“Unemployment claims have hit a 45-year low,” President Trump said during his State of the Union address this week, to applause from members of his own party. “It’s something I’m very proud of. African American unemployment stands at the lowest rate ever recorded.”
He noticed that the opposition wasn’t joining in celebrating his triumph.
“When I made that statement the other night,” Trump said at a retreat for Republican lawmakers Thursday, “there was zero movement from the Democrats. They sat there stone cold, no smile, no applause. You would’ve thought that on that one, they would’ve sort of at least clapped a little bit.
“Which tells you perhaps they’d rather see us not do well than see our country do great,” he added, “and that’s not good. That’s not good.”
There were just two problems with that indictment of the Democratic Party. The first is that many Democrats think that Trump is taking undue credit for an achievement for which he can’t claim responsibility. Since the end of the recession, the unemployment rates for all Americans have fallen. The rates for whites, blacks and Hispanics have all steadily (but unevenly) dropped.
The black unemployment rate was at its lowest point in history in December after it was more than cut in half during the last three-quarters of Barack Obama’s presidency.
On Friday morning, another complicating factor: The unemployment rate for black Americans jumped in January, according to new Bureau of Labor Statistics data.
You can see that uptick in the light blue box on this graph.
The black unemployment rate jumped from 6.8 percent in December to 7.7 percent in January. That rate is the highest it has been since April of last year, when the overall unemployment rate was 4.3 percent.
The 0.9-point increase is a big jump — but not an unprecedented one. It’s toward the far end of the distribution curve of monthly changes in the black unemployment rate; the biggest one-month change in that rate was in November 2005.
This does not mean, however, that there is necessarily a sudden crisis in the black community. You can see on the graph since 2010 above that the unemployment rate for all groups tends to fluctuate a lot. Since 2010, there have been two months in which the black unemployment rate briefly spiked even more than it did between December and January.
It’s a reminder, though, that Trump’s celebration of these numbers is fraught, just as his celebration of the price of the Dow Jones industrial average is fraught. These numbers can change quickly, and if you take credit for every shift in a positive direction, you could justifiably face criticism for shifts in the other direction.
There was other news in the jobs report. The country added 200,000 jobs, extending an unprecedentedly long run of monthly job creation. Hourly wages increased, too, which is what economists would expect to see when unemployment is so low.
On the second graph above, you may have noticed a light-gray box under that light-blue one. That’s to highlight another interesting trend in the jobs data.
For the past four months, the overall unemployment rate has been unchanged. There’s a level below which economists don’t expect the unemployment rate to be able to fall; there will always be some unemployed people as folks switch jobs and so on. The question is whether we’ve hit that bottom or whether the unemployment rate can keep falling.
A four-month pause is also not without precedent. It stalled for five months in 2012 and for four in 2015. And, of course, the overall unemployment rate also sees volatility.
Trump would be advised to be somewhat constrained in how he talks about the unemployment rate. Not only because Democrats are still reluctant to give him credit for where it is, but also because if the unemployment rate has gotten about as low as it’s going to get, that means that there’s only one other direction it can go.