San José, CA – On Friday, May 8, the Bureau of Labor Statistics or BLS, which is under the federal Department of Labor, released their monthly job market report for the month of April. The report was mixed, with strength shown by businesses while households showed weaknesses, reflecting the growing polarization in the economy.

The employment report, based on a survey of businesses, was strong relative to the weak hiring in 2025, with 115,000 new jobs created. There were still pockets of weakness, with government jobs declining by 8000, making April the seventh month in a row of job losses by government workers. Manufacturing also lost jobs, down by 2000 jobs.

However, the survey of households showed more weakness, with the labor force participation rate declining by 0.1%. Without this decline, the unemployment rate would have gone up. The unemployment rate was also held down by a big jump in self-employed workers, many of whom, like rideshare drivers, are really a new type of temp workers. Last, but not least, the broadest measure of unemployment, which includes people who gave up looking for work and people working part-time who can’t find full-time jobs, rose to the highest this year, at 8.2%.

Workers’ compensation, including wages, benefits and taxes paid by the employer, rose 3.1% in the first three months of the year (January to March) according to another BLS report issued Thursday, May 7. But prices rose even faster, meaning that real compensation, or the purchasing power of workers’ wages and benefits, actually fell by one half of one percent, or 0.5%, during these same three months.

This meant that the share of total output in the economy that goes to workers was only 54.1% in the first quarter, the lowest since these records began almost 80 years ago, in 1947. With more of the share of the economy going to corporate profits, rent, interest and small business income, it is no wonder that more and more people feel that the rich are getting richer, and the poor poorer.

The growing divide between haves and have-nots can also be seen in the contrast between the latest Consumer Sentiment report by the University of Michigan and the booming stock market. The Consumer Sentiment report, which covers the period of April 21 to May 4, fell to an all-time low of 48.2. This drop reflected consumers’ expectation of inflation to rise. Expectations are that inflation will jump over the next year from 3.3% over the last 12 months to 4.5% over the next 12 months. This will further reduce the purchasing power of workers’ wages.

In contrast, the stock market, as measured by the broad S&P 500 Index, is at an all-time high. The stock market is being driven by corporate profits and the fast-growing wealth of those at the top. In particular, semiconductor chip stocks have risen to about 15% of total stock market value, even higher than during the 2000 dot-com stock market bubble.

How have sales and business profits held up with so many working-class households struggling amid soaring gasoline prices? On one hand, more and more consumer spending is based on high-income households as the economic divide in terms of income and wealth continues to grow. On the other hand, lower and middle income households, mainly the working class, are borrowing more to make ends meet. The Federal Reserve report on consumer credit, released yesterday, May 7, shows that credit card borrowing increased at the fastest rate since the last bout of inflation, in 2022.

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