Warning signs in the labor market are raising concerns about the U.S. economy’s health. The economy lost jobs in June, the first monthly net loss since the end of 2020. In August the unemployment rate reached 4.3 percent, a level not seen since November 2021. In particular, the unemployment rate for Black workers rose sharply over the summer. That’s a serious concern — first and foremost for the harms it poses for that community, but also for what it may portend for the economy at large. Labor market trends for Black people can be the canary in the coal mine for the economy as a whole, with Black people tending to be the first fired in advance of a downturn.
President Donald Trump may be in denial about these symptoms of labor market trouble. After the disappointing July jobs report, he unjustly fired Bureau of Labor Statistics Commissioner Erika McEntarfer over downward revisions in job growth estimates (something the BLS regularly does).
The unemployment rate for Black people rose 1.5 percentage points from May to August, from 6 percent to 7.5 percent.
But the rise in Black unemployment should come as no surprise, especially given the harms the Trump administration has inflicted on Black workers. The president’s chaotic tariff regime has wreaked havoc on sectors such as manufacturing, and the so-called Department of Government Efficiency ran roughshod over government employment. Both sectors disproportionately employ Black people.
The unemployment rate for Black people rose 1.5 percentage points from May to August, from 6 percent to 7.5 percent. This has expanded an already wide gap between the unemployment rates for Black versus white workers — with the former consistently about twice the latter.
The August jobs report found manufacturing employment fell by 12,000 jobs, with the sector seeing a loss of 78,000 jobs since the start of 2025. While manufacturing employment has been in relative decline for decades, employment in this sector has been vital for Black people in rural areas. The more recent, sharper decline in manufacturing employment is an outcome of the Trump administration’s tariff policy. The new, haphazardly imposed duties have affected a wide variety of goods used in manufacturing final goods, like steel and aluminum, from over 70 countries, including trade partners like Canada and Mexico.
Federal government employment has followed a similar pattern to the manufacturing sector. It also fell in August, by 15,000, for a total of 97,000 jobs lost since the beginning of the year. Black workers comprise 18.6 percent of the federal workforce, compared to just 13 percent share of the wider civilian labor force. Federal employment has long provided Black workers steady pay and good benefits, giving hundreds of thousands of Black households a pathway to enter the middle class and generate intergenerational wealth. It has also afforded many with meaningful careers that deliver enormous benefits to the public — like at Social Security, whose well-publicized struggles can be directly traced to understaffing problems the Trump administration has created.
More broadly, these trends in unemployment may augur a downturn for the economy. Black workers tend to be both the first fired when the economy falters and the last hired when the economy recovers. The prospect of a stumbling economy is especially troubling after the Republican megabill made deep cuts to health coverage and food assistance that might otherwise soften the blow. This could prolong any downturn — certainly for the people most affected, but also for a wider economy that would not be getting the counter-cyclical help it needs to regain its footing.
The Trump administration’s hostility to the Black community has been evident from its first days, whether through the president’s executive orders targeting an inclusive economy or its efforts to remove the stories of Black heroes and notable figures from federal government websites. The administration’s damaging budget cuts, extreme tariff policies and attacks on the federal workforce are already showing up in the data on Black households. But the harm will be felt far beyond this community.
Gbenga Ajilore
Gbenga Ajilore is the chief economist at the Center on Budget and Policy Priorities. He was previously a senior adviser at the Department of Agriculture and a senior economist at the Center for American Progress.