Unemployment numbers are near a 57-year low. Why doesn't it feel like it?

On a numbers level, the U.S. economy is strong. On Thursday, GDP came in at a healthy 3.4%, and the U.S. Department of Labor reported weekly jobless claims of 194,000 — that figure is near a 57-year low.

At the same time, numbers don't always translate to how people feel about the economy.

Tara Sinclair, chair of the economics department at George Washington University, joined “Marketplace” host Kai Ryssdal, to talk about the truth behind the headline numbers. An edited transcript of their conversation is below.

Kai Ryssdal: So my executive producer and I were talking this morning, and she said to me, "You know, if I went outside and stopped 10 people on the street and told them about the data, [that] GDP is growing, [the] job market — while, you know, weird — is reasonably strong, they would look at me like I had three heads." And I guess that's the question I throw to you: What is going on?

Tara Sinclair: It is a wild time in the labor market because, on the one hand, as you point out, from many vantage points, the data look good. The claims, the data this morning, continue to be remarkably low. The unemployment rate remains historically low. Layoffs — despite the news about layoffs — also really low. But then, if you look at people trying to find a new job or thinking about changing jobs in order to get a higher wage, those numbers aren't looking so good, and that's probably what people are feeling.

Ryssdal: Do you suppose this lasts? I mean, it does seem we've been saying low-hire, low-fire for a very long time, and I guess I wonder what you think the short-, medium-term issue is.

Sinclair: Honestly, in many ways, I am somewhat heartened by its persistence, because for a while there, I thought that with the layoffs being low, but hires also being low, that the next step might be the shoe drops and layoffs go up. But we haven't seen that, and so it's kind of the better scenario there. But we'd really like to see an even better economy where firms feel comfortable hiring and people are changing jobs and getting raises and things like that.

Ryssdal: Right. So the labor market, meh — you know, nominally fine — but meh, really in perceived reality. I want you to answer this next question without using the word inflation. Other than the labor market, why are people so cranky out there?

Sinclair: Ooh, without saying the word inflation?

Ryssdal: Without using the word inflation or rising prices.

Sinclair: What about affordability or purchasing power?

Ryssdal: OK, all right, you can do that.

Sinclair: Well, if you think about it, people are looking at their wages, and it's just not keeping up. It's not allowing them to have the the lifestyle that they are used to having, that they were expecting to have at this stage in their lives. That's both an inflation story, but also a wages story.

Ryssdal: You used the word. You realize that, right?

Sinclair: I know, I know. I couldn't help it.

Ryssdal: That's fine. We'll let you go. That actually brings me to Chairman Warsh yesterday and the Federal Reserve deciding not to do anything with interest rates, while at the same time saying, “Nudge, nudge, wink, wink, we're looking at December,” and I guess my question is, why are they waiting? Clearly, they know inflation is elevated. He said it. What's the deal?

Sinclair: Well, there's a couple of reasons. First of all, we're really close to the midterms, and the Fed is trying to not rock the boat there. And on the other hand, they did raise rates last time, and so there's a sense in which they can let that kind of take hold a little bit before they give another dose of interest rate hikes because those are painful too. And so they don't want to do more than they have to.

Ryssdal: Let's bring it back to the labor market on the way out here. He seemed, and central bankers when they have been speaking, seem to be saying, “You know, the labor market's OK generally, and we really have to worry more about inflation.” You all right with that?

Sinclair: I think so because I don't think that the Fed has the ability to affect some of these underlying issues in the labor market. They're really targeting those top line numbers, which look pretty good.