Unemployment rate of Black men rose in January, underscoring continued inequality

Black men lost ground in the workforce last month, marking a continuation of the disparities that have permeated the U.S. labor market.

Black males who were at least 20 years old saw an unemployment rate of 5.3% in January, up from 4.6% in December, according to seasonally adjusted data from the Labor Department. These workers had the highest unemployment rate when breaking down Black, Hispanic and white workers by gender.

By comparison, white men saw a jobless rate of just 3.3% in January, holding steady from December. The overall unemployment rate was unchanged from December at 3.7%.

Meanwhile, the Black community as a whole was the only tracked racial group to see unemployment increase from December. This underscores the impact of job losses among Black men, especially considering the fact that the rate for Black women was unchanged between December and January at 4.8%.

Though the uptick in the unemployment rate for Black men is something to monitor, it can be more indicative of an anomaly in December’s low data, said Elise Gould, senior economist at the Economic Policy Institute. January’s 5.3% rate comes basically in line with the average 2023 month, while December’s 4.6% was the lowest level seen in the year.

The tight labor market experienced during the pandemic helped close the gap in work-related opportunities among Black and white men, she said. Indeed, the difference in unemployment rates between Black and white men shrunk to 2 percentage points in January from 4.1 percentage points the same month in 2019.

Growth in the total number of employed Black men and the ratio of those with jobs to the total population compared with the start of 2023 also paints a picture of improvement, she added.

But Gould said the continued inequity in employment and pay highlights the need for further social progress, while bolstering the argument that a strong labor market alone won’t bring equality.

The average white worker aged 16 or older had a median weekly pay that was nearly 20% higher than their Black counterparts, according to federal data as of the last quarter of 2023. That disparity grew to almost 25% when looking at male workers alone.

“A better economy absolutely can help historically disadvantaged groups more because they’re the ones that are often left out and are slow to recover in weaker times,” Gould said. “Full employment is definitely sort of a requirement for many historically marginalized groups to be able to see positive impact in the labor market, but it’s not the only thing.”

She pointed to unions as one example of a positive force for Black workers, noting that the wage transparency among members can help close any racial pay gaps.

When combining genders, the unemployment rates of white and Asian workers ticked lower in January to levels last seen in late fall. The rate of unemployed Hispanics held steady from December at 5%, while the share of jobless Black workers inched higher to 5.3% from 5.2%.

Gould warned that month-to-month variations like what was seen in the unemployment rate of Black men can be fickle. Because of this, she said it’s important to evaluate longer-term trends before drawing conclusions.

Still, Gould said following employment patterns among Black workers and other marginalized groups can be important for spotting major economic trends. That’s true even when broader employment data like what was released on Friday signals a “hot” labor market, she added.

“It’s a canary in the coal mine,” she said. “When you’re thinking about where you’re going to see the signs of a recession, you’re not seeing it in the data today, but it’s always something to keep an eye on.”

— CNBC’s Gabriel Cortes contributed reporting.