Unemployment at lowest level since 1969 as economy smashes expectations

The economy gained 517,000 jobs in December, smashing expectations, in another sign that the Federal Reserve’s interest rate hikes have yet to harm the labor market substantially.

The figures reported by the Bureau of Labor Statistics on Friday morning provide reassurance about the strength of the economy. The unemployment rate fell to 3.4%, the lowest rate since 1969.

The results of the employment report come as a big surprise for economists. The consensus estimate was that the economy would add just 185,000 jobs and unemployment would actually rise by a tenth of a percentage point rather than falling to 3.4%.

“A fundamental surprise,” Brian Marks, executive director of the University of New Haven’s Entrepreneurship and Innovation Program, told the Washington Examiner after the report was released. “Going forward, this sort of signals to the Fed to continue down its path of increasing rates.”