Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Sources
- Consumer survey data
- Consumer Expenditure Survey
- Advertising
- Abbreviations and terms
- Abbreviations
- Terms
- Generations
Executive Summary
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- Contributing factors to Black buying power
- Black household income and buying power
- Changes in income and spending
- Saving in the Black household
- Attitudes toward money, primary financial concerns, and risk
- Banking and investment services owned
- Loans held
- Card ownership and usage
- Attitudes towards financial decision making, sources of advice
- Insurance products
- Health insurance
- Other insurance
- Retirement planning
Insights and Opportunities
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- Community banks and credit unions should maximize current opportunity
- Automatic sign-up for employer 401(k)s
- Increased savings offer new opportunities
- Spending vs. saving—offer flexibility
- The Walmart factor—more to come?
Inspire Insights
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- Trend: My Financial Service
- What’s it about?
- What we've seen
- Specifics
- Implications
- Trend: Life After Debt
- What’s it about?
- What we've seen
- Specifics
- Implications
Contributing Factors to Black Buying Power
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- Key points
- African Americans contributing less to “graying of America”
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- Figure 1: U.S., Black population, by age, 2004-14
- Slight decline in household size
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- Figure 2: Average household size, by Hispanic origin/race of householder, 2001 and 2008
- Figure 3: Households, by number of persons in the household—Hispanics vs. non-Hispanics, 2009
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- Figure 4: Households, by number of persons in the household—Black vs. all, 2009
- Figure 5: Black households and all households, by presence and ages of children, 2009
- Number of household earners
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- Figure 6: Number of Black household earners, by household income, December 2009
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- Figure 7: Number of Black household earners, by age, December 2009
Black Household Income and Buying Power
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- Key points
- Income distribution
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- Figure 8: Household income distribution for all households and Black households, 2008
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- Figure 9: Household income distribution, by race/Hispanic origin of householder, 2008
- Median income
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- Figure 10: Median household income, by race/Hispanic origin of householder, 2008
- Income of Black households versus total U.S. households
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- Figure 11: Increase in percentage of Black households with incomes of $50K or more versus total U.S. households, 2003 and 2007
- Black vs. White income
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- Figure 12: Black household income as a percentage of White household income, 1998-2008
- Purchasing power
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- Figure 13: Purchasing power, by race/Hispanic origin, 2008
- Figure 14: Top ten states with the largest share of Black buying power, 2008
Changes in Income and Spending
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- Key points
- Impact of the recession—overview
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- Figure 15: Adults vs. older Black adults and the recession, 2010
- Low-income Black adults facing declines in household income
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- Figure 16: Changes in Black household income, by household income, December 2009
- College educated Black households less likely to see income decline
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- Figure 17: Changes in Black household income, by educational attainment, December 2009
- Excessive spending among Black women may be slowing
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- Figure 18: Blacks’ attitudes toward spending, by gender, December 2009
- Impact of the economy on Black households
- Focus is frugality, regardless of household income
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- Figure 19: Impact of the current economy on Black households, by household income, December 2009
- Financial behavior is impacted by the presence of children in the home
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- Figure 20: Impact of the current economy on Black households, by presence and number of children in the household, December 2009
- Financial outlook
- Regardless of income, Black households are spending less
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- Figure 21: Blacks’ attitudes toward financial situation, by household income, December 2009
- Less optimism among post-graduate level African Americans
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- Figure 22: Blacks’ attitudes toward financial situation, by educational attainment, December 2009
- African Americans have a positive economic outlook
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- Figure 23: Blacks’ attitudes towards whether they are better or worse off than five years ago, 2007 and 2009
Saving in The Black Household
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- Key points
- Monthly saving habits
- Amount saved is reflective of income level
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- Figure 24: Monthly savings of Black households, by household income, December 2009
- Households with children save more than those without children
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- Figure 25: Monthly savings of Black households, by presence and number of children in the household, December 2009
- Ownership of savings vehicles
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- Figure 26: Ownership of savings vehicles, by race/Hispanic origin, April 2008-June 2009
- Changes in saving habits
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- Figure 27: Changes in saving habits in the Black household, by household income, December 2009
- Save or splurge?
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- Figure 28: Save or splurge, by household income, December 2009
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- Figure 29: Attitudes towards money, by gender, April 2008-June 2009
- Saving for what?
