The unemployment rate among Black workers increased in June

The overall U.S. unemployment rate declined in June, but a negative trend among Black workers may be emerging, according to the latest nonfarm payrolls report.

Overall, the unemployment rate last month was 3.6%, a 0.1 percentage point decrease from May, the U.S. Department of Labor reported Friday. However, Black workers saw their unemployment rate rise to 6% in June from 5.6% in May, making it the second consecutive monthly increase.

Within that demographic, unemployment among women ticked higher to 5.4% in June from 5.3% in the prior month. Meanwhile, it grew to 5.9% in June, up from 5.6% in May, for men. The labor force participation rate for Black men inched downward, while women’s fell to 62.9% from 63.9%.

Economists will need to keep an eye out for the next round of payrolls data to determine whether a trend is developing.

“Sometimes we are cautious about saying a one-month change is very significant because sometimes the data is noisy, but a rule of thumb is three numbers is a trend,” said Carmen Sanchez Cumming, a research associate at the Washington Center for Equitable Growth. “If the employment level for Black workers has gone down pretty significantly for the last three months, then that is a red flag.”

Cumming attributed the increase in unemployment among Black workers to the mechanics of the economy slowing down. As the economy rebounded after the pandemic, companies made large leaps to recover the lost positions. For instance, employers boosted wages in a bid to hire more employees. Now that the labor market is reaching pre-pandemic capacity, companies are less likely to continue adding jobs at the same pace.

Additionally, the jobs market could finally be reacting to the Federal Reserve’s interest rate increases, she added.

Meanwhile, Latino workers also saw an increase in the unemployment rate, to 4.3% in June from 4% in May. However, labor force participation inched higher for the group, rising to 67.3%, compared to 66.9% in the previous month.

Hispanic men’s unemployment rate was 3.8% in June, reflecting a decline of 0.2 percentage point from May, while labor force participation held at nearly the same rate. Among Hispanic women, the unemployment rate jumped to 4.1% in June from 3.4% in May, with labor force participation at about the same level as the previous month.

“For Latino workers, it’s a little more murky because their unemployment rate increased this month but had decreased last month,” Cumming said. “Overall, their employment levels are still going up. So, a less clear picture there.”