Dan Burns and Howard Schneider
(Reuters) – Black unemployment hit record low in March, a sign of U.S. labor market A milestone that most policymakers and economists expect the market will start to cool in the face of higher interest rates, jeopardizing those historic gains.
The Bureau of Labor Statistics said on Friday that the unemployment rate for blacks fell to 5% last month from 5.7% in February, perhaps the most noteworthy data point in the report immediately showing that the U.S. The job market is resilient but also showing early signs of its vulnerability to higher borrowing costs engineered by the Federal Reserve last year.
Just a month ago, Federal Reserve Chairman Jerome Powell faced harsh criticism from a group of progressive Democratic lawmakers who accused him of trying to engineer a slowdown in hiring that would leave the historically disadvantaged — particularly Are black – most at risk of unemployment.
Data for March show this has not yet happened. The unemployment rate for African Americans fell 0.7 percentage points, the largest drop since November 2021, with the unemployment rate for black women falling to an all-time low of 4.2%. The unemployment rate for black men rose to 5.2% from a record low of 5.1% in February.
Additionally, the unemployment gap between whites and African Americans narrowed to 1.8 percentage points, the lowest since the Labor Department started tracking it half a century ago.
That is, as the headline unemployment rate in the US fell back to its lowest level since . s, which is probably already good. The question is whether such low rates and spreads will remain relatively stable, as most expect, as the job market weakens in the coming months, or whether blacks, Hispanics and others will benefit as economically disappear more quickly than during recessions.
Signs of late cycle behavior are beginning to accumulate. Both the net flow into the labor market and the labor force participation rate have increased, and research suggests that these developments occurred later in the employment cycle. Higher rates have already started flashing yellow.
For example, construction employment, which was surprisingly resilient, fell in March as housing starts have fallen since the Fed began raising rates more than a year ago. Manufacturing also lost jobs after a drop in industrial production, one of the statistics closely watched for the start of the recession.
Now that most of the job gains are coming from the areas that are proving to irritate the Fed the most, it could be that the Fed may feel the need to tighten conditions further to keep prices from rising sign of speed. Case in point: Not only did leisure and hospitality job growth lead overall private-sector job growth, monthly wage gains across the industry were 0.7 percent, more than double the national average.
Such data refocuses attention on the potential vulnerability of Black workers’ March gains. In every U.S. recession since the 1970s, black unemployment has risen at least 2 percentage points more than whites, and often far more.