Is Black America the Leading Edge of a Coming Trump Recession?

Algernon Austin

July 18, 2025

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There is a saying that Black people are the last hired and the first fired. The current labor market may be supporting that picture.

In June, the Black unemployment rate spiked while other rates declined slightly (Figure 1). Since the monthly Black unemployment rate is noisy, it would be easy to dismiss this spike were it not for other possible warning signs of a weakening labor market. The June jobs report showed wage growth slowing and workweeks shortening. Both things suggest a possible economic slowdown.

Figure 1. Black Unemployment Jumps in June

Adding to the worry for Black America is the trend in the Black employment-to-population ratio, or employment rate. Figure 2 shows quarterly employment rates from 2021 to the second quarter of 2025. (The quarterly Black rates are less volatile than the monthly rates.) They show what looks like a downward trend beginning in 2024. If this is correct, it means that Black America is being first hit by a coming recession.

Figure 2. Black Employment is Now Trending Downward

While it would not be correct to blame Trump for a downward trend starting in 2024, he hasn’t done anything to strengthen economic conditions — and in fact he has worsened them greatly. Trump’s spasmodic tariff policies will in time raise costs to consumers, a major factor in the US economy. These policies also create uncertainty for businesses, causing them to delay or cancel hiring plans. Trump’s hostility to foreign governments and his draconian immigration policies have dealt a major blow to the tourism industry. The immigration policies also disrupt businesses reliant on immigrant labor and likely reduce spending by immigrant consumers. His administration’s cuts to government spending and staffing also creates unemployment. If the US falls into a recession in the coming months, Trump will be responsible.

Trump’s One Big Beautiful Billionaire Bill Act also will likely make a recession much worse for the American people. It severely worsens the US debt situation. The level of US debt will certainly make Congress even more resistant than normal to deficit spending to counteract a recession. The safety net cuts in the Bill for Billionaires will also mean that there are fewer government resources to help families experiencing job losses. The Billionaire Bill will cause more middle- and low-income Americans to suffer more and longer in the event of a downturn.

This first appeared on CEPR.

Algernon Austin, a senior research fellow at the Center for Economic and Policy Research, has conducted research and writing on issues of race and racial inequality for over 20 years. His primary focus has been on the intersection of race and the economy.