WASHINGTON (NEXSTAR) — President Joe Biden took a victory lap Friday after new federal data showed another month of strong job growth, the question about what that means for inflation remains.

The report shows the U.S. added more than 500,000 jobs in January, with particularly strong growth in the restaurant, retail and construction industries. The national unemployment rate declined to 3.4%.

“The last time the unemployment rate was that low was May of 1969,” Biden said.

He said the robust jobs report shows his economic agenda is working.

“It makes crystal clear what I’ve always known in my gut: These critics and cynics are wrong,” he said.

But what remains to be seen is whether the job gains will hurt the Federal Reserve’s efforts to bring down inflation. Bank of America economist Ethan Harris said it certainly won’t help.

“It’s too much of a good thing, frankly. … I really think we need to see a significant cooling down to get inflation under control,” Harris said. “The reality is there’s a balancing act that goes on and right now we have too hot a job market.”

But Daniel Zhao, an economist with Glassdoor, said the gains are still good news.

“The labor market is healthy overall,” he said. “Now it’s incumbent on inflation to come down enough while the labor market is still resilient.”

Earlier this week, Federal Reserve Chairman Jerome Powell said he remains optimistic about the economy overall.

“I continue to think there’s a path to getting inflation back to 2% without a really significant economic decline,” he said.

He said the Fed will continue to raise interest rates until that goal is met.