While the U.S. labor market has remained relatively stable in recent months, new data shows Black Americans are facing rising unemployment — a trend some economists view as a warning sign for the broader economy, according to USA Today. 

The latest report from the U.S. Department of Labor shows that Black unemployment rate reached 7.2% in July, up from 6.3% one year ago and 6.8% in June. The rise follows a sharp 13% increase from May to June and remains well above the overall national unemployment rate of 4.2%. 

Black women have been particularly affected, with unemployment rising from 5.5% to 6.3% year over year. Certain states, including Michigan, are seeing jobless rates among Black workers approach 10%, according to the Economic Policy Institute, as USA Today notes.

Economists say the increase may be more than just statistical noise. 

"The Black unemployment rate is always the first to go up. That’s always the canary in the coal mine,” said Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities, in an interview with the outlet.

One possible factor: federal job cuts. Black Americans make up 18% of the federal workforce—well above their share of the overall labor force—and are overrepresented in agencies that have experienced downsizing, including the Department of Education, USAID, and Health and Human Services.

Black women in particular make up 12% of federal workers, nearly twice their share in the civilian labor force, according to Equal Employment Opportunity Commission (EEOC) data. 

“This has been a place where Black people are disproportionately more likely to get jobs – better jobs, well-paying jobs,” Ajilore noted.

Shifting economic policies and business uncertainty—especially around tariffs and trade—may also be playing a role. A recent survey by the National Association for Business Economics found that 1-in-4 companies plan to delay hiring or investments in the coming months.

The rollback of diversity, equity, and inclusion (DEI) initiatives may also be affecting Black professionals. Andre Perry, senior fellow at Brookings, told USA Today that the elimination of DEI programs across government, education, and private sectors may be contributing to an “antagonistic posture against the Black workforce.”

While DEI programs didn’t fully close executive-level racial gaps—Black professionals remain outnumbered 12 to 1 in top roles—their absence may be limiting Black hiring and advancement. In a previous report, Black executives fell by 3% in 2023, double the decline of white executives.