Folks, I almost spilled my coffee reading this one. The latest jobs report is out, and while it’s mostly a “meh” report, one statistic stood out like a sore thumb – the unemployment rate for Black Americans rose from 6% to 7%. That’s the fastest one-month increase in Black unemployment since March-April 2020, and outside of the pandemic, it’s the highest gain since 2012. I mean, you can’t make this stuff up, right? The rise was even more stark for Black women, whose jobless rate increased to 7.3% in September from 5.9% in August. Somewhere in Atlanta, a producer thought this sounded terrifying, and now it’s all over the news.
Now, I know what you’re thinking – one month doesn’t make a trend, and there’s some reason to doubt the data. The Black unemployment rate is an extraordinarily volatile data point, extrapolated from a relatively small sample of data. Kevin Hassett, White House Director of the National Economic Council, suggested some statistical noise could be a contributing factor to the big spike, and several economists supported that notion. Bless their hearts, they’re trying to calm us down.
But here’s the thing – the overall increase in the unemployment rate to 4.2% from 4.1% was entirely attributable to the growth in joblessness of Black Americans. That’s a bit unsettling, especially when the unemployment rate for all other races the government tracks – Asian, Hispanic, and White Americans – fell between August and September. A rise in the Black unemployment rate can sometimes serve as a canary in a coal mine when problems are budding in the labor market. Jobs held by a larger percentage of Black workers than other races, including service-related roles and administrative support positions, tend to be the jobs employers cut first.
Heather Long, chief economist for Navy Federal Credit Union, said it’s too early to tell if this is a canary in the coal mine, especially given how volatile jobs numbers have been in recent months. “We need to see another month or two of data before calling this a trend,” she said. That makes sense, but I’m still a bit concerned. The problem for Black workers is that historically, it takes longer for Black Americans to find jobs than people of other races who are seeking work. And few sectors are hiring in this economy, reducing opportunities for folks who aren’t in healthcare or building data centers.
The sharp upswing in Black unemployment is an indication of the fragility of the “low-hire, low-fire” labor market, noted Sung Won Sohn, a professor of finance and economics at Loyola Marymount University and chief economist of SS Economics. “Cracks are showing at the edges,” he said, noting that the unemployment rate rising for Black workers is an “early warning sign.” I think that’s a bit of an understatement, but I get what he’s saying.
In conclusion, the latest jobs report is a mixed bag, but the rise in Black unemployment is definitely worth watching. As Hassett said, it’s a cause for concern, and we should keep an eye on it over the next several months. And who knows, maybe it’s just a statistical anomaly, but I’m not holding my breath. After all, as the saying goes, “when it comes to economics, you can’t have your cake and eat it too” – unless you’re a economist, then you can just make up a new theory and call it a day 🙄.
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
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