diff --git a/Lib/test/test_unicode.py b/Lib/test/test_unicode.py
index f7e7cb42648..63e10af6ba0 100644
--- a/Lib/test/test_unicode.py
+++ b/Lib/test/test_unicode.py
@@ -68,6 +68,8 @@ def test_literals(self):
         self.assertRaises(SyntaxError, eval, '\'\\Ufffffffe\'')
         self.assertRaises(SyntaxError, eval, '\'\\Uffffffff\'')
         self.assertRaises(SyntaxError, eval, '\'\\U%08x\'' % 0x110000)
+        # Test that raw mode does unicode escapes
+        self.assertEqual(r"\u0020", " ")
 
     def test_repr(self):
         if not sys.platform.startswith('java'):
diff --git a/Python/ast.c b/Python/ast.c
index 6a9658a9742..218436f2054 100644
--- a/Python/ast.c
+++ b/Python/ast.c
@@ -3231,7 +3231,7 @@ parsestr(struct compiling *c, const node *n, int *bytesmode)
             return NULL;
         }
     }
-    if (!*bytesmode && !rawmode) {
+    if (!*bytesmode) {
         return decode_unicode(s, len, rawmode, c->c_encoding);
     }
     if (*bytesmode) {