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- Figure 30: Saving habits of Black households, by educational attainment, December 2009
Attitudes Toward Money, Primary Financial Concerns and Risk
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- Key points
- Attitudes toward money
- Black adults are less averse to being in debt
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- Figure 31: Attitudes toward money, by race/Hispanic origin, April 2008-June 2009
- Higher income Black households are among the underbanked
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- Figure 32: Attitudes toward money, by household income, April 2008-June 2009
- Younger Black adults more trusting of banks
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- Figure 33: Attitudes toward money, by age, April 2008-June 2009
- Primary financial concerns
- Concerns about retirement savings increase with household income
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- Figure 34: Blacks’ primary financial concerns, by household income, December 2009
- Parents are more likely to use credit cards
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- Figure 35: Blacks’ primary financial concerns, by presence and number of children in the household, December 2009
- Black men and women are economizing
- Putting family before self
- Giving and receiving financial support
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- Figure 36: Financial behavior and attitudes of Black adults, by gender, December 2009
- Younger Black adults uninterested in acquiring debt
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- Figure 37: Financial behavior and attitudes of Black adults, by age, December 2009
- Attitudes toward risk
- Black investors less risk-averse
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- Figure 38: Attitudes toward finances, advice and risk, by race/Hispanic origin, April 2008-June 2009
- Age determines risk acceptance
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- Figure 39: Blacks’ attitudes toward finances, advice and risk, by age, April 2008-June 2009
Banking and Investment Services Owned
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- Key points
- Investment products owned
- Investment products owned, Blacks vs. others
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- Figure 40: Investment ownership, by race/Hispanic origin, April 2008-June 2009
- Investment products owned by Black adults
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- Figure 41: Investment ownership by Black adults, by household income, April 2008-June 2009
- Credit monitoring, annuities and CDs—ownership and intent to have
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- Figure 42: Financial products owned by Black households, by household income, December 2009
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- Figure 43: Financial products owned by Black households, by educational attainment, December 2009
- Banking products
- Blacks’ relationship with banking services
- Banking products owned, Blacks vs. others
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- Figure 44: Banking/investment services owned, by race/Hispanic origin, April 2008-June 2009
- Black banking/investment services owned
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- Figure 45: Banking/investment services owned by Black households, by educational attainment, April 2008-June 2009
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- Figure 46: Banking/investment services owned by Black households, by household income, April 2008-June 2009
Loans Held
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- Key points
- Half of all Black adults do not have loans
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- Figure 47: Loan ownership, by race/Hispanic origin, April 2008-June 2009
- Black adults more likely to have auto loans vs. mortgage
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- Figure 48: Loan ownership among Black adults, by household income, April 2008-June 2009
- Education loans most likely among Black adults aged 18-24
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- Figure 49: Loan ownership among Black adults, by age, April 2008-June 2009
Card Ownership and Usage
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- Key points
- Debit cards
- Lower levels of ownership of debit cards by African Americans
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- Figure 50: ATM/debit card ownership, by race/Hispanic origin, April 2008-June 2009
- Black women have higher ownership of ATM/debit cards
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- Figure 51: ATM/debit card ownership, by gender, April 2008-June 2009
- Black adults are frequent users of ATM/debit cards
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- Figure 52: ATM/debit card usage frequency, by race/Hispanic origin, April 2008-June 2009
- The higher the income, the higher the usage of ATM cards
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- Figure 53: ATM/debit card usage frequency, by household income, April 2008-June 2009
- Credit cards
- Outstanding credit
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- Figure 54: Consumer credit outstanding, percentage change, 2005-09
- Credit card ownership
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- Figure 55: Credit card ownership, by race/Hispanic origin, April 2008-June 2009
- Credit card ownership higher among Black women
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- Figure 56: Ownership of credit cards by Black adults, by gender and age, April 2008-June 2009
- Attitudes about credit card debt by Black consumers
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- Figure 57: Attitudes towards credit card debt by Black adults, by household income, December 2009
- Educational attainment is not a guarantee of financial security
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- Figure 58: Attitudes towards credit card debt by Black adults, by educational attainment, December 2009
Attitudes Towards Financial Decision-making, Sources of Advice
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- Key points
- Black households less engaged in financial services and planning
- Overview
- The unbanked
- Unbanked by choice
- High-risk customers
- Attitudes toward use of financial services
- By household income
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- Figure 59: Attitudes toward use of financial services by Black adults, by household income, December 2009
- By educational attainment
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- Figure 60: Attitudes toward use of financial services by Black adults, by educational attainment, December 2009
- Sources of financial advice
- Financial literacy is the key to success for Black investors
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- Figure 61: Blacks’ sources of financial advice, by household income, December 2009
- Educational attainment is a factor in seeking financial advice
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- Figure 62: Blacks’ sources of financial advice, by educational attainment, December 2009
Insurance Products Overview
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- Ownership of insurance products other than those provided by an employer
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- Figure 63: Insurance products (other than that offered by an employer) owned by Black households, by household income, December 2009
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- Figure 64: Insurance products (other than that offered by an employer) owned by Black households, by age, December 2009
- Ownership of health insurance—total
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- Figure 65: Ownership of health insurance (empoyer provided and private), by race/Hispanic origin, April 2008-June 2009
