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Unemployment gap widens as overall rate falls

Brittany De Lea
·2 mins read

While the U.S. economy shows signs of recovery following devastation wrought by the coronavirus pandemic, improvements do not appear to be equal across all demographics.

The overall U.S. unemployment rate fell by 1.8 percentage points to 8.4% in August as the U.S. economy added 1.4 million jobs. The number of unemployed individuals fell by 2.8 million to 13.6 million.

But the unemployment rate has fallen faster for White workers than Black workers, leaving a widening gap.

According to data from the Federal Reserve Bank of St. Louis, the unemployment rate for white workers in August was 7.3% -- lower than the national average – while the rate for black workers was 13%.

CORONAVIRUS PANDEMIC HAS DESTROYED 1.4M FRANCHISE JOBS, CAUSING ‘LASTING’ DAMAGE: INDUSTRY GROUP

In June, the gap between the two groups’ unemployment rates hit the widest level in five years – at 5.3 percentage points. By August, that gap had widened to 5.7 percentage points.

The gap recorded in August is wider than the comparable period last year, when the unemployment rate for Black workers was 5.5% in September – compared with 3.2% for White workers.

While a gap has traditionally existed between unemployment rates for the two groups, the Black unemployment rate was hovering near historic lows prior to the pandemic.

The U.S. lost 22 million jobs as a result of the virus outbreak. Between February and April, Black workers saw a greater loss in employment than white workers, according to the Economic Policy Institute, which noted that in April less than half of the black adult population was employed.

EPI said that economic devastation was particularly widespread in the black community because they have traditionally experienced higher unemployment rates, lower wages and have less savings to fall back on.

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The Bureau of Labor Statistics attributed recent improvements in the overall labor situation to a resumption in economic activity that had been curtailed as a result of the pandemic.

However, as of last month nonfarm employment remained below the level recorded in February by 11.5 million – or 7.6%.

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