By CultureBanx Team
- Consumer prices surged 8.6% in May to a 41 year high
- 60% of Black small business owners have increased the prices for products or services
The country’s financial health doesn’t seem to be turning a corner as the federal government released data indicating that inflation rose at a pace not seen in more than four decades. Consumer prices surged 8.6% last month from 12 months earlier, faster than April’s year-over-year surge of 8.3%. Even though the unemployment rate nationwide is falling, it stands at 6.2% for the Black community, which is the highest for any ethnic demographic. Price increases affected a range of goods from gas, food and other necessities jumped in May, giving American households no respite from rising costs, and all of this could further stagnate the economic recovery for people of color.
Why This Matters: Black consumers and business owners are also getting hit hard by inflation. The latest figures dashed hopes that the worst of inflation, which has spiraled out of control in the last year, was behind us with low unemployment and strong jobs numbers stoking some optimism that the worst of inflation has passed. However, with gasoline prices up 50% year-over-year, rent prices having increased by 31%, and food prices rising at their steepest rate in more than 41 years during the same period, the economy was dealt a cold dose of reality.
Census data shows that there are more than two million Black-owned businesses in the United States. Newly released survey from Goldman Sachs found that 60% of Black small business owners have increased the prices for products or services in comparison to 68% of an overall population of business owners.
What’s Next: For an economy finally starting to roar back from the pandemic recession, higher inflation poses a major potential risk. Since inflationary pressures are still coming from the supply side, which the Fed cannot control, what matters most is how long these higher prices will actually last.
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