The state for two of the nation’s top economic indicators – the employment rate and GDP – is presenting a gloomy outlook for Black Americans when it comes to job prospects.
The unemployment rate for Black workers is projected to rise to 6.8% for February 2025, up from 6.4% the previous month, according to a new analysis by Creative Investment Research. The calculation means that the firm believes Black Americans will lose an additional 78,000 jobs between January and February this year.
Simultaneously, the latest Federal Reserve Bank of Atlanta GDPNow projection from Mar. 3 showed that the U.S. economy is expected to fall 2.8% in the first quarter of 2025. That is nearly twice as low as the -1.5% prediction for gross
domestic product on February 28.William Michael Cunningham, an economist and owner of Creative Investment Research, told BLACK ENTERPRISE that his firm’s analysis was done ahead of the employment report by the Bureau of Labor Statistics (BLS) scheduled for March 7, 2025. Cunningham says his firm’s figures are based on non-seasonally adjusted data released by the BLS.
Updates on both the unemployment and GDP numbers are expected later this week. In general, a rise or drop in unemployment often moves in tandem with the direction of the GDP, which is a key measure of the nation’s economic health.
Another report by the payroll services firm ADP revealed that private sector employment rose only by 77,000 jobs in February. That was significantly lower than the 148,000 estimate, and a higher adjusted 186,000 in January.
ADP Chief Economist Nela Richardson stated, “Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month. Our data and other recent indicators suggest hiring hesitancy among employers as they assess the economic climate ahead.”
Cunningham said his firm’s 0.4 percentage point increase from January reflects government job reductions and weaker hiring in sectors that disproportionately employ Black workers. The U.S. government began firing thousands of people at numerous agencies nationwide in recent weeks as President Donald Trump and his ally Elon Musk cut federal government spending extensively.
Cunningham expects the overall unemployment rate to rise to 4.2% in February from 4.0% in January. He expects the change to slow hiring, growing layoffs, and weakened economic activity.
He anticipates white unemployment growing to 4.0% in February from 3.9% the prior month. He said unemployment is less affected by the downturn, due to greater employment mobility, stronger job networks, and lower exposure to declining industries.
He forecasts Hispanic unemployment to soar to 5.8% in February from 5.5% in January. He said the sharp downturn in consumer spending will likely disrupt service-sector employment, where Hispanic workers hold a large share of retail, hospitality, and food services jobs. Also, Cunningham maintained that as government employment declines further, Black workers overrepresented in the public sector are more vulnerable to job losses.
“These revised numbers show that the economic slowdown is accelerating faster than expected,” said Cunningham, who is also the editor of Impact Investing Online. “The steep contraction in GDP, coupled with near-zero consumer spending and investment growth, is a warning sign that employment conditions may worsen in the coming months.”
He added, “Black and Hispanic workers, who have historically been most vulnerable to downturns, are already experiencing higher job losses, and without policy intervention, these disparities could widen.”
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