Why are unemployment rates climbing for Black workers?

In December 2025, the unemployment rate stood at 4.4%, up just 0.3 percentage points since December 2024, and relatively low by historic standards.

But that does not tell the whole unemployment story. There have been sharp upward spikes in unemployment over the past year for specific demographic groups. In particular, unemployment for Black workers is up by 1.4% in the past year. For Black women, it’s up even more. There are a lot more people unemployed long-term, for 27 weeks or more — up 114,000 since December 2024. And nearly a million (980,000) more workers are ‘underemployed’ — they want full-time work but can’t find it.

Shernice Mundell is 48, a homeowner and mother of three adult children, two of them living with her in Maryland. In August 2024, after ten years working in the private sector, she started a job as a member of the American Federation of Government Employees, or AFGE, at the federal Office of Personnel Management, working on health insurance contracts for the U.S. Postal Service.

She was still a probationary federal worker in January 2025, right after President Trump’s inauguration, when she said “we started getting emails asking us if we wanted to take deferred resignation. I said I wasn’t gonna take it. I was just going to ride it out.”

It was a short ride.

In mid-February, her job was eliminated. She and other OPM employees were told in a pre-recorded video.

Without income, she struggled financially. She went on food stamps. And the job search?

“Oh, it was really hard,” Mundell said. “I would apply for like four jobs every few days. I would get an email occasionally saying that I met the qualifications, they would put my application on file.”

Mundell's bout of unemployment makes her part of a trend, said Valerie Wilson, director of the program on race, ethnicity, and the economy at the Economic Policy Institute.

“Over the course of the last year, there was clear deterioration in the labor market for Black workers,” she said.

Historically, unemployment for Black workers runs at about double the rate of unemployment for white workers.

But in the last year, as the economy has slowed, unemployment for white workers has barely budged — up 0.2% from December 2024-December 2025 (from 3.6% to 3.8%).

Unemployment for Black workers, meanwhile, has soared — up 1.4% (from 6.1% to 7.5%). For those ages 20 and older, Black men’s unemployment has increased by 1.2% (from 5.7% to 6.9%), and Black women’s unemployment has increased by 1.9% (from 5.4% to 7.3%).

For that same age cohort, unemployment for white workers has not increased at all, and is still at 3.3%.

One development in particular has driven the increase in unemployment among Black workers, said Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities: sharp cuts to federal employment.

“This time last year we had the Department of Government Efficiency or DOGE basically taking a chainsaw to the federal workforce, historically the place Black households have been able to find good jobs, well-paying jobs, with pension benefits,” he said.

The Office of Personnel Management no longer publishes information on the current racial composition of the federal workforce. OPM told Marketplace in an email that the “diversity cube” data-search tool on OPM’s former web portal, Fedscope, where this information was obtainable until late in 2024 during the Biden Administration, “was eliminated pursuant to EO 14151, Ending Wasteful and Radical Government DEI Programs and Preferencing, and EO 14170, Reforming the Federal Hiring Process and Restoring Merit to Government Service.”

Back in 2024, when the data was still being updated and disseminated by OPM, Black workers made up 18.5% of the federal workforce, versus about 13% of the workforce overall.

“The federal workforce lost almost 270,000 jobs last year, and that’s going to be disproportionately Black workers,” Ajilore said.

Senior researcher and policy analyst Amy Traub at the National Employment Law Project, said DOGE’s downsizing had particular impact in certain areas.

“Layoffs were concentrated where Black women were overrepresented, like the Department of Education and Health and Human Services,” she said.

Another big drag on Black women’s employment has come from the backlash against diversity, equity, and inclusion programs, Wilson said.

“Corporations, the federal government, eliminat(ed) DEI positions and offices more likely to employ Black women,” she said.

One more factor pushing Black unemployment higher, Ajilore said, is a slump in manufacturing.

“Manufacturing employs a lot of Black households,” he said. “And tariffs had a huge impact on manufacturing, losing about 70,000 jobs since April of 2025, the time of Liberation Day.”

Another group of minority workers worried economist William Rodgers III, director of community development research at the Federal Reserve Bank of St. Louis.

“Whenever the economy slows down, young African Americans, 18 to 24 years of age, no more than ten years of experience, no more than a high school degree — their employment prospects start to wane,” he said.

When the job market peaked in mid-2023 and demand for workers was highest — in April 2023, overall unemployment hit a 54-year low of 3.4%— this group had an unemployment rate below 15%, Rodgers said. Now, it’s nearly 22%.

The rise in unemployment among Black workers will cause long-term economic damage, said Tulane University economist Gary Hoover.

“If you’re unemployed that’s going to affect your income, your investing and savings ability,” he said.

Hoover said more Black families will have to dip into emergency savings, and they’ll miss out on pension and IRA contributions, leading to lower household wealth accumulation.

“At some point we’re going to need to look back — five years from now, maybe ten years — when we start seeing blips in our wealth data,” Hoover said. “Those long-run gaps will hurt the entire U.S. economy, because these folks make up a significant portion of the workforce.”

Being without a paycheck certainly dealt Mundell a financial blow after she was laid off from the federal government.

She was delayed getting on unemployment. She said her former federal employer’s HR department didn’t provide the proper documentation initially. After eight months of mostly fruitless job searching, she finally landed a position doing insurance authorizations at a big regional hospital.

“The pay is a little slightly less than I was making with the federal government,” Mundell said. “But it does pay my bills. And I enjoy it. So it worked out. It worked out.”