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Black Americans only major group to see higher unemployment rates in December

·3 min read

The headline unemployment rate in the United States fell to 3.9% in December, but not all demographic groups are seeing the decline.

The Bureau of Labor Statistics on Friday reported that the Black unemployment rate rose month-over-month, from 6.5% to 7.1%. No other racial or ethnic group measured by the BLS saw unemployment rates increase in December.

The statistic raises concerns that the recovery may not be hitting all groups equally, despite the positive aggregate numbers.

“The report, in terms of jobs, continues to show an economy that is recovering. We still have a ways to go,” said Bill Rodgers, director of the Institute for Economic Equity at the Federal Reserve Bank of St. Louis.

The increase in Black unemployment appears to be concentrated among Black women, where the unemployment rate jumped from 4.9% to 6.2%.

An increasing unemployment rate could be due to a number of factors beyond simple job losses.

Because it only counts the “unemployed” as those without a job but actively searching for a job, a higher unemployment rate could also be the result of discouraged people out of work deciding they would like to begin job searching again.

The BLS reported that the number of Black women employed in December remained steady at about 9.8 million, on a seasonally adjusted basis. It was the “unemployed” figure that increased, from 500,000 in November to 651,000 in December.

Those figures propelled a higher participation rate among Black women — from 60.3% in November to 61.1% in December. In other words, the labor force of Black women (either working or available to work) appeared to increase.

The impact of extra unemployment insurance is not likely to have been a large factor in December's figures because the federal program expired in September.

Why the disparate impact?

Still, a larger pool of prospective workers is only half the battle; employers actually have to hire them.

And even with an elevated 10.6 million job openings, questions remain about how labor market disparities particularly disadvantage Black women. The Economic Policy Institute has noted that the demographic is disproportionately represented in lower-wage, higher-contact industries like leisure and hospitality that tend to be more sensitive to waves of the virus.

EPI adds that the Black community is also experiencing higher rates of COVID-19 hospitalization and death, leading to many situations where women in the household take on the responsibilities of unpaid care work.

“These compounding factors during the pandemic imply a higher demand on Black women in caring for sick relatives and other household work on top of being put at greater risk themselves,” EPI’s State Economic Analyst Marokey Sawo wrote in December.

Month-to-month jobs data can be noisy, especially with the high turnover and churn happening in the labor market. Another BLS dataset shows American workers currently have the power to shop and bargain for better jobs, leading to a record-high 4.5 million quits.

The churn means that snapshots of the labor market, like those from the monthly reports, may or may not be perfectly representative of what’s happening at large to the pool of labor.

Still, the trend in Black unemployment verifies that the recovery is not even.

“An economic recovery is not complete unless everyone recovers, so there’s still work to do,” wrote Department of Labor Chief Economist Janelle Jones.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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