While the overall U.S. unemployment rate dropped slightly in August -- to 4.7 percent from July's 4.8 percent -- the Hispanic unemployment rate has not budged from the 5.3 percent it set in June, according to data released today by the U.S. Department of Labor.
In August, Hispanics lost 50,000 jobs. However, the labor force decreased as 35,000 of those working previously left the job market altogether. With a 92,000-person increase in the Hispanic population for August, the total number of Hispanics considered "not in the labor force" increased by 127,000.
On an annual basis, employment of Hispanics increased by 768,000 jobs, bringing the Hispanic unemployment rate down from 5.8 percent in August 2005 to the current 5.3 percent. Overall, the U.S. economy added 2,154,000 jobs since August 2005. Hispanics filled 35.7 percent of those new positions, despite being only 13.6 percent of the total U.S. labor force.
Looking at the seasonally unadjusted data for Hispanic subgroups, the unemployment rate for Hispanic men 20 and older increased to 4.2 percent from 4.0 percent in July. Although Hispanic men gained 17,000 jobs in August, the labor force in turn increased by 48,000, leaving 31,000 unemployed. Nonetheless, Hispanic men still have one of the highest labor force participation rates of any group, 84.2 percent in August. By comparison, only 76.2 percent of all men age 20 and over were in the labor force.
The unemployment rate for Hispanic women also rose slightly, to 5.4 percent from 5.2 percent in July with Hispanic women losing 10,000 jobs. With 4,000 new entrants to the labor force, the number of unemployed Hispanic women increased by approximately 13,000 (discrepancy due to rounding).
At the end of summer, many Hispanic youths (age 16 to 19) head back to school, which traditionally decreases the labor force. The same was true this August, as 170,000 Hispanic teens left the job market -- decreasing the number of employed youths by about 117,000 and the number of unemployed youths by about 52,000. The net effect was to decrease the unemployment rate for Hispanic youth to 16.1 percent, down two percentage points from July.
Since the unemployment rate is the ratio of unemployed people divided by the total labor force, which includes both the employed and unemployed, separate components can change without the rate itself changing.
In addition, people are counted as unemployed only if they are actively seeking work when they are surveyed. Therefore, whether people are even considered in the labor force also fluctuates. People can leave the labor market deliberately for a variety of reasons, such as family responsibilities. However, often they are "discouraged workers," people who have given up an active search for work due to lack of success. The more discouraged workers there are, the less accurate statistics like the unemployment rate are in representing true labor market conditions.
