An unexpected job surge confounds the Fed's economic models

WASHINGTON (AP) — Does the Federal Reserve have it wrong?

For months, the Fed has been warily watching the U.S. economy's robust job gains out of concern that employers, desperate to hire, would keep boosting pay and, in turn, keep inflation high. But January’s blowout job growth coincided with an actual slowdown in wage growth. And it followed an easing of numerous inflation measures in recent months.

The past year's consistently robust hiring gains have defied the fastest increase in the Fed's benchmark interest rate in four decades — an aggressive effort by the central bank to cool hiring, economic growth and the spiking prices that have bedeviled American households for nearly two years.