September 4, 2023: The U.S. unemployment rate increased, and Black workers’ labor force participation dropped in August.

The unemployment rate reached to 3.8% in the previous month, the highest since the previous year. It came as the labor force participation rate increased to 62.8% for its highest level.

The jobless rate decreased for Black workers, sliding to 5.3% in August, compared to 5.8% in July.

When accounting for gender, the unemployment rate for Black men age 20 and older lowered to 5%, a descent from the 5.3% rate in July. Black women saw their jobless rate decreases to 4.7%, compared to 5.2% the prior month.

“I am relieved that the Black unemployment rate is coming down; it had been a little elevated a couple of months earlier,”

 said Elise Gould, senior economist at the Economic Policy Institute. “Hopefully that’s a positive trend.” Among Black workers, the labor force participation

rate was little changed from the prior month. It came in at 62.6% in August, compared to 62.7% in July.

The jobless rate moved higher for Asians and Hispanics, however.

Among Asians, the unemployment rate increased to 3.1% in August from 2.3% in July. Hispanics saw their jobless rate increase to 4.9%, up from 4.4% a month earlier.

Gould noted that the household data underlying the racial and ethnicity figures are based on smaller sample sizes, so there can be significant volatility from one month to the next.

However, a potential area of concern emerged in the latest release: decline in jobs in the state and local government education space. Local government education payrolls decreased by over 10,000 in August, while state government education jobs dropped by nearly 5,000.

“State and local education decreased,” said Gould, adding that she’s watching that sector as it’s a notable employer of Black workers and women.