May Jobs Report: Modest Growth in the Midst of Sticky Inflation

By Bernard E. Anderson, PhD
Whitney M. Young Professor Emeritus,
The Wharton School of the University of Pennsylvania
Chief Economic Advisor, National Urban League

With an unexpectedly high 292,000 jobs produced in May, the nation’s economy remains on the path of modest growth in the midst of sticky inflation, with a better balance between job openings, hiring, and labor turnover.

Both Black and white employment declined, with the unemployment rate edging up to 4% after remaining below that level for 30 straight months. But while Black unemployment grew, to 6.1 %, white unemployment modestly declined, leaving the white unemployment rate essentially unchanged at 3.5%. That pattern of adjustment increased the Black/white unemployment disparity, but at 1.74, the ratio remains below the persistent 2:1 ratio. Wages, measured by average hourly earnings rose 0.4% during the month, and 4.1% year-over-year. While wage growth continues to outpace inflation, higher prices remain a significant concern. Lower-income adults were more likely to face material hardships, including not paying all bills in full, sometimes not having enough to eat, and skipping medical care because of cost. The trend in post pandemic economic activity altered the racial labor market disparity. Over the past year, tight labor markets and strong job creation lowered the Black unemployment rate and narrowed the Black/White unemployment gap. In the last quarter, the average ratio was 1.62, notably below the persistent 2:1 ratio before the pandemic. Further progress in closing the gap might be constrained by efforts to eliminate diversity, equity, and inclusion policies and practices. Regrettably, opposition to DE&I has been generated in part by recent decisions and comments by members of the U.S. Supreme Court.

While market driven trends in economic activity contribute to greater economic equality, the implementation of management policies on DE&I is essential to eliminate racial and gender discrimination in employment, income, and wealth. That is a sine qua non for aligning the practice of American with the promise of America.