The labor market is still strengthening overall, but communities of color are still struggling with high and, in some cases, worsening unemployment. Further economic pain could spread quickly, especially among communities of color, amid the political risks of Republicans holding the government’s ability to pay its bills hostage and the Fed aggressively raising interest rates.
The overall labor market is still strengthening. The Bureau of Labor Statistics projects that the labor market will add 311,000 jobs in February 2023, while the unemployment rate will rise from a five-decade low of 3.4% to 3.6%. The employed share of the prime-age population between the ages of 25 and 54 rose to 80.5% from 80.2% in January, approaching a pre-pandemic high of 80.6%. In general, the labor market is expanding at a meaningful but sustainable level.
However, weaknesses in the labor market persist. The average unemployment rate is higher in many communities of color than is the case for white workers. The unemployment rate was 5.7% for black workers and 5.3% for Latino workers, compared to 3.4% for Asian workers and 3.2% for white workers. Unemployment rates remain disparate by race and ethnicity, even though the labor market has gone through a historical recovery from the pandemic-induced recession.
In recent months, the unemployment gap has widened even further for some communities of color. For example, the unemployment rate for Latinos has risen from a recent and historic low of 3.9% in September 2022 to 5.3% in February. And, the unemployment rate for Asian workers increased from 2.5% to 3.4% during those months. The unemployment rate for black workers dropped from 5.9% to 5.7% during those five months. In comparison, the unemployment rate for white workers has changed little from 3.1% to 3.2% over the same time period. In the case of Latino workers, the unemployment rate gap has widened substantially for Latino and Asean workers relative to white workers. Such a widening gap is often a sign of a soft economy because people of color are the first to feel the economic pain that is “called”.last hired, first fired,
Digging deeper into the data for Latino workers, the increase in unemployment is especially evident among Latino men. Their seasonally-adjusted unemployment rate rose from 4.6% in February 2022 to 6.4% a year later, while the unemployment rate for Latina women barely rose from 5.1% to 5.4% during that year. Among prime-age workers — those aged 25 to 54 — the rate for Latino men rose from 3.6% to 5.8% over the past 12 months, while it declined from 4.8% to 4.7% for Latino women.
A different pattern emerges in the data for Asian workers. The unemployment rate for prime-age Asian men rose from 2.7% to 4.0% over the twelve-month period – a 1.3 percentage point increase – while the unemployment rate for prime-age Asian women rose 1.6 percentage points, from 1.9% to 3.5%. Time. The job market is slowing down for many people of color.
The economy faces substantial risks of recession or even recession. Republicans are gambling with the financial health of the federal government by denying it the ability to pay its bills. At the same time, the Federal Reserve appears poised to raise its key interest rates further in an effort to engineer a more noticeable recession. When economic growth collapses, many more people of color will feel the economic pain of unemployment and financial distress before white people.
Credit: www.forbes.com /