August jobs report shows a decline in Black worker participation

Passengers arrive at Grand Central Station during the morning rush hour in New York, November 18, 2021.

Jeenah Moon | Bloomberg | beautiful pictures

The August jobs report showed a broad increase in the US unemployment rate. Meanwhile, Black workers marked the only demographic that showed their labor force participation decreased.

The The unemployment rate rose 0.2 percentage points to 3.7% in August, according to data released Friday by the US Bureau of Labor Statistics.. Nonfarm payrolls were 315,000 and fell in line with estimates of 318,000.

While all demographic groups saw a slight increase in unemployment, unemployment rates for both Hispanic and black workers increased at a faster rate to 4.5% and 6 percent, respectively. .4%, from 3.9% and 6% in July.

However, black workers marked the only group to see a decrease in labor force participation, while the group’s employment-to-population ratio, which measures the proportion of the population employed, also declined.

“There is some volatility in these numbers but seeing a downward trend in employment and participation is worrisome,” said Elise Gould, senior economist at the Economic Policy Institute.

For August, the black labor force participation rate dropped to 61.8% from 62% in July, while the employment-to-population ratio fell to 57.9% from 58.3%.

William Spriggs, chief economist for the AFL-CIO, says looking at Black workers is one way to gauge and understand what’s really going on among employers.

Black workers broadly face more discrimination than many other groups, he said, which could be one explanation. Potential slowdown in hiring – evident in this private ADP payroll data of the week – can also be a contributor to these results.

“When companies slow down their hiring rates, it affects Black workers immediately because they have been lining up the longest to try and find work,” says Spriggs. “What has happened is that the queues have become longer so the bored worker effect is much more severe for Black workers.

While it’s too early to pinpoint the specific cause of the decline in Black workers’ labor force participation rates, Gould said the continued downward trend in recent months could signal something. that’s other than “a statistical anomaly”.

That said, the Federal Reserve’s campaign to quickly raise interest rates to rein in soaring prices could do more damage to the labor market, which tends to show up among disadvantaged groups. historically disadvantaged as black workers.

“Black workers are starting to feel the burden of it in a different way,” said Michelle Holder, a distinguished senior fellow at the Center for Equitable Growth in Washington. “For now, this is a report, but I’m fairly confident this will be the pattern over the next few months, especially if the Fed continues to roll out its approach aggressively.”

Like others, Holder agrees that it is too early to attribute the decline in Black labor force participation rates, but should pay attention to the growing unemployment rate of Black female workers. .

This group saw the unemployment rate rise from 5.3% in July to 5.9%. Meanwhile, white female workers have the unemployment rate increased from 2.6% to 2.8%.

Hispanic female workers also experienced a sharp increase in unemployment, from 3.2% in July to 4.3%.

While the unemployment rate rose faster among Hispanic workers than among white workers and the job market as a whole, the group’s labor force participation rates and employment trends appear to be imitate the broader market, says Gould.

“We are seeing an increase in unemployment accompanied by a significant increase in participation and then employment,” she said. “I think that’s a hopeful sign. The fact that the unemployment rate is going up is not something to worry about.”

CNBC’s Gabriel Cortes contributed to this report.

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