Recovery is still in full swing for African American workers

The 2015 job market ended on a high note after trailing the pace of monthly job growth in 2014 for much of the year. The economy averaged net job growth of 284,000 in the last quarter of 2015, adding 292,000 in December—the second highest month behind October. Though the national unemployment rate was unchanged over the last month, it appears that African Americans reaped notable benefits from the end of the year increase in hiring. The black unemployment rate declined 1.1 percentage points (to 8.3 percent) and the percentage of African Americans with a job (the employment-to-population ratio, or EPOP) rose by half a percentage point, to 56.4 percent.

Even with this end of the year hiring surge, unemployment rates have remained relatively flat over the last two quarters of the year and are still slightly above the 2007 pre-recession average.  However, comparing annual averages for 2013, 2014, and 2015 reveals that there has been notable longer term progress, especially for black workers. On average, the black unemployment rate falls by 1.7 percentage points for every 1 percentage point drop in the national rate. The following chart shows that relationship has held up over the last couple years, but it also shows that changes in the black unemployment rate are consistent with increased employment and a growing (rather than shrinking) labor force. In fact, African American workers have registered more growth in labor force participation and employment than whites or Latinos over the last year.

Figure A

Percentage-point change in unemployment rate, labor force participation rate, and employment-to-population ratio, by race and ethnicity, 2013–2014 and 2014–2015

Measure  Race/ethnicity 2013–2014 2014–2015
Unemployment rate White -1.2 -0.7
Black -1.8 -1.7
Hispanic -1.7 -0.8
Labor force participation rate  White -0.4 -0.3
Black 0 0.3
Hispanic 0.1 -0.2
Employment-to-population ratio  White 0.3 0.2
Black 1.1 1.4
Hispanic 1.2 0.4
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Source: EPI analysis of Current Population Survey public data series

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Two solid years of job growth and near pre-recession unemployment rates is definitely good news, but it only carries American workers part of the way to recovery.  Wages in December grew 2.5 percent year-over-year, bringing average nominal wage growth in 2015 to 2.2 percent. Strong and sustained wage growth above 3.5 percent would be more consistent with full employment. Full employment would also improve the chances of better than average wage growth for African American workers.