DAVID GREENE, HOST:
U.S. employers added 155,000 jobs in November. The Labor Department released those numbers this morning. Although employers added fewer jobs in November than in the previous few months, the unemployment rate remained at 3.7 percent. That is a 50-year low. So what do these numbers mean? What do they tell us about the overall health of the U.S. economy? To ask those questions, let's turn to David Wessel. He's director of the Hutchins Center at the Brookings Institution and a contributor to The Wall Street Journal. David, good morning.
DAVID WESSEL: Good morning.
GREENE: So what did we learn from these numbers?
WESSEL: Well, as you said, we learned that the job market continues to do pretty darn well, though the pace of job growth has slowed a little bit. Unemployment's at a 50-year low. And it's interesting. Wages are finally, finally, finally starting to inch up. Hourly wages were up about 3 percent over the past year. That's more than enough to offset inflation. But workers are working on average fewer hours, so weekly paychecks are actually not growing. Overall, I'd say the job market is not good for everyone, but it's sure one heck of a lot better than it was just a few years ago.
GREENE: OK, but there are still people who are not going to be feeling the effects of this economy yet, and that's a theme that we've been hearing about for a while now.
WESSEL: Right. Of course. But the numbers tell us that more and more people are feeling the effects of the strong labor market. We still have a big gap between winners and losers in the economy. It's still better to have a college education than be a high school dropout. But if you look at some of the underlying details of the report, for instance, one measure that a lot of economists pay attention to is how many people are working part time but say they want a full-time job. Well, at last report, there were about 4.8 million of those. A few years ago, there were 8 million of them. So lots of people are doing better even though not everybody is.
GREENE: And what about a statistic we often talk about, which is people who are actually looking for work compared to people who have just given up and are sitting on the sidelines of the economy? I know it's something you often talk about that takes us to a layer deeper than just looking at the unemployment rate.
WESSEL: Absolutely. The headline unemployment rate, the one that we all talk about, only counts people who are telling the government, yes, I'm looking for a job in the last several weeks and I didn't find one. But there are a lot of people who are discouraged workers or might be on disability or might otherwise be on the sidelines of the economy, and another encouraging thing is there are fewer of those. So economists like to look at people in the prime working ages of between 25 and 54. A few years ago, 25 percent of those people, men and women, were not working - some looking for work, some not. Today, it's only 20 percent - still high but it's definitely moving in the right direction.
GREENE: OK. Just putting all of these pieces together, it is sounding like a generally optimistic outlook with some caveats. Is that safe to say? I mean, the economy is looking pretty good?
WESSEL: Well, remember; everything I told you, we're kind of looking in the rearview mirror. So the economy is looking pretty good now, and it's looking much better than it did a few years ago. The question really now is can this last? And there are some clouds on the horizon. The stock and bond markets are uneasy about the outlook. The global economy's slowing down. The benefits of the tax cuts will wear off. There's the trade war. We really can't keep adding jobs at this pace because we simply don't have enough workers. So the outlook is a little cloudy, but for now, things are really good.
GREENE: And what about inflation? I know the Fed is often interested in inflation. You said that there are some things that are offsetting that risk. But could that become a problem?
WESSEL: It could. The question is, if unemployment goes too far, do wages shoot up, then prices, then the Fed slams on the break by raising interest rates? But for now, inflation is really, really slow. It's not even at the Fed's 2 percent target consistently.
GREENE: Always making sense of the economic numbers for us, David Wessel, director of the Hutchins Center at the Brookings Institution and a contributor to The Wall Street Journal and most importantly for us a frequent voice on our program. David, thanks a lot.
WESSEL: You're so welcome. Transcript provided by NPR, Copyright NPR.