The jobless rate among Black Americans has climbed significantly in 2025, reaching 7.5% in August — a notable increase from earlier in the year. This trend is being watched closely as a potential early warning of broader economic weakness. n nHistorically, the unemployment rate for Black workers has exceeded the national average. However, during periods of strong labor market performance, such as 2019 and the early 2020s, that gap has narrowed. When economic conditions deteriorate, research indicates that Black workers are often the first to experience job losses. n nChris Martin, lead economist at Glassdoor, noted that downturns tend to disproportionately affect Black communities. The overall U.S. unemployment rate currently stands at 4.3%, up slightly from 4% in January, while the white unemployment rate is 3.7%, having risen only marginally over the same period. n nRecent employment data shows a clear deceleration in job creation across the economy. Jessica Fulton, vice president of policy at the Joint Center for Political and Economic Studies, stated that the decline in employment among Black Americans likely reflects a wider economic slowdown. n nBeyond cyclical factors, structural issues are also contributing to the trend. Federal workforce reductions appear to have had an outsized impact on Black employees. Additionally, many corporations have scaled back diversity hiring initiatives and dismantled departments focused on equity and inclusion, roles where some Black professionals were employed. n nFrom 2020 onward, the Federal Reserve adopted a more inclusive interpretation of its employment mandate, considering metrics like the Black unemployment rate when assessing whether maximum employment was achieved. Goldman Sachs highlighted this shift in a 2021 analysis. However, in 2025, the central bank removed the term “inclusive” from its official statements — a change that parallels broader reversals in corporate and political commitments to diversity. n nAs the Fed weighs possible interest rate reductions, analysts are questioning whether it will factor in the sharp rise in Black unemployment. The decision could signal whether labor market disparities will continue to inform monetary policy. n— news from Axios n
— News Original —nAn important warning sign for the economy is flashingn nThe unemployment rate for Black Americans is up sharply this year. n nWhy it matters: It ‘s a crisis for those losing their jobs and a flashing red indicator light for the economy overall. n nHow it works: The Black unemployment rate has long been higher than the jobless rate overall — but the gap narrows when the labor market is strong, as it was in 2019 right before the pandemic and during the strong job market of 2022 and 2023. n nWhen the labor market weakens, some research shows that Black workers face higher unemployment rates. n n”When the economy takes a downturn, it hits Black Americans first,” says Chris Martin, lead researcher on jobs site Glassdoor ‘s economic research team. n nBy the numbers: The Black unemployment rate was 7.5% in August — a rate that would be viewed as catastrophic if it were the overall jobless number. It is up more than a point from the beginning of the year. n nThat ‘s compared with an overall unemployment rate of 4.3%, up slightly from 4% in January. The white unemployment rate (3.7%) is also up just 0.2 points over that period. n nStill, the most recent jobs report showed that job growth overall has slowed considerable over the past few months. n n”It seems fairly clear that declines in Black employment are likely connected to a broader slowdown,” says Jessica Fulton, vice president of policy at the Joint Center for Political and Economic Studies, which advocates for policies that improve outcomes for people of color. n nThe big picture: This isn ‘t just about the business cycle. There ‘s more going wrong for Black Americans. n nPrimarily, federal government layoffs, which appear to have disproportionately impacted Black people. n nThere has also been a pullback in efforts by companies to prioritize hiring people of color. And companies have disbanded DEI (diversity, equity and inclusion) teams where some of their Black employees worked. n nBetween the lines: Beginning in 2020, the Federal Reserve took a more inclusive approach to its mandate to keep unemployment in check — explicitly saying that achieving maximum employment was an “inclusive goal.” n nThat appears to have meant looking at the Black unemployment rate among several indicators to judge if the economy was at maximum employment, as Goldman Sachs laid out in a 2021 note. n nBut this year, like many groups that have pulled away from diversity in the second Trump era, the Fed dropped the use of the word “inclusive” in its statement. n nWhat to watch: The question now — will the Fed pay attention to the spike in Black unemployment as it considers a rate cut?