During the Great Recession, between 2008 and 2010, the unemployment rate climbed gradually and then slowly declined over nearly a decade. During the COVID-19 pandemic, between February and April 2020, the unemployment rate spiked to historically high levels but quickly dropped and had largely returned to pre-pandemic levels by April 2022, just two years later.
These are overall patterns, but do they hold across different racial and ethnic groups? To see how the unemployment rate differs by race and ethnicity within each recession, we can look to FRED. Our FRED graph above plots the unemployment rate for Black, White, Latino, and Asian workers—in blue, red, green, and purple, respectively—from October 2006 to the latest available data. Historically, Black workers have usually faced the highest unemployment rate, followed by Latino workers. The unemployment rates of White and Asian workers closely track one another, with Asian workers generally facing the lowest unemployment rate.
During the COVID-19 recession, Latino workers suffered the largest shock: Their unemployment rate skyrocketed from 4.3% in January 2020 to 18.8% by April 2020—a 14.5-percentage-point increase. Asian workers suffered the second highest increase (11.4 percentage points), followed by White workers (11 percentage points) and Black workers (10.3 percentage points). Unemployment rates have since been on a rapid and steady decline. By April 2022, rates had dipped below January 2020 levels for Black and Latino workers, while remaining only 0.1 percentage point above for both White and Asian workers.
On the other hand, unemployment rates gradually climbed over the Great Recession period. Consistent with historical patterns, Black workers faced the highest unemployment rate throughout the episode, followed by Latino workers. By June 2009, the two groups had seen comparable increases in unemployment rates (from pre-recession levels in November 2007) of 6.3 and 6.2 percentage points, respectively. Even though unemployment rates increased by over 4 percentage points for both White and Asian workers over the same period, they faced low unemployment relative to Black and Latino workers. The gradual recovery pattern holds, with unemployment rates stabilizing around pre-recession levels in mid to late 2016 for all four groups.
How this graph was created: In FRED, search for the seasonally adjusted unemployment rate for one group, e.g. “Unemployment Rate – Black or African American.” From this graph, click “Edit Graph” at the top right corner and navigate to the “Add Line” tab. Search for the unemployment rate of next group, e.g. “Unemployment Rate – White,” and click “Add data series.” Repeat for the remaining groups.
Suggested by Serdar Birinci and Ngân Trần.