MICHEL MARTIN, HOST:
Now we're going to take a look at the economy here in the U.S. On Friday, we learned that the U.S. unemployment rate stands at 3.7 percent. That's a record 50-year low after U.S. employers added 155,000 jobs in November. However, the week was also full of dramatic swings in the stock market, which analysts suggest may be due to ongoing tensions between the U.S. and China over trade. To help us get a sense of what last week's events mean and what we should be watching for in the coming months, we are joined now by David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.
David, thanks so much for joining us once again.
DAVID WESSEL: It's a pleasure.
MARTIN: All right. So let's start with the pain. Last week was stressful for people watching the Dow fall hundreds of points. It was up and down all week but mostly down. And, as I understand it, U.S. stocks were worth about a trillion dollars less at the end of the week than at the beginning. What is going on here?
WESSEL: Well, you're right. It was up and down but mostly down. Stocks overall were, depending on how you measure them, down around 5 percent in a week, which is a lot. You know, one of the problems with diagnosing the stock market is that everybody has a theory, and they - you never know which ones are the right ones. But it certainly seems that, one, there is a lot of concern about the U.S. trying a trade war.
There's also some concern that maybe the U.S. economy is going to slow in 2019 or 2020, and we're going to have a recession. And maybe the Federal Reserve is going to raise interest rates too much. So I think there are a lot of things going on, and they all added up to gloom on the stock market.
MARTIN: Well, it wasn't all bad news, though. There were 155,000 jobs added. And so what does this new report about employment tell us?
WESSEL: You know, the employment report is looking in the rearview mirror. But it tells us that the economy is in very good shape. We did add a few thousand fewer jobs in November than we had in the previous months. But unemployment is, as you said, at a 50-year low. And all the other measures of the labor market are looking strong except wages.
The question going forward is, are wages about to take off? Are we going to have too much inflation? And then is the Fed going to raise interest rates and cause a recession? Or is - are we finally getting to the point where workers are going to be benefiting, and the Fed will let this go on for a while? And the market's a little confused about that, and that's contributing to the uncertainty.
MARTIN: And, finally, can I ask you, what - there are the numbers and then there's how people feel about them. How do Americans feel about the economy right now?
WESSEL: Well, if you look at the measures of consumer confidence, they're improving. People feel pretty good about the economy. But, on the other hand, you know that there are a lot of people who feel they've been left out of the benefits of globalization and technology. Many of these people voted for Donald Trump in 2016 or voted for some of the Democrats in 2018. They don't really care what happens to the stock market. But some of the same uncertainty that's driving investors to be cautious is making Americans worry. Does our government have the capacity and the tools and the willingness to fix what ails the economy for working people? And I think that's an open question.
MARTIN: That's David Wessel. He's director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.
David, thanks so much for joining us once again.
WESSEL: You're welcome. Transcript provided by NPR, Copyright NPR.