January 2023 had astonishing job growth. Here are some theories about why.

The latest report from the Bureau of Labor Statistics shows, well, a lot of jobs.

Amid high-profile layoffs in the technology, media and finance industries as well as continued fears of recession, the U.S. labor market continued to chug along. In the first month of the year, the U.S. economy added some 517,000 new jobs, far outpacing the 188,000 economists surveyed by Bloomberg had predicted. The unemployment rate fell to 3.4 percent — the lowest since the late 1960s.

But good news can never just be good news. It’s clear that even though we’re seeing astonishing growth, that doesn’t mean everything is smooth sailing.

Federal Reserve chairman Jerome Powell has said that low unemployment and high hiring numbers are signs of a tight labor market — something that the Fed thinks contributes to high inflation.

These amazing jobs numbers might be a bit of a statistical illusion

One speculation is that companies kept a lot of those seasonal workers around after a long period knowing that onboarding new people in a competitive market is tough. Another is that these numbers will simply get adjusted downward in coming months, and this amazing jobs report will only be in line with previous months of good-but-not-great growth.

Yes, we’re still dealing with post-covid labor market weirdness

One measure of labor force participation has shown steady improvement with the portion of the “prime” aged workforce — those between ages 25 and 54 — who are either working or looking for work. This figure jumped and now sits at 82.7 percent, the same level it was at in September 2019. This could help explain why wage growth, while still high, is slowing down to 4.4 percent over the past year, according to the measure used by the BLS in this report.

This great report probably won’t change anything when it comes to interest rates

Powell said earlier this week that the Federal Reserve is likely to continue to raise interest rates, albeit at more modest intervals than it was last year.

This latest jobs report is unlikely to change that.