President Joe Biden has been proudly touting May’s better than expected jobs report. He seems to see it as proof of his administration strengthening the economy, but underneath the surface, the job market may actually be showing signs of slowing down, and inflation has not abated.
The Labor Department’s report for May showed that 390,000 jobs were added to economy and unemployment held steady at 3.6 percent.
The number of jobs added was higher than predicted, and the unemployment rate is the lowest it’s been since February 2020, Fox News reported.
“I know that in the face of today’s good news, a lot of Americans remain anxious. And I understand the feeling,” Biden said.
“There’s no denying that high prices, particularly around gasoline and food, are a real problem for people. But there’s every reason for the American people to feel confident we will meet these challenges. Because of the enormous progress we’ve made on the economy, Americans can tackle inflation from a position of strength,” he added.
However, when the numbers are more closely examined, the economy and job market may not be making “enormous progress.”
“Beneath the surface, however, the jobs report offered hints that the labor market is starting to cool,” the Wall Street Journal reported.
The number of jobs may have increased, but that does not mean that the number of laborers increased as well.
In May, only about 330,000 people joined the workforce, and the participation rates remained below pre-pandemic levels, the Wall Street Journal reported.
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The labor participation rate was at 62.3 percent in May, which is still significantly down from pre-pandemic numbers.
In December 2019, just before the pandemic began, labor force participation was 63.2 percent, the Bureau of Labor Statistics reported.
Wages also grew 5.2 percent in May since last year. Wage growth is a sign of labor shortages.
This also signals that “demand vastly exceeded the supply of available workers,” the Journal reported. That is not a good situation to be in, despite Biden’s blithe confidence in a recovering economy.
Aside from the signs of a cooling labor market, there is still the overall crisis of inflation staring Americans and the Biden administration in the face.
Biden may be happy over the jobs report, but that does not mean that gas, groceries, rent and the general cost of living are any cheaper.
The national gas price average keeps rising and is now at $4.92, AAA reported.
There are no states in the whole country where the gas average in under $4.
The cost of food is also rising. It rose so dramatically through April and the beginning of May that the USDA actually had to increase its inflation estimates, Farm Journal Magazine reported.
Across the whole U.S. the price for basic groceries, like eggs, chicken, ground beef and bread, has continually increased in price, as NBC News has been tracking.
The price for rent and primary residences has also increased 4.8 percent thanks to inflation, Forbes reported.
Unfortunately, there is also no sign of inflation having peaked yet, Cleveland Federal Reserve President Loretta Mester told CNBC News.
That is why the Federal Reserve is trying to fight inflation with interest rate hikes. But even that has not yet proved to be working.
“I don’t want to declare victory on inflation before I see really compelling evidence that our actions are beginning to do the work in bringing down demand in better balance with aggregate supply,” Mester added.
So while Biden may be celebrating the addition of jobs in May, that does not mean that the overall situation is looking up.
Americans are still staring down the barrel of a serious economic crisis.
