U.S. hiring exceeded expectations to begin 2026, helping to ease some concerns about the strength of the labor market. Employers added jobs at a solid pace in January, reinforcing signs of economic resilience as the Federal Reserve evaluates whether interest-rate cuts will be appropriate in the months ahead.
The January employment report was originally scheduled for release on Friday, Feb. 6, but a brief partial government shutdown delayed its publication until Wednesday.
Nonfarm payrolls rose by 130,000 in January, well above the Dow Jones estimate of 55,000, according to seasonally adjusted data released Wednesday by the Bureau of Labor Statistics.
The report also included downward revisions to prior months. November’s job gains were reduced by 15,000, from 56,000 to 41,000, while December’s total was trimmed by 2,000, from 50,000 to 48,000.
The unemployment rate was 4.3%, slightly lower than economists’ expectations of 4.4%. A more encompassing measure that includes discouraged workers and those holding part-time positions for economic reasons slipped to 8%, down 0.4 percentage point from December.
President Donald Trump seized on the stronger-than-expected employment data as evidence of economic strength, reiterating his call for the Federal Reserve to move toward lower interest rates.
Posting on Truth Social, the President said: “GREAT JOBS NUMBERS, FAR GREATER THAN EXPECTED! The United States of America should be paying MUCH LESS on its Borrowings (BONDS!). We are again the strongest Country in the World, and should therefore be paying the LOWEST INTEREST RATE, by far.”
As has frequently been the case in recent years, health care once again accounted for a significant share of job growth, adding 82,000 positions. Social assistance followed with an increase of 42,000, meaning the two sectors together represented the vast majority of overall net hiring. Construction also posted a gain of 33,000 jobs, a notable improvement after a year marked by relatively modest growth in the sector.
Not all industries participated in the expansion. Federal government employment declined by 34,000, while financial activities shed 22,000 positions.
The number of long-term unemployed, defined as individuals out of work for 27 weeks or longer, was essentially unchanged in January at 1.8 million. However, that figure is 386,000 higher than it was one year ago. Those experiencing long-term unemployment represented roughly 25% of the total unemployed population during the month.
Heather Long, chief economist at Navy Federal Credit Union, said the latest data suggests the labor market may be finding its footing after last year’s slowdown.
“The surprisingly strong job gains in January were driven mainly by health care and social assistance. But it is enough to stabilize the job market and send the unemployment rate slightly lower. This is still a largely frozen job market, but it is stabilizing. That’s an encouraging sign to start the year, especially after the hiring recession in 2025.”
The stronger-than-expected employment figures likely reinforce expectations that the Federal Reserve will remain on hold for now. Policymakers are scheduled to meet March 17–18, and markets currently anticipate that the pause in rate cuts will continue as officials assess incoming economic data.
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