Trends and Observations
1. White Population:
The unemployment rate for Whites has shown minor fluctuations, generally staying between 3.10% and 3.50%.
The lowest recorded rate was in April 2023 (3.10%), and the highest was observed in October and December 2023, and June 2024 (3.50%).
This demographic shows the least variation in unemployment rates compared to others.
2. Black Population:
Blacks traditionally experience the highest volatility in unemployment rates, with a 0.2% increase in June 2024.
The rate increased from 4.80% in April 2023 to a peak of 6.40% in March 2024, before decreasing to 5.6% in April 2024. From April to June 2024, Black unemployment increased by 0.7%, with a 6.3% unemployment rate in June 2024, despite a stable labor force participation rate.
The rate remains the highest among all demographics, indicating ongoing challenges in employment stability.
3. Asian Population:
While Asians have generally maintained the lowest unemployment rates, June 2024 saw unemployment jump 1% from 3.1% in May 2024 to 4.1% in June 2024.
The rates ranged from a low of 2.50% in March 2024 to a year high of 4.1% in June 2024.
Such a significant month over month increase indicates a departure from the traditional stability of the Asian unemployment rate.
4. Hispanic or Latino Population:
The Hispanic or Latino unemployment rate decreased by 0.1% to 4.9% in June 2024.
The Hispanic or Latino unemployment rate has shown moderate fluctuations, with a notable rise to 5.0% in May 2024 before slightly decreasing to 4.9% in June 2024.
Overall, Hispanic unemployment rates have remained relatively stable compared to recent fluctuations in Black and Asian unemployment, though they are still less stable than White unemployment rates.
Implications
1. Black Population:
Significantly higher and more volatile unemployment rates for the Black population suggest underlying systemic issues, such as discrimination and lack of access to job opportunities, leading to economic instability within this community.
The peak of 6.40% in March 2024 might correlate with broader economic or policy changes affecting employment, such as anti-DEI efforts.
Data shows that black unemployment is a lagging indicator of inflation. As the economy overheats (causing inflation to rise), black business expands at a faster rate. When the economy cools down to compensate for high inflation, black businesses begin to contract again. This trend is likely due to the post-pandemic easing.
2. Asian Population:
The consistently low unemployment rates for the Asian population indicate stronger employment stability and access to job opportunities within this community.
It is essential to explore the sectors in which the Asian population is predominantly employed to understand the factors contributing to their lower unemployment rates.
FRED data show Asian unemployment rates typically rise in Q2/summer and begin to decline in Q3/fall (quarterly), monthly), indicating this latest jump (while still noteworthy) may largely be cyclical.
Asian unemployment has been falling since the global financial crisis of 2008 and 2009. Following the pandemic, it is trending upwards again for the first time in roughly 15 years. Sufficient data do not exist to suggest Asian unemployment to be a leading indicator of economic decline/recessions, but rising unemployment rates in a demographic with traditionally low rates could indicate rough times are in store for the economy.
3. Hispanic or Latino Population:
The fluctuations in unemployment rates for Hispanic or Latino individuals suggest economic vulnerability, despite the recent June 2024 decrease in unemployment. The increase from 4.0% in April 2023 to 5.0% in May 2024 indicates that this demographic may be more susceptible to economic shifts and downturns.
The relatively high unemployment rates compared to White individuals suggest barriers to stable employment for Hispanic or Latino workers. These could include language barriers, educational disparities, and potential discrimination in hiring practices.
4. White Population:
The relative stability of White unemployment rates suggests that this group may be less impacted by economic cycles. During periods of economic downturn, White workers might have better access to social safety nets, financial resources, and networks that can help mitigate job loss.
The composition of the workforce among White individuals might include a higher proportion of full-time and permanent positions, as opposed to part-time or temporary roles more common among other demographics, contributing to more stable employment rates.
Conclusion:
The change in Asian unemployment, particularly the sharp increase from 3.1% in May 2024 to 4.1% in June 2024, is significant and noteworthy. Historically, Asian unemployment rates have been among the lowest, indicating strong employment stability and access to job opportunities within this community. However, the recent jump suggests potential underlying factors that could be contributing to this departure from traditional stability.
One possible reason for the increase is the seasonal nature of employment in certain industries. Many Asian workers are employed in sectors such as hospitality, retail, and education, which can experience significant seasonal fluctuations. For instance, the end of the academic year or the beginning of summer might lead to temporary layoffs or reduced hours, causing a spike in unemployment rates during this period.
Whites show the most stable unemployment rates, indicating resilience in economic downturns. In contrast, Blacks face persistently high and volatile unemployment, suggesting deeper systemic challenges. Hispanics show moderate fluctuations, reflecting ongoing economic vulnerability. These disparities underscore the need for targeted policies to address equity and access to stable employment across all communities.
Research Assistants: Eric Gordon, University of Florida. Luke Nelson, Washington and Lee University.