(SPONSORED) — The unemployment rate in the United States is at historical lows, but does that mean all is well in the job market? Tatiana Bailey, Director of Data Driven Economic Strategies looks into the numbers.

Last week was an interesting one for economists said Bailey, there were big surprises in the jobs data that was released just when the Federal Reserve thought that the labor market would continue to cool. Job openings and employment levels surged, translating to an unemployment rate of 3.4%, a rate not seen since 1969 according to Bailey.

“All you have to do is look at the sheer number of working-age people in the U.S. which is drastically lower now than it has been in past decades,” said Bailey

According to Bailey, in terms of job postings, estimates for December were around 10 million job openings, instead, there were 11 million openings. Job openings have been elevated since the beginning of 2021, partially due to the pandemic according to Bailey.

Bailey said job openings did come down last spring, leading to the assumption the cooling trend would continue. However, the end of 2022 shows a labor market where employers continue to struggle to find the workers they need.

Bailey explains this is due to a combination of retirees, a lower labor participation rate, lower international legal immigration, and childcare costs. Additionally in business surveys, employers are hesitant to let go of workers because they have had such a hard time finding or keeping them in the first place.

Estimates for the increase in employment levels in January were around 180,000 instead it was an increase of 517,000. Bailey said the gains were across multiple agencies. Bailey however wants to mention a few caveats.

One, Bailey guesses future data releases will not be as drastic as recent reports because as the economy continues to cool down so will labor market data.

“I will say however, this will likely not translate into the high unemployment rates that we’ve seen in past recessions,” said Bailey.

The other is that the Federal Reserve will have to keep interest rates elevated for the remainder of 2023. So Bailey says to avoid carrying a balance on credit cards if you do not have to.