December Black Unemployment Report

The unemployment rate for Black women increase to 6.2% as 151,000 were added to the jobless

The Black unemployment rate was 7.1%; the National unemployment rate stood at 3.9%; and non-Farm Payrolls rose by 199,000. Average wages rose 4.5% on an annual basis in December.

The Black Unemployment Rate

The Black unemployment rate jumped from 6.5% to 7.1% during December, the only group to report an increase unemployment. The increase is due to the concentration of Blacks in sectors that are vulnerable to the pandemic like leisure and hospitality, retail trade and transportation.

The above chart shows the Black unemployment rate and the LFP rate

The Bureau of Labor Statistics announced a huge increase in Black female unemployment in December as the number of unemployed Black women increased by 151,000. However, the figure does move around frequently. Black women added +210,000 jobs in the previous month of November.

The unemployment rate for Black women was reported at 6.2% and 6.5% for Black men.

The number of employed Black workers went down from 19.1 million to 19.05 million a loss of approximately 86,000 jobs. Peak Black employment was 19.7 million in Feb 2020.

The unemployment rate for Black men, 20 and order, was 7.0% (down from 7.2%), but it dropped for all the wrong reasons. There was an 88,000 person drop in the Black male labor force, while the number employed sank by 66,000, so the unemployment rate went down.

The employment to population (EM) also dropped slightly to 56.5% meaning less people were working in general but the participation rate stayed at 60.8% for Black Americans. That compares to the participation rate for Whites, Hispanics and Asians which was 61.7%, 66.0% and 64.6% respectively.

As is our custom, we calculate the “real” Black unemployment rate. It was determined to be 10.5% in December. The Black unemployment rate increased but the US U-6 rate decreased during the period. U-6 is the broadest measure of unemployment. U-6 is basically 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.

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 1.8 in December. In an ideal world, Blacks and Whites would be employed at roughly the same rates.

In a separate report, the BLS released median weekly earnings for the year by Race, Sex and Ethnicity. The median statistic which is half the people above the number and half below the number, gives a better description of the real world pay data. The average, which is distorted by Oprah, Lebron and Serena, is always higher than the median.

Blacks (25 and older) earn a weekly median wage of $839.00 dollars. Whites earn a median of $1,098 per week and Hispanics earn $847.00 per week. Asians are the highly educated leaders with a median weekly wage of $1,414 for workers 25 and over.

General Unemployment Report

In December, the BLS reported a national unemployment rate of 3.9% (a drop from 4.2%) and a similar decreased in the unemployed of 483,000 to 6.3 million. Both numbers are huge drops from the covid-19 high unemployment rate of 14.7% when more than 24 million people were reported as unemployed.

Non-Farm Payrolls increase by 199,000 in December, 2020

At the low point of the Covid pandemic the participation rate was 60.2%,

The United States has recovered from the covid pandemic quicker than many nations and is enjoying high growth rates during the recovery. Second quarter GDP was 6.7% and third quarter GDP was 2.3%.

A record 4.5 million people quit their jobs in the November according to the labor turnover report (JOLTS) including 1.0 million people in leisure and hospitality and about 700,000 in retail sales. An estimated 600,000 people quit jobs in healthcare. There are more than 10 million job openings.

Many worker groups recorded low unemployment levels. White unemployment declined by half a percentage point from 3.7% to 3.2%, as nearly 700,000 White people found employment. Almost 500K White workers left the unemployment rolls. A large part of the drop was the 463,000 White women (20 and older) who started working in December.

The Hispanic unemployment rate dropped slightly from 5.2% to 4.9% while the Asian rate was 3.8%.

The labor force participation rate was unchanged at 61.9% and the employment to population (EM) ratio was 59.5%.

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) stood was only 7.3%, close to a historic low. . U-6 is everyone who want a job or more hours.

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 which captures businesses expected future hiring trends drop 10 points, from and index value of 70 to index value of 60. Anything above 50 in an expected increase in hiring, however the hiring trend is slowing.

Business Survey Results

Non-farms payrolls grew only by 199,000 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: Leisure and Hospitality added 53,000 positions, professional services up 43,000, manufacturing increased by 26,000 and construction was up 22,000. Almost all other sectors had small increases. Government lost -10K jobs.

About 19.6% of the jobs created were goods producing jobs. If you add the government, then only 16.2% of the jobs

Other Employment Data

The number of people working remotely was 11.1% of people employed.

October payrolls were revised upwards of +102,000 to +648,000 and the November totals were increased by +39,000 from +210,000 to + 249,000.

In contrast to the BLS report, ADP reported an increase of 807,000 jobs in December, 2020. Small business (1-49) added 204,000, medium sized businesses (50-499) added 214,000, and large business (500 plus) added 389,000 jobs.

Paychex Small business report jobs index was up 7.3% in the past 12 months and Paychex’s wage growth was 4.2% during the same period.