OPINION (Project 21) – This past week has been brutal for the Biden administration. There was the announcement of a four-decade high inflation rate of 8.6%. There have been two weeks of new records set for the average price of a gallon of gas. And there’s increasing pessimism from financial exports like JPMorgan Chase CEO Jamie Dimon, who is warning of a coming “economic hurricane.”
The bright spot the White House continually points to is the relatively low – considering a consistently worrisome labor participation rate – unemployment rate. But members of the Project 21 black leadership network, commenting on the latest federal jobs report, say the reality is nothing for the Biden administration to try to hang its hat on.
“Those who say the May jobs report is evidence that the U.S. economy is strong likely have a bridge in Brooklyn to sell us,” said Project 21 member Michael Austin. “Despite a better-than-expected jobs gain, Americans are still on track to see their wages decline for the 14th straight month.”
Going into detail about the report, Michael noted:
The same jobs-reporting agency also revealed that labor productivity tumbled to its slowest rate since 1947. And the largest private payroll company reported the slowest job gain of the recovery. The previous week, another federal agency reported American are dipping into savings to make ends meet. The jobs report is a good one, but Americans know when they are being sold a bill of goods on their economic well-being.
The jobs report from the U.S. Bureau of Labor Statistics reported 390,000 jobs created in May for an unchanged jobless rate of 3.6%. The labor participation rate was 62.3%. The alternative U-6 measurement of all those unemployed along with those marginally attached to the workforce and underemployed was almost double at 7.1%.
“As the U.S. economy continues to reel from historic inflation rates and financial degeneration, one area of potential relief has been the monthly gains in new jobs. Where many economists have found confidence in a steady growth rate for newly added jobs, followed by a more robust labor force as restrictive COVID-19 shutdowns are uplifted, the recently released May jobs report provides little support for renewed confidence,” said Project 21 member Stone Washington. “The May 2022 jobs report revealed that private payroll job growth experienced a severe slowdown, as private organizations struggle to fill a record number of vacant positions within the most constricting labor market in decades.”
“The Biden administration is spinning the jobs report as one of their few successes as they reported that 390,000 jobs were created in May. Yet, according to ADP, only 128,000 private payroll jobs were created last month. That is far below the estimated 299,000 jobs that were expected,” added Project 21 member Derryck Green. “Compounding the administration’s economic woes, inflation – at 8.6% – is now at a 40-year high. It bears repeating that inflation functions as a tax because consumers are paying increased costs for goods and services.”
For black America, the jobs report was not a sign of relief nor an indicator of success. The overall black unemployment rate rose from 5.9% to 6.2%. For black women, the rate went up almost a total point – from 5.0% to 5.9%. Among black teens, the jobless rate skyrocketed from 15.2% to 18.3%.
Washington Center for Equitable Growth labor market policy analyst Kathryn Zickuhr told CNBC: “This growth and recovery is not reaching everyone, and it’s not going to reach everyone unless we improve our systems and policies to address those gaps and support these workers.”
“While not as strong as in April, the U.S. continues to add jobs in a post-COVID rebound. But, though jobs are being created, we are still facing a worker shortage. We are still battling record-high inflation that is affecting wage gains,” warned Project 21 member Philip Clay. “We could see a cooldown in June as the Federal Reserve looks to raise interest rates. And Americans are still bracing for yet another Biden-Harris setback – a recession.”
Talking about the recent actions by the Federal Reserve to CNBC, MetLife Investment Management Chief Marketing Strategist Drew Matus said this “might be the last bit of sunlight before the clouds get a little deeper and darker.”
Commenting further on the overall damage to the American economy that seems to be purposely overlooked by the White House, Stone continued:
It is gravely disappointing to me that private companies added only 128,000 jobs in May, accounting for less than half of the projected high 300,000-job gain that select economists predicted. This marks the lowest job gains in two years and the slowest month of recovery since the pandemic shutdown sectors of the U.S. economy in April 2020, according to ADP.
This deterioration in added jobs is even more upsetting when examining how it severely affected small businesses that possess fewer than 19 workers, as such companies absorbed the bulk of the labor drought in May with 78,000 lost jobs. By contrast, larger businesses of 500 employees or more helped to slightly balance this loss by adding 122,000 new jobs last month.
With the highest rate of inflation in 40 years, it’s no wonder that American businesses are struggling to hire new workers and stay afloat to retain existing employees while being forced to pay higher rates of expense for basic goods in the market. This should add a great deal of concern for the private sector as Americans continue to suffer under the Biden administration’s reckless spending decisions.
According to an analysis by CNSNews, the workforce’s largest gains came in the public sector – government jobs.
“AAA reported that the national average for a gallon of gas, as of June 12, was $5.01. Because of the increasing costs, it’s estimated that U.S. households are paying close to $5,000 a year on gas alone. The national average for a gallon of diesel is $5.77 – a record high,” Derryck remarked. “This significantly increases the costs to transport goods, which is passed on to the consumer.”
Derryck also made it clear that the buck needs to stop at the president’s desk:
All of this, and more, exists because President Joe Biden has no idea how to fight inflation. He’s blamed everyone – like the so-called “Putin price hike,” the meat processing industry, oil companies and everything except himself for the persistent economic chaos Americans are experiencing.