “higher prices kill higher prices.”
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Black Unemployment Report Details
Since we have not published a report recently, we want to comment on some post-COVID trends in Black employment. Black unemployment has remained near record lows.
The unemployment rate for Blacks has moved up recently to 6.4% after record lows. While the rate has edged up slightly (5.8%) from a record low of 4.7% in April 2023, the rate still remains among the lowest ever.
Post-COVID, Blacks have returned to the labor force. Black Labor Force Participation remained strong at around 63.6%. The number of Blacks employed was 20.7 million a drop of 204,000.
Black Women and Men continued to work in strong numbers. There were approximately 11 million Black women working and 10.3 million Black Men. The Black female unemployment rate was 5.6% and the Black male rate was 6.2%; both near historic lows. The rate of Black male unemployment was the closest to the Black female unemployment rate as we have seen since the pandemic. Black men are working in record numbers.
The Black Teenage (16-19) unemployment rate was 20.1% an increase of 5% over last month. About 682,000 Black kids had jobs in July.
The Discrimination ratio, which is the number of unemployed Blacks compared to unemployed Whites increased to 1.7. The ratio is up since the pandemic but still down from the long-term average of 2.0. Historically, the Black unemployment rate has been double that of Whites. The trend over the past years has been downward toward 1.5 which would represent a lowering of employment discrimination against Black applicants.
Note: During COVID, the ratio hit an all-time low of 1.1. Our folks were not only brave, but worked in jobs like healthcare, hospitality, warehousing and transportation where remote work was not an option. The murder of George Floyd may have also reduced discrimination in hiring temporarily.
The employment to population (EM) ratio (59.5%) dropped. It had been slowly increasing after COVID. The EM ratio gives a general idea of the number of people working compared to the general population.
“Real” Black employment rate
As is our custom, we calculate the “Real” Black unemployment rate from U-6 plus Black unemployment minus U-3. It was determined to be 9.9% in December. The Black unemployment rate increased as U-6 has slowly increased (7.3%).
The U-6 is the broadest measure of unemployment reported by the Bureau of Labor Statistics. Many economists call U-6 the “Real” unemployment rate. In fact, U-6 was the official unemployment until President Clinton switched to U-3 in 1994. He didn’t like the numbers. U-6 includes anyone who wants to work and has looked for a job in the past 12 months plus part-time people who want full-time work (the under-employed).
Note: U-6 is a national number which is not broken down by race. Black U-6 is probably higher but not available.
To calculate the “Real” Black unemployment rate, we add U-6 plus the difference in general Black to White Employment. The difference between national unemployment(U-3) and U-6 is 3.5% plus the Black unemployment rate of 6.4% gives a real Black unemployment rate of 9.9%.
Yes, there is a lot here, but the Black U-6 number is the most important: 9.9%.
We also calculate the Discrimination Ratio or the Structural Racism Ratio which is the ratio of Black unemployment to White unemployment. The ratio, along with employment incomes, is the best overall indicator of discrimination in society. In a perfect world without discrimination, the ratio would be “1”. The ratio was about 1.7 in December. In an ideal world, Blacks and Whites would be employed at roughly the same rates.
Note: There are three great measures of economic discrimination in US society. These same numbers also measure Black economic success: The ratio of Black to White unemployment (short-term), the ratio of Black to White incomes (a medium-term indicator) and Black to White wealth ratio (a long-term, cumulative, historical, and structural measure). It’s a quick way to keep score of the larger issues in our society. In this report, we only look at Black / White unemployment ratio.
The Discrimination Ratio dropped to all-time low of 1.1 during the COVID pandemic as many Black workers were considered “essential,” while White workers were considered non-essential. Historically, the ratio of Black unemployment to White unemployment has been double (2x, 200%) since 1972 but has dropped to about 1.75 over the last 20 years.
End of Black Unemployment Report
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General Unemployment Report
In December, the BLS reported a national unemployment rate of 3.8% with 6.4 million people unemployed. Both numbers have been stable for past 24 months. The Black unemployment rate jumped to 6.4% while the White rate was 3.3%, the Hispanic rate stood at 4.5% and the Asian rate was 2.5%. 161.5 million people were employed.
Non-Farm Payrolls increase by 303, 000 which was above expectations of the press, wall street and the fed.
At the low point of the Covid-19 pandemic, the participation rate was 60.2%,
Many worker groups recorded low unemployment levels. The White unemployment rate was 3.4%: 2.9% for men and 3.2% for women. The Hispanic unemployment rate dropped slightly to 4.4%.
The labor force participation rate continued its upward trend since covid-19. Hispanics continue to work at about 2% higher rate that the US average. Blacks participated at a higher level than Whites. The employment to population (EM) ratio was 60.3%. EM is a general measure of the number of people working compared to the total population.
The number of people working part-time was counted at 3.9 million while the number of people not in the labor force who want to work was 5.7 million. Discouraged workers (who have given up looking) stayed flat at 463,000.
The “real” unemployment rate (U-6) was reported as 7.3%, also historically low.
Wages rose by 4.7% on an annual basis. The average hourly earnings increased by 19% to $31.31 dollars per hour. Weekly hours worked was calculated at 34.7 hours. Weekly hours worked has not budged since Jan 2020.
The diffusion index was 59% meaning that 9% more businesses expected to increase hiring in the future than lay people off. A remarkable sign of expected future hiring and economic growth in the US economy.
Note: The diffusion index captures business’s expectations of future hiring. The benchmark is 50% (or zero) which represents stable employment. At 50%, the number of businesses expecting to hire is the same and the number of businesses expecting to lay people off. Above 50% represent expected hiring growth, 50% is stable and below 50% means reduced hiring in the future.
For example, if 60% of businesses said they were hiring, 30% said laying off and 10% were stable: The diffusion index would be 65. 60% plus one-half of 10% or 65%.
Business Survey Results
Non-farms payrolls grew by 303,000 jobs in December. The monthly average has been closer to 500K for the past year. Non-Farm Payrolls have bounced back from April 2020 by adding 18.8 million jobs. The economy is still short 3.6 million jobs since February 2020.
Among major categories: Healthcare leads as usual with 81,000 new jobs. Leisure and Hospitality added 49K positions, local government was up 49K and construction increased by 39,000. Let’s look at key sectors with little job growth: Manufacturing (0 jobs), IT (1K), finance with 3,000 new jobs, and business services (7K).
Other Employment Data
The number of people working remotely was 10.9% of people employed.
January payrolls were revised upwards of +27,000 and the February payrolls down by -5,000.
In contrast to the BLS report, ADP reported an increase of 184,000 jobs in March 2024. Small businesses (1-49) added 16,000, medium-sized businesses (50-499) added 93,000, and large businesses (500 plus) added 87,000 jobs.
Paychex Small business report jobs index was down by -1.0% to 100.85. Stable.