Experts Say We’re Nearing a Black Recession in 2026 — Why It’s Worse For Our Pockets

These days, it’s starting to feel harder and harder to stretch the dollars that you make. If you’ve spent any time on social media, you’ve probably come across lighthearted “recession indicator” posts from Black folks sharing their “struggle meal” recipes or even capturing celebrities working 9-to-5 jobs.

However, despite insecurity online about whether the United States is headed toward a recession, reports from Bloomberg and J.P.Morgan have said that the probability of an economic slump is decreasing— but that’s not necessarily true for Black folks.

On Monday, the Joint Center for Political and Economic Studies released its “State of the Dream 2026” report which combines research from Joint Center staff, fellows and external partners to deliver a report on racial economic inequality in the U.S. This year, the Center researched the signs of a Black recession and released some uncomfortable truths.

In 2025, the percentage of Black unemployment rose from 6.2% in January to 7.5% in December, with Black youth having stark ups and downs when it comes to their unemployment data. The percentage rose from 18.6% to 29.8% in November before going back down to 18.3% in December.

The report added that if prime-age Black people—folks ranging from 25 to 54—had retained the same employment rate as in 2024, there would have been an additional 260,000 people employed, with 200,000 of them being Black women. Instead, with the cut of 271,000 federal jobs, Black employees, women especially, have been impacted the most.

It’s no surprise then that the District of Columbia— where 43.4% of the population is Black, according to government census data— is considered a region at risk of a recession due to mass-funding cuts, federal layoffs and the government shutdown in October, according to Fortune.

However, employment rates are not the only reason Black people are struggling at a disproportionate rate. The “State of the Dream” report noted that tax policies, such as Trump’s Big Beautiful Bill Act, which diminished support for working-class families and made permanent tax cuts for high-income families, have left lower-income Black families struggling while wealthy households continue to see a flow of income from the maintained estate tax and from capital gains benefits.

There is also a housing disparity. The contrast between Black homeownership and white homeownership sits at a stark 30%, with only 45% of Black folks owning property and 75% of white folks owning property, per the report.

Other factors, such as weakened broadband pricing transparency, which could affect how many Black homes have access to Wi-Fi, misinformation and a lack of censorship on social media platforms and growing use of AI with a lack of safety in federal AI policy, could all point to signs of a Black recession.

Loren R. Douglass, the founder and CEO of The Harvey C. Russell Jr. Institute of International Business and Strategic Coalitions—an institute dedicated to the advancement of inclusive capitalism—told The Root that the Joint Center’s research proves bad financial times in the U.S. have always been disproportionately worse for Black folks.

“History reminds us that when America catches a cold, Black America catches pneumonia, and the State of the Dream 2026 data shows that this pattern is reasserting itself through job loss, policy retreat, and weakened safeguards.”

However, Douglass also noted that it doesn’t have to be only doom and gloom and that this moment of economic downturn could carry real possibilities for the Black community, too.

“At the same time, this moment carries real possibility. The same resilience and adaptive spirit that has sustained Black communities through every economic disruption now intersects with the transformative power of AI. While the downstream impacts of AI may disproportionately affect Black workers, that same technology also creates the opportunity to solve problems for ourselves, build new forms of Black wealth, and design institutions that endure,” he said.

So, while reports from J.P. Morgan state that the probability of a recession has fallen by 40%, the struggles for Black folks have only increased per “State of the Dream 2026.” However, per Loren R. Douglass, Black folks do have a possibility of using factors like AI to their benefit, and we’ve previously broken down his reasons why and how on The Root.