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Black unemployment falls to lowest level on record

The U.S. Chamber of Commerce in Washington. (Andrew Harrer/Bloomberg)

Black unemployment fell to 6.8 percent in December, the lowest ever recorded by the U.S. Labor Department since it began tracking the black unemployment rate in 1972.

Economists say it's a sign the recovery from the Great Recession is finally starting to help a wider swath of the U.S. population.

During the aftermath of the financial crisis, black unemployment soared to 16.8 percent in 2010, meaning more than 1 out of every 6 African Americans was looking for a job but could not find one. The rate has steadily declined since, breaking the prior all-time low of 7 percent that was set in 2000 during the dot-com boom.

"6.8 percent unemployment rate for African Americans is lowest on record. Good news, except pretty bad news that this is the best ever,” tweeted Dean Baker, an economist at the left-leaning Center for Economic and Policy Research.

The white unemployment rate is 3.7 percent. The black-white gap in hiring and pay has existed for decades, with the black unemployment rate typically more than double that of whites. But the gap has narrowed slightly to 1.85 times higher unemployment for blacks instead of 2 times as much.

African Americans face a number of barriers to employment, including biases from recruiters. An oft-cited study in 2004 took the same résumés and put more “white sounding names” and “black sounding names” on others. The study found that employers were 50 percent more likely to call in the person with the white-sounding name for an interview, even though the two résumés had exactly the same qualifications.

The experiment has been repeated several times since with similar results, leading some minority candidates to attempt “résumé whitening” when they apply for jobs.

Beyond unemployment, African Americans lag far behind whites on pay, wealth and homeownership.

“If you are black and a college graduate, your net worth is still typically two-thirds that of whites who dropped out of high school,” says Darrick Hamilton, an economist at the New School who studies race and opportunity in America.

On the campaign trail, President Trump famously asked African Americans: “What do you have to lose?” by voting for him. He promised his economic agenda would lead to more jobs and higher wages for everyone. He ended up winning 8 percent of the black vote, a bit higher than Mitt Romney in 2012.

Hiring has been strong in Trump's first year in office, especially in manufacturing, construction and health care. The economy added 2.1 million jobs in 2017, the Labor Department said, slightly down from 2.2 million in 2016 and 2.7 million in 2015.

The job growth is “quite impressive for an expansion of this age,” said Mark Hamrick, senior economic analyst at Bankrate. Job growth was widely expected to slow in 2017, regardless of who was in the White House.

Wages, however, continue to be stagnant, especially for African Americans. The median income for black households is still lower than it was in 2000, according to U.S. Census data. There's hope 2018 might finally be the year that changes as employers are finding it harder to hire so they are more likely to want to increase pay to keep the workers they already have.

Trump's approval rate among African Americans remains at just 8 percent, according to Gallup.

Read more:

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