In recent weeks, stock market turmoil, plunging oil prices, and an economic slowdown in China have caused many people (including me) to worry that the US economy could be on the verge of a recession. But the latest data on the labor market, released this morning, shows no sign that the economy is in trouble.

Over the last couple of years, the economy has created about 200,000 new jobs, on average, per month. In February, the economy created 242,000 new jobs, a bit better than average.

The unemployment rate was unchanged at 4.9 percent. And that actually understates the progress of the labor market. The even better news came from a statistic called the labor force participation rate. The fraction of adults participating in the labor market — either working or looking for work — fell in the wake of the 2008 recession and has remained stubbornly low, suggesting that many of the people who lost their jobs in 2008 and 2009 dropped out of the labor market permanently.

Now that trend has finally started to turn around. A rising LFPR suggests that the demand for workers has finally become strong enough to draw workers who had left the labor market back in. As this chart makes clear, we're still a long way from repairing the damage caused over the last seven years. But the last six months shows things finally turning around.

The labor market isn't that hot, however. Earnings in February actually fell slightly after rising in January. Over the last year, average earnings have risen 2.2 percent — only slightly faster than inflation.

If these trends continue, supporters of Federal Reserve chair Janet Yellen will undoubtedly argue that they vindicate her decision to raise interest rates last December. And so far it does look like the rate hike wasn't the disaster critics feared. Still, the sluggish wage growth suggests that the hike may have been counterproductive. If the Fed had kept rates low, we might have seen an even stronger labor market, without significant inflation.