U.S. January Jobs Report Exceeds Forecasts
U.S. January jobs report showed stronger hiring and large annual revisions, a mix that could reshape near-term Fed rate expectations.
KEY TAKEAWAYS
- Nonfarm payrolls rose 130,000 in January, topping consensus and complicating policy signals.
- Annual benchmark cut 2025 job gains to 181,000, the weakest year outside recession since 2020.
- Job openings fell to 6.5 million, reducing near-term odds of a Fed rate cut.
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The U.S. January jobs report on Feb. 11, 2026, showed stronger-than-expected hiring and a steady unemployment rate, complicating the assessment of labor-market momentum after a large downward revision to 2025 job totals.
Payroll Gains and 2025 Revisions
The Bureau of Labor Statistics’ Employment Situation release showed total nonfarm payroll employment rose by 130,000 in January, surpassing consensus forecasts of 75,000 and 55,000. The unemployment rate held steady at 4.3%. The report included an annual benchmark revision that cut 2025 total job creation to 181,000 from the previously reported 584,000, marking the weakest hiring year outside a recession since 2020 and averaging 15,000 jobs per month. The January report was delayed from its original Jan. 6 release due to a partial government shutdown.
Hiring was concentrated in health care, which added 82,000 jobs, including 50,000 in ambulatory health-care services, 18,000 in hospitals, and 13,000 in nursing and residential care. Social assistance increased by 42,000, with 38,000 in individual and family services. Construction rose by 33,000, led by a 25,000 gain in nonresidential specialty trade contractors. Federal government payrolls fell by 34,000 as deferred resignation offers from 2025 were removed, and financial activities declined by 22,000, including an 11,000 drop in insurance carriers.
Household survey data showed 7.36 million unemployed in January, down 141,000 from December, while total employment rose by 528,000 to 164.52 million. The labor force expanded by 387,000 to 171.88 million, and the labor-force participation rate edged up 0.1 percentage point to 62.5%.
Job Openings and Labor Market Slack
The Bureau’s Job Openings and Labor Turnover Summary for December 2025, released Feb. 5, showed job openings at 6.5 million, down 386,000 month-over-month and 966,000 year-over-year, with an openings rate of 3.9%. Hires and total separations both totaled 5.3 million, remaining largely unchanged. Quits held steady at 3.2 million, and layoffs and discharges were 1.8 million, also little changed.
The broader labor market showed the U-6 unemployment rate, which includes discouraged workers and involuntary part-time workers, fell to 8.0% in January from 8.4% in December. Long-term unemployed (jobless 27 weeks or more) numbered 1.8 million, up 386,000 year-over-year. Those working part-time for economic reasons declined by 453,000 from December to 4.9 million but rose 410,000 year-over-year. Discouraged workers remained near 475,000.
Unemployment rates were stable across most demographic groups: adult men 3.8%, adult women 4.0%, white workers 3.7%, Black workers 7.2%, Asian workers 4.1%, and Hispanic workers 4.7%. Teenage unemployment declined to 13.6%.
The combination of a stronger payroll gain, the steep 2025 revision, and falling job openings is likely to reduce the near-term probability of a Federal Reserve interest-rate cut, complicating the interpretation of whether the labor market is gaining momentum after a year of weak hiring.
