The surge in unemployment among Black Americans can be a troubling sign for the economy as this segment is often the first blow from a slump in the economy.
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Economists have seen the US labor market as resilient in recent months, but some have warned that rifts have begun to appear within the country’s black workforce.
According to the latest employment report from the Department of Labor, the unemployment rate among Black Americans reached 6.3% in July and 7.2% from 6.8% in the previous month. The latest surge follows a spectacular 13% increase from May to June, well above the total unemployment rate of 4.2%.
Black women in particular have seen a dramatic increase in unemployment rate over the past year from 5.5% to 6.3%. Also, certain states see very high unemployment rates among black people, according to the Institute of Economic Policy, a left-leaning think tank.
Economists say this year’s surge in black unemployment rates could be a troubling sign for the economy as this segment is often the first blow from the economic downturn. Other ethnic groups may already be seeing the impact of weakening the labour market. Unemployment rates for white, Asian, Hispanic and Latino workers rose by 0.1, 0.4 and 0.2 percentage points respectively in July. Additionally, the strong labour market photo was hit with the latest employment report release showing that salary profits for May and June have been revised down below 258,000.
“The unemployment rate for black people is always the first to rise. It’s always the canary of coal mining,” said Gvenga Ajiroa, chief economist at the Nonpartisan Centre for Budget and Policy Priorities.
Why is the unemployment rate among black workers increasing?
The economist told USA Today that recent cuts in jobs within the federal government could potentially attack black workers particularly violently, as they account for a significant portion of their employees.
Overall, Black Americans account for 18% of the federal workforce as of September, according to a May Women’s Law Center report. Black employees make up an even larger share in several institutions that have seen some of the most severe employment cuts, including the Department of Education (36%), the Department of International Development (21%) and the Department of Health and Human Services (20.5%), according to figures from the US Department of Personnel Management.
According to data from the 2021 people from the U.S. Employment Opportunity Committee, the difference between black women, who make up about 12% of the federal workforce, is almost twice as much as the participation rate in the private workforce.
“This is where black people are likely to get a disproportionate job.
Economists point to business uncertainty as another potential driver for changing the country’s trade policy. Companies will suspend key decisions such as employment until they have a better understanding of how tariffs affect final profits. A recent study by the National Association of Business Economics found that one company is planning to delay employment or investment over the next six months.
Neither federal programs, education, and private sector programs, nor the Trump administration’s driving forces to eliminate diversity, equity and inclusion, or DEI, could play a role in recent unemployment rates, creating “annihilation towards the Black workforce” that undermine black employment rates.
DEI programs often did not reach the goal of filling racial gaps. Black Americans, for example, are still over 12 to 1 by white people in executive roles. However, pullbacks could still affect the diversity of Black American careers and executive suites. USA Today previously reported that in 2023, the ranks of black executives had reduced by 3% from the previous year, twice as many as white executives as the Supreme Court dropped positive action in university admissions and conservative groups.
“It’s one of the things I think plays a role (in this year’s unemployment data), but it’s really hard to pinpoint,” Ajilore says. “There are no smoking guns.”
And while black employees have benefited from the tough labor market in recent years, he said that now they may be “last hired, first fired,” or risked the practice of making recently hired employees first, as the labour market cools down.
Which state has the highest unemployment rate among black Americans?
Certain communities have seen even more dramatic increases in unemployment among black workers.
In Michigan, the unemployment rate among blacks reached 10% in the first quarter, according to the Institute for Economic Policy. South Carolina’s rate rose 3% over that time frame to 6.9%.
South Dakota, Alabama and Maryland had the lowest rates at 2.8%, 4.3% and 4.3% respectively.
“The tally (labor market) figures mask what’s actually happening at the local level,” Perry said. “So in some places, black people are in a recession because of their appearance. In other places, black people are hiring much better.”
Is this an economic warning?
Elizabeth Crofoot, senior economist and lead researcher at Lightcast, said recent employment data is “unsettling.” She said it is unclear based on previous figures whether unemployment rates among Black Americans were caused by a small sample size blip, but she said the July data would draw a more detailed picture of the decline in participation in the Black workforce.
“The labor market data from the BLS (Book of Labor Statistics) is volatile each month. In particular, these response rates are not as high as before, so there is a lot of noise in the data,” she said. But “this looks like a new trend.”
It can write bad news for the economy as a whole. Crofoot said unemployment among black people tends to rise first as the economy is weaker.
She noted occupational segregation when different demographic groups are likely to be concentrated in a particular part of the workforce. As one driver, black employees lost trade, pointing to the existence of jobs in industries that saw declines in federal workforce, manufacturing (threw 11,000 jobs between June and July).
“There are certain sectors in the economy where there are more African Americans… and usually those jobs aren’t the best jobs,” she said. “Employment in the low end healthcare sector, especially in retail, for example.”
Ajiroa pointed to data from the labor sector showing that more than 300,000 black women lost employment in the first half of 2025 as another indication could be the beginning of a long-term trend.
The rising unemployment rate for Black Americans may not be the only rift in labor market data. Recent graduates have struggled to find work amidst the rise of artificial intelligence and the business uncertainty associated with the tariffs. And the benefits of employment this year are concentrated in areas like healthcare. Leisure and hospitality; between state and local governments.
Overall, US employers added just 73,000 jobs in July..
“The labor market is slowing,” Ajiroa said. “That’s one of those things that I said was coming when looking at black unemployment and black labor market metrics.”
