The May jobs and unemployment report released today shows a strong economy under the Biden Administration, with some of the best results in half a century. The federal Bureau of Labor Statistics (BLS) reported that 272,000 jobs were created in May, beating most expectations. Unemployment increased slightly from 3.9% to 4%, but this small change is not statistically significant. President Biden noted that unemployment has been at or below 4% for 30 months, the longest stretch in 50 years.
Several sectors saw job growth in May, including health care, leisure and hospitality, and professional services. Wages also continued to rise, with average hourly earnings increasing by 4.1% over the past 12 months. While some may worry about higher wages leading to inflation, experts believe that structural factors in supply chains, housing, and pricing by companies are the main drivers of inflation. Low-wage workers have seen strong wage gains in recent years, with real wages growing by 12.1% between 2019 and 2023, according to the Economic Policy Institute (EPI).
Despite the positive trends in wage growth, there are still concerns about Black unemployment, which increased to 6% in May. Black employment rates tend to lag behind those of whites due to historic discrimination, and can be an early signal of economic weakness. However, tight labor markets during Biden’s presidency have helped reduce the gap between Black and white unemployment rates, and the administration has been actively working to address racial disparities in employment and society.
Many economists had predicted a recession by now, but Biden’s economic policies have been successful in sustaining growth and benefiting lower-wage workers and struggling regions of the country. While there may be some slowdown in job and wage growth in the future, intelligent policy choices can help avoid downturns. Economists like James K. Galbraith argue that both growth and recession are driven by policy decisions, and Biden’s focus on equitable growth has been reflected in the positive job and unemployment numbers released today.
