Surprising jobs report depicts stable labor market
Nick Rummell
MANHATTAN (CN) — Catching economists by surprise, the federal employment report showed a sizeable number of jobs added last month and unemployment trending down slightly.
According to the report released Wednesday by the U.S. Bureau of Labor Statistics, the U.S. economy added 130,000 jobs in January, far more than the 55,000 jobs analysts had forecast.
The report, delayed due to last week’s partial government shutdown, also pegged the unemployment rate at 4.3%, down from 4.4% last month. BLS said winter storms and severe cold weather over the past few weeks did not affect payroll employment.
However, the report also takes the shine off the job gains for 2025, cutting the number of jobs gained to only 181,000, compared with the 584,000 jobs the agency initially reported were added over the year.
“January’s jobs report was better than expected, but it doesn’t change the bigger picture,” said Gina Bolvin, president of Bolvin Wealth Management Group, noting the downward revisions to 2025’s data “confirm growth slowed meaningfully last year.”
The sectors that showed the greatest increase in employment in January were health care, which added 82,000 jobs, and social assistance, which increased by 42,000 jobs.
The drop in federal employment continued, with public sector jobs falling by 34,000. BLS reported that since its peak in October 2024, federal government employment is down by 327,000, or 10.9%.
Many other areas, including manufacturing, saw little or no change in employment.
Unlike in recent jobs reports, revisions to previous estimates were only brought down by a pittance: December’s report was revised down by 2,000 positions and November by 15,000.
The federal employment report contrasts with other labor metrics, including last week’s private sector jobs report from payroll company ADP. That report showed only a 22,000-job gain for January, nearly all of which was concentrated in the service sector. Alternatively, manufacturing posted an 8,000-job loss, according to ADP.
An employment report from Revelio Public Labor Statistics released last week stated the U.S. economy actually lost 13,000 jobs last month, with retailers and leisure/hospitality employers seeing the biggest drops in their labor pools.
Other recent employment data were surprisingly negative. Last week’s JOLTS report showed only 6.5 million job openings in December compared with the 7.1 million expected. The 6.9 million job openings in November also were revised lower by about 218,000 positions.
The ratio of job openings to unemployed workers is now lower than at any point since March 2021. “Those who are unemployed are struggling to find work in the current labor market,” Matthew Martin, senior U.S. economist at Oxford Economics, wrote in an investor’s note last week.
The layoff rate is not much changed, which “highlights the no-hire, no-fire labor market dynamic,” Martin wrote, noting the Trump administration’s immigration policy “means hiring rates won’t need to push much higher to keep the unemployment rate stable in 2026.”