The Federal Reserve left interest rates where they were on Wednesday, three weeks after a jobs report showed Black unemployment rising a full point in a single month. Two of the 12 voters on the rate-setting committee wanted to raise rates instead.
The Bureau of Labor Statistics put the Black unemployment rate at 7.0% in September, up from 6.0% in August. For white workers the rate was 3.6%, and it barely moved. Employers added only 29,000 jobs nationwide, and the overall rate stood at 4.2%. Black workers are nearly twice as likely as white workers to be looking for a job and not finding one, and the gap widened in one month.
The committee voted 10-2 to hold the federal funds rate at 3.75% to 4.00%, according to the Fed’s statement. Governor Lisa Cook and Beth Hammack, president of the Cleveland Fed, voted to raise it by a quarter of a point. Cook is the first Black woman to sit on the Fed’s board of governors. President Donald Trump tried to fire her last year over mortgage fraud allegations she denies, and she remains on the board.
The dissents show where the committee’s worry sits. The Fed’s mandate has two halves, stable prices and maximum employment, and the two members who broke from the majority were voting against inflation. The Fed raised rates last month for the first time since 2023, as The Guardian reported, and the committee has not said it expects to cut.
Higher borrowing costs work by cooling the economy. Slower hiring is how that cooling shows up, and Black workers have historically been the first to lose jobs when hiring slows and the last to get them back. A rate that stays high or rises is a bet that inflation is the larger danger. The September report suggests the cost of that bet is already landing on Black households.
The decision came six days before the midterm elections, with the economy among the main issues on the ballot. The next jobs report, for October, will show whether the September jump in Black unemployment was a one-month swing or the start of a trend.
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