After postponing the release of its January employment report due to last week’s brief and partial federal government shutdown, the Bureau of Labor Statistics (BLS) announced Wednesday that the U.S. economy added 130,000 jobs last month.
Notably, the BLS also revised its previous estimate of 584,000 total nonfarm payroll jobs added in 2025 to just 181,000, for an average of around 15,000 monthly additions.
That reduction included a combined revision of 17,000 fewer job gains in December and November, after previously trimming 76,000 jobs from initial estimates of October and November totals.
It was that type of large revision that led to the firing of the BLS head by President Donald Trump last August, leading Trump to claim poor July hiring numbers and significant revisions to prior-year estimates had been manipulated to make him and Republicans “look bad.”
The White House Council of Economic Advisers celebrated the hiring surge in social media posts Wednesday morning without mentioning the hefty revisions to last year’s totals.
“The January jobs report shows modest improvement relative to prior months,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association, in commentary shared with Scotsman Guide after the figures were released.
Accelerated hiring last month was uneven, however, as the health care sector added 82,000 positions, accounting for almost two-thirds of all reported payroll gains. The social assistance sector added 42,000 jobs and construction-related firms added 33,000.
Job losses, meanwhile, were concentrated in federal government employment, which shed 34,000 jobs, while financial activities employment lost 22,000 jobs. Wall Street firms recently pushed out their rate-cut forecasts to the middle of 2026 or later, and the latest hiring data suggests that those revisions were prescient.
“Overall, this report provides support for [Federal Open Market Committee] officials who have voted to keep rates steady for the time being,” Fratantoni noted.
Officials at the Federal Reserve voted to leave its benchmark interest rate unchanged in late January, citing stabilization in a gradually cooling labor market and inflation that remains above their stated 2% target. Government data published on Wednesday supports that decision to pause rate cuts.
Combined with the hiring surge, the unemployment rate declined to 4.3% in January, down from 4.4% in December and 4.6% in November. The jobless rate remained stable in the low-4% range throughout 2025 as declining labor supply matched declining labor demand from employers.
BLS is scheduled to release its consumer price index (CPI) for January on Friday. A February employment report is also scheduled to be released before Fed officials next convene in early March, which would contain any revisions to January’s figures.
Until future reports correct or confirm January’s job totals, Lisa Sturtevant, chief economist for multiple-listing service Bright MLS, says the housing market should remain optimistic about higher sales volumes this year while preparing for multiple scenarios.
She cited fewer job openings and rising claims for unemployment insurance as signs of continued weakening in the job market, despite January’s gains, while applauding wage gains for consumers.
Average hourly earnings for employees on nonfarm private payrolls rose 0.4% over the month, according to BLS data, to land about 3.7% higher on a yearly basis, slightly lower than the 3.8% annual gain in December.
Consumers in January continued to report dismal outlooks on the state of the job market. Fewer consumers who responded to a popular survey from The Conference Board said that jobs were plentiful, and the share of respondents who said jobs were “hard to get” increased.
“Against this confusing backdrop, the overall housing market picture does point to improvement in 2026,” said Sturtevant. “Assuming inflation held steady in January, we could see at least one rate cut during the first half of 2026, but if job growth rebounds, it is harder to see a path toward multiple rate cuts this year.”
