Unemployment Rate Decreases in December, But Disparities Remain for Black Women and Hispanic Men

The unemployment rate in the United States declined in December, but rose for Black women and Hispanic men, according to the latest nonfarm payrolls report.

The unemployment rate for black women increased to 5.5% last month, up from 5.2% in November, according to data from the Labor Department. However, the overall employment rate for black people remained steady at 5.7%, and the unemployment rate for black men actually declined to 5.1% from 5.4% last month.

Meanwhile, unemployment among Latino men rose to 4% in December, an increase of 0.4 percentage points from 3.6% the prior month. The overall unemployment rate ticked up to 4.1% from 4.0%. Unemployment among Latino women also ticked up to 3.7% from 3.6%.

The figures in the paragraph above contradict the trend in the broader economy, which showed unemployment in the U.S. falling to 3.5% from 3.7%. This was 0.2 percentage points below consensus expectations from the Dow Jones.

"We've seen a lot of progress in the last few years in terms of job growth," said Michelle Holder, a distinguished senior fellow at Washington Center for Equitable Growth. "We've regained all of the jobs lost during the pandemic, and we're continuing to see strong growth in the labor market."

"But the industrial mix has changed, and this has had an impact on the distribution of unemployment by gender, race and ethnicity. This is particularly affecting black women and Latinx men," Holder added.

The December jobs report showed continued strength in the labor market, with robust job growth and lighter-than-expected wage growth. This fanned investor hopes that inflation may be coming down.

Nonfarm payrolls rose by 223,000 in December, more than the Dow Jones estimate of 200,000. This is good news for the economy, as it indicates that more people are finding work. Average hourly earnings rose 0.3% for the month and gained 4.6% from a year ago. These are compared to estimates of 0.4% and 5% increases. This indicates that workers are seeing their wages grow, which is a positive sign for the economy.

Elise Gould, a senior economist at the Economic Policy Institute, said that the labor market remains strong. She noted that both the household survey and the payroll survey are showing similar signs of strength, and that wage growth appears to be coming down.

Despite some improvements, many sectors of the economy where Black women are disproportionately represented have not recovered from the pandemic, according to Holder. Government employment, for example, was little changed in December, adding just 3,000 jobs. State government education employment, meanwhile, dropped by 24,000 due to strikes from university employees, according to the Labor Department.

According to Holder, both Black women and Latino men are well represented in the leisure and hospitality sector. The sector significantly added jobs in December, but remains below its pre-pandemic levels. Employment in the sector rose by 67,000 last month, but is still 932,000, or 5.5%, below what it was in February 2020.

Holder stated that the reason Black women have not been able to return to the workforce as they were before the pandemic is because the industries they work in have not recovered well.