Wholesale prices rose 0.7 percent in May, down sharply from the 1.3 percent surge in April, the Labor Department reported yesterday. But government economists found little solace in the apparent slowdown.
The department also reported that the May unemployment rate edged up from 6.0 to 6.1 percent an increase economists say is insignificant. Total employment rose by 310,000, but the overall labor force rose even more.
Yesterday's reports are likely to have little effect on the Carter administration's economic policies, which have shifted in recent months from a fight against unemployment to an attack on inflation.
But some top administration economists fear that despite the current surge in prices, economic growth could slow substantially in the months ahead and that unemployment could start rising by next winter.
The entire slowdown in the wholesale price index resulted from a reduction in the rate of increase in food prices. They rose 0.5 percent in May, compared to 1.9 percent in April.
John Layng, top price analyst for the Bureau of Labor Statistics, said food prices were checked the first week in May and that since then many food prices have risen.
He also noted that nonfood prices, from cars to machinery, rose more in May tha in April. Although four months of sharply rising food prices have led the jump in the cost of living this year, they are a less reliable indicator of underlying movements in the economy than prices of industrial goods.
Increases in items like cars, oil, and business equipment tend to be permanent and become imbedded in the overall price level. Layng said that if unusual price increases in jewelry in both April and May are factored out, inflation in nonfood fininshed goods increased from 0.6 percent in April to 0.7 percent in May.
But if economists found little to rejoice over in the May wholesale price report, the Carter administration was encouraged by a statement yesterday from the president of the 725,000 member Retail Clerks International Union, calling for support of President Carter's voluntary program to strongest union endorsement Carter's program has received. William H. Wynn said that while union wages are not the cause of "our current inflation," increasing wages "and their psychological impact are as surely a contributor to that inflation sprial as are wage earners its victim."
But Wynn did not say he would ask union members to accept wage increases smaller than they received over the last several years, which is the goal of Carter's anti-inflation program. Instead, he said the leadership of the retail clerks union would urge members to seek contracts that keep them abreast of inflation and that guard against decreases in real income.
Carter's chief inflation adviser, Robert S. Strauss, called Wynn's statement "an important step in our efforts."
The slight increase in the unemployment rate last month occurred because the rise in persons seeking work outstripped the rise in persons with jobs.
Total employment increased 310,000 to 94.1 million, while the size of the labor force rose by 477,000 to 100.3 million. It was the first time the labor force had exceeded 100 million persons.
Robert L. Setin, assistant commissioner of labor statistics, said the entire increase in unemployment last month took place among adult women, as more and more women continue to seek jobs.
He noted that the average work week declined by 0.3 hours between April and May. "It is possible that hours of work had been lengthened in some firms in March and April to make up for earlier production slowdowns caused by the unusually cold weather and the long coal strike."
The unemployment rate for adult women rose from 5.8 percent to 6.3 percent last month, while the unemployment rate for adult men stayed at 4.2 percent. The black unemployment rate rose from 11.8 percent to 12.3 percent, with nearly all the increase among women. The black teen-age unemployment rate, which fell in April, rose from 35.3 percent to 38.4 percent, near where it has been stuck for the last Year.
The Labor department said that its index of partially processed goods, in May, about the same as in most months of the year, but that crude materials prices rose only 0.3 percent after steep rises most of the year, in the 2-to-3 percent range.
Layng said that the slowing in crude price increases could be good news if it continues, but he noted that declining productivity and rising wages could will off set any slowing of materials prices.
Wholesale beef prices registered a small decline in the first week of May, according to Labor Department figures. But administration officials do not expect those prices, which rose 6.6 percent at the retail level in April, to show a sustained slowdown until at least the end of this month.