August jobs report shows declining participation among Black workers

Commuters arrive at Grand Central station throughout morning rush hour in New York, Nov. 18, 2021.

Jeenah Moon | Bloomberg | Getty Images

The August jobs report confirmed the U.S. unemployment fee rise throughout the board. Meanwhile, Black workers marked the one demographic to see their labor drive participation fall.

The unemployment fee rose 0.2 proportion level to three.7% in August, in line with knowledge launched Friday by the U.S. Bureau of Labor Statistics. Nonfarm payrolls got here in at 315,000 and fell in keeping with estimates of 318,000.

While all demographic teams noticed the unemployment fee tick up barely, it rose at a sharper tempo for each Hispanic and Black workers to 4.5% and 6.4%, respectively, from 3.9% and 6% in July.

However, Black workers marked the one group that noticed labor drive participation decline, whereas their employment-population ratio, which measures what proportion of the inhabitants holds a job, additionally fell.

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

For August, Black labor drive participation fell to 61.8% from 62% in July, whereas the employment-to-population ratio dipped to 57.9% from 58.3%

William Spriggs, chief economist on the AFL-CIO, mentioned that taking a look at Black workers is one approach to gauge what’s actually taking place among employers.

Black workers throughout the board face extra discrimination than many different teams, which might be one rationalization, Spriggs mentioned. A possible slowdown in hiring — as evident via this week’s ADP personal payrolls knowledge — is also contributing to the outcomes.

“When firms slow their hiring rate, that hit Black workers immediately because they’re already in line the longest to try and find a job,” Spriggs mentioned. “What’s happened is the queue’s just gotten longer so the discouraged worker effect is much more acute for Black workers.”

While it is too early to assign a selected trigger to the declining labor drive participation among Black workers, Gould mentioned the continued downward development in latest months could sign one thing aside from “a statistical anomaly.”

That mentioned, the Federal Reserve’s marketing campaign to shortly elevate charges to tame surging costs could also be inflicting extra injury to the labor market, which tends to look among traditionally deprived teams like Black workers.

“Black workers are beginning to feel the brunt of it in a disparate fashion,” mentioned Michelle Holder, a distinguished senior fellow at Washington Center for Equitable Growth. “Now, this is one report, but I pretty much believe that this is going to be the pattern over the next few months, particularly if the Fed continues to aggressively implement its approach.”

Like others, Holder agrees that it is too early to attribute a trigger to the decline in Black labor drive participation, however she did name consideration to rising unemployment among Black feminine workers.

The group noticed its unemployment fee rise from 5.3% in July to five.9%. In comparability, white feminine workers noticed their unemployment fee tick as much as 2.8% from 2.6%.

Hispanic feminine workers additionally skilled a pointy enhance of their unemployment fee, rising to 4.3% from 3.2% within the prior month.

While the jobless fee did rise at a sooner clip among Hispanic workers in comparison with white workers and the general jobs market, that group’s labor drive participation fee and employment development appear to imitate the broader market, Gould mentioned.

“We’re seeing this rise in unemployment as accompanied by a significant increase in participation and then an uptick as well in employment,” she mentioned. “I think that’s a hopeful sign. The fact that the unemployment rate moves up is not a troubling thing on its own.”

CNBC’s Gabriel Cortes contributed to this report.

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