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January jobs report smashes expectations as payrolls grow by 130,000
The economy added 130,000 jobs in January — far more than economists had anticipated — while the unemployment rate edged down slightly to 4.3%, Labor Department data released Wednesday showed.
Still, according to updated 2025 numbers, the economy gained a paltry 181,000 jobs for the entirety of last year, revised down from the earlier reported growth of 584,000 jobs — the slowest pace of job growth outside a recession since 2003.
Nancy Vanden Houten, lead economist at Oxford Economics, cautioned in a note that the data “overstates any emerging strength in the labor market.”
“Growth in nonfarm payrolls blew past expectations, but job gains were narrowly based and concentrated in construction and health care,” Vanden Houten said. “Most other sectors posted meager job gains or job losses. The federal government continued to shed jobs as did state and local governments.”
Indeed, healthcare and social assistance together accounted for 124,000 of the jobs gained last month, continuing last year’s trend of those sectors driving what little payroll growth existed.
The government’s data comes after private numbers released last week indicated the labor market remained bruising for out-of-work Americans in January, with little in the way of new jobs. Economists surveyed by Bloomberg had estimated a median gain of about 65,000 jobs in January’s official report, though their projections varied widely: The highest saw 135,000 more jobs, while the lowest saw a loss of 10,000 roles.
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“Good news in January, but the downward revisions are huge,” economist Claudia Sahm wrote on X. “More than a million fewer jobs than previously estimated by the end of 2025. And four months last year with outright declines in payrolls.”
The government’s monthly employment situation report, which includes both the unemployment rate and payroll growth, was meant to be published last Friday before it was delayed by the brief partial government shutdown. That left market watchers and economists waiting a few extra days for what Bank of America Global Research dubbed the “Super Bowl of jobs reports” and economist Michael Madowitz of the Roosevelt Institute called #ConspiracyTheoryJobsday, since January’s report included standard revisions to the Labor Department’s data to account for unemployment insurance tax records and other adjustments.
Read more: What are jobless claims, and why do they matter?
