January Jobs Report: Dr. Bernard Anderson Breaks Down Black Unemployment and Other Numbers

The economy is in the 11th year of continuous uninterrupted growth, the longest expansion in American history.   Economic activity, measured by GDP, is rising at a steady, balanced pace, the labor market is fully employed, and inflation is effectively under controlPayroll employment rose by 225,000 jobs, and the unemployment rate ticked up to 3.6%. However, Black employment declined by 163,000 jobs and the unemployment rate ticked up to 6.0 %. As a result, the Black/white unemployment disparity  increased to 1.93, reverting to the persistent, long-term 2:1 ratio.

Economic growth is anchored in household spending which is rising at a steady pace. At the same time, business  fixed investment and exports remain weak.  The trade indicators  are influenced significantly by the overhang of U.S, initiated tariffs which among other effects, reduce global growth.

A note about housing: The housing sector is central to the success of the economy, and the quality  life of the population.  Housing generates 15% of all household spending, but a higher rate of spending for low and middle income families.  Housing was hit hard during the 2007-08 financial crisis, contributing to the depth and breadth of the recession.  The economic collapse reduced housing formation, increased home  foreclosures, and greatly reduced the net worth of African American families.  Since 2012, the housing sector has slowly recovered, in response to sustained low interest rates, declining unemployment, and rising wages.

Two challenges constrain stronger growth of the housing sector: First, difficulties home builders face in finding and retaining qualified and skilled worker. Second, the declining presence of community banks in the consumer real estate mortgage market. Community banks have been disproportionately harmed by broad based,  regulation imposed on the banking sector in the wake of the financial crisis. The regulatory burden has not been   adequately reduced for community banks.

This challenge is under review by the House Financial Institutions Committee chaired by Congresswoman Maxine Waters.    Progress on this front will benefit African American families in urban areas as they grapple with deepening gentrification which is reducing affordable housing in many communities across the country - - - communities in which Urban League affiliates are located.

                Bernard E. Anderson, Ph.D.