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- Figure 66: Black household ownership of health insurance (empoyer provided and private), by household income, April 2008-June 2009
- Importance of being well insured—home and life insurance
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- Figure 67: Importance of being well insured—home and life insurance, by race/Hispanic origin, April 2008-June 2009
Health Insurance
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- Key points
- Expenditure on health insurance
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- Figure 68: Average annual expenditures on health insurance, by Black and other races, 2008
- Black households spend more of their healthcare dollars on health insurance
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- Figure 69: Distribution of average annual healthcare expenditures, by Black and other races, 2008
- Changes in Black healthcare expenditures
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- Figure 70: Average annual Black household expenditures on healthcare, 2002-10
- Figure 71: Changes in spending by Black households for medical expenses, by household income, November 2009
- Sources of health insurance
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- Figure 72: Means of obtaining health insurance, by race/Hispanic origin, April 2008-June 2009
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- Figure 73: Black households’ means of obtaining health insurance, by household income, April 2008-June 2009
Other Insurance
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- Key points
- Life insurance
- Black adults are less likely to own life insurance
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- Figure 74: Ownership of life insurance, by race/Hispanic origin, April 2008-June 2009
- Life insurance companies are targeting older Black consumers
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- Figure 75: Ownership of life insurance by Black households, by age, April 2008-June 2009
- Auto insurance
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- Figure 76: Ownership of auto insurance, by race/Hispanic origin, April 2008-June 2009
- Figure 77: Ownership of auto insurance by Black households, by household income, April 2008-June 2009
- Homeowner’s insurance
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- Figure 78: Ownership of home insurance, by race/Hispanic origin, April 2008-June 2009
- Figure 79: Ownership of home insurance by Black households, by household income, April 2008-June 2009
- Disability and long-term care insurance
Retirement Planning
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- Key points
- A different kind of retirement
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- Figure 80: Attitudes toward individual’s responsibility for retirement planning, by race/Hispanic origin, April 2008-June 2009
- As incomes increase, so does the belief in personal responsibility
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- Figure 81: Attitudes toward individual’s responsibility for retirement planning by Black adults, by household income, April 2008-June 2009
- Younger Black adults assume more personal responsibility for retirement
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- Figure 82: Attitudes toward individual’s responsibility for retirement planning by Black adults, by age, April 2008-June 2009
- Retirement savings
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- Figure 83: Ownership of 401(k) accounts, by race/Hispanic origin, April 2008-June 2009
- Ownership of pensions increases with household income
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- Figure 84: Ownership of 401(k) accounts by Black adults, by household income, April 2008-June 2009
Cluster Analysis
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- Middle-income, debt-averse (MIDA).
- Demographics
- Characteristics
- Opportunity
- Overwhelmed and just getting by (OJGB)
- Demographics
- Characteristics
- Opportunity
- Optimistic savers (OS)
- Demographics
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 85: Black financial clusters, December 2009
- Figure 86: Attitudes toward financial situation, by Black financial clusters, December 2009
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- Figure 87: Financial behavior and attitudes, by Black financial clusters, December 2009
- Figure 88: Saving habits, by Black financial clusters, December 2009
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- Figure 89: Use of financial services, by Black financial clusters, December 2009
- Figure 90: Attitudes toward financial situation, by Black financial clusters, December 2009
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- Figure 91: Attitudes towards the impact of the current economy, by Black financial clusters, December 2009
- Figure 92: Ownership of insurance and financial products, by Black financial clusters, December 2009
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- Figure 93: Sources of financial advice, by Black financial clusters, December 2009
- Figure 94: Primary financial concerns, by Black financial clusters, December 2009
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- Figure 95: Perception of credit card debt, by Black financial clusters, December 2009
- Demographics:
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- Figure 96: Black financial clusters, by gender, December 2009
- Figure 97: Black financial clusters, by age, December 2009
- Figure 98: Black financial clusters, by household income, December 2009
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- Figure 99: Black financial clusters, by education, December 2009
- Figure 100: Black financial clusters, by marital status, December 2009
- Cluster methodology
Marketing and Advertisements
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- Key points
- Television commercials
- Narrow range of choices in financial services advertising
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- Figure 101: Colonial Penn Life Insurance, Pennies a Day—Spare Change, January 2008
- Figure 102: The Money Tree, New Apartment, June 2008
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- Figure 103: The Cash Store, Carol, October 2007
- Some companies are producing relevant, informative commercials
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- Figure 104: ING Financial, Clark, February 2010
- Figure 105: Allstate Insurance, Lessons Learned, May 2009
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- Figure 106: E-Trade, Laughing Babies, February 2009
- Print ads
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- Figure 107: Wells Fargo, 2009
- Figure 108: Prudential Financial, Retirement Red Zone, 2010
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- Figure 109: MetLife, Generation to Generation, 2009
- Figure 110: State Farm, Honeymoon, 2010
U.S. Black Population
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- Key points
- U.S. population by race
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- Figure 111: Population, by race/Hispanic origin, 2004-14
- Figure 112: Population, by race, 1970-2020
- Figure 113: Asian, Black, and Hispanic populations, 1970-2020
- U.S. Black population
- Black population by age
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- Figure 114: U.S. Black population, by age, 2004-14
- U.S. Black geographic concentration
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- Figure 115: Black geographic concentration, by region, 2007
- Figure 116: States with the highest share of Black residents, 2008
- Black metros
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- Figure 117: Metropolitan status of Black households, 2001 and 2007
- Figure 118: Top ten metropolitan areas with the largest number of Black residents, 2006-08
Appendix: Trade Associations
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