The United States has a racial gap in economic opportunities, Obama said, noting that the overall U.S. employment rate is about 5 percent but it is near 9 percent for African-Americans.
Obama, the son of a white mother and African father, told the graduates to embrace their racial identity.
"Be confident in your blackness," Obama said, adding "there is no one way to be black ... There`s no straightjacket, there`s no litmus test for authenticity."
He added that "my election did not create a post-racial society."
Obama also urged the crowd not to try to prod colleges and universities into disinviting controversial speakers - something that has taken place regularly at campuses throughout the United States.
Howard University is one of about 100 historically black colleges and universities in the United States.
Obama argued that the United States and the world has progressed dramatically since 1983 when he graduated from college. He said today`s college graduates are better positioned than any other to address big outstanding problems.
"America is by almost every measure better than it was" in 1983, Obama said, noting that U.S. poverty rate is down, the number of people with college degrees is up and the number of women in the workforce have risen.
But Obama noted an area that has not improved in recent decades - the U.S. prison population - currently at 2.2 million, it is up from 500,000 in 1983.
African-American men are six times more likely than white men to be incarcerated, Obama said, and urged the graduates to lobby the U.S. Congress to pass a pending criminal justice reform measure.
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