US Black unemployment rate spikes for second month in a row

The US Black unemployment rate jumped for a second consecutive month, hitting a 10-month high in what in the past has signaled a broader weakening in the job market and approaching recession.

The Black unemployment rate rose to 6.0% last month from 5.6% in May, the Bureau of Labor Statistics said on Friday. In April, the gap between white unemployment narrowed to 1.6% as Black unemployment fell to 4.7%, both measures reaching the lowest levels since the Labor Department began tracking rates half a century ago.

The Black unemployment rate had shot up in May by nearly a percentage point, its largest monthly increase - outside the COVID-19 pandemic - since 2009, putting some economists on alert to see if it would become indicative of a wider trend. With June's increase, the jobless rate among African Americans has climbed 1.3 percentage points in the space of two months, widening the gap with the rate for whites - unchanged in that time - to 2.9 points from April's record-low 1.6 points.

A spike in the Black unemployment rate can be a strong predictor of an impending recession, since Black workers have historically been the first to be fired during an economic downturn. The fact it did not reverse at all in June heightened fears of recession.

"We typically see that Black unemployment rate rises by more than other groups and I don't necessarily have any strong reason to suspect that that wouldn't be the case were we to head into another recession," Valerie Wilson director of the think-tank Economic Policy Institute’s Program on Race, Ethnicity, and the Economy said ahead of the monthly report.

Wilson said the economic stimulus during the pandemic contributed to the relatively strong economic recovery for African Americans in the past year, but that these gains could be temporary.

The overall unemployment rate fell to 3.6% in June from 3.7% in May, and payrolls increased by 209,000 jobs, fewer than the 306,000 added in May.

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