Economists had expected a slowdown in employment. So much for that.

Job growth remains strong, unemployment is near historic lows and wage growth is robust, nearly two years after the Federal Reserve's campaign to cool the economy with higher interest rates – an outcome that has surprised policymakers and economic forecasters alike.

This time last year, Fed officials were predicting that unemployment would now have risen to 4.6 percent. Instead, it is 3.7 percent.

Central bankers have said for months that they were hearing anecdotal evidence that the labor market was starting to slow: The Fed's recent Beige Book summaries of anecdotal reports from around the country have suggested that hiring was minor or even flat in parts of the country. But while hiring cooled somewhat last year, no major gaps are visible in the actual data.

In fact, there are signs that the labor market is still very solid — something Fed Chairman Jerome H. Powell acknowledged this week.

“We have had a very strong labor market and inflation has fallen,” Mr Powell said. “So I think while a year ago we thought we needed some softening in the economy, that hasn't been the case. We are looking at stronger growth – we don't see it as a problem.”

Mr Powell and his colleagues have suggested that the labor market has returned to equilibrium as the supply of workers has recovered, something helped by a rebound in immigration and a recent jump in labor force participation. The number of vacancies in the economy has slowly decreased.

But few, if any, economists expected job growth to remain so robust at a time when higher interest rates were expected to meaningfully depress the economy. Many forecasters even predicted a full-blown recession early last year.

The question for the Fed is what it means if the labor market not only fails to slow down as expected, but actually speeds up again. While one month of data doesn't show a trend, officials will likely keep an eye on strong hiring and wage growth.

Mr. Powell said this week that robust growth in itself would not worry the Fed — or necessarily prevent it from cutting rates this year — as long as inflation continues to fall. But central bankers could become more cautious if solid wage growth and a booming economy keep consumers spending so much that it gives companies the means to keep raising prices.

“If there were real concerns that we were going to get another acceleration, they might pause,” said Kathy Bostjancic, chief economist at Nationwide. But for now, “they are now more likely to respond to a weakening in the labor market than to continued strength.”