U.S. labor market gains 130,000 jobs in January as unemployment falls

"Unemployment remained little changed from December, falling slightly to 4.3% with 7.4 million people unemployed. Both of these figures are higher than they were a year ago, when the jobless rate was 4.0%, and the number of unemployed people was 6.9 million. The jobs report beat estimates; the unemployment rate fell, and the internals of the report were fine too."

"The majority of January's job gains occurred in health care (+82,000 jobs), social assistance (+42,000 jobs) and construction (+33,000 jobs). Within the construction sector, residential building construction added 300 jobs, and residential specialty trade contractors added 5,600 jobs. The majority of the sector's job gains occurred within nonresidential specialty trade contractor employment, which added 25,100 jobs."

"The federal government sector (-34,000 jobs) and financial activities (-22,000 jobs) both lost jobs during the month. The real estate sector also experienced a decrease in employment in January, losing 4,400 jobs. Like a lot of economic data recently, today's employment situation report offers a muddy picture of the health of the U.S. economy, Lisa Sturtevant, the chief economist at Bright MLS, said in a statement."

"Despite today's report, there are other signs that the labor market is weakening, including fewer job openings and rising claims for unemployment insurance. Economists say that the Federal Reserve is closely watching this labor market data. If conditions are indeed weakening, the Federal Reserve will almost certainly cut rates this year. But it is going to depend on ongoing revisions to the employment numbers, along with other labor market data and Friday's inflation report, Sturtevant said."

Unemployment edged down to 4.3% in January with 7.4 million people unemployed, both higher than a year earlier. The jobs report beat estimates and contributed to higher bond yields. One additional positive report of 60,000 jobs would make 2026 exceed total job growth in 2025, which ended at 181,000 jobs. Major gains occurred in health care (+82,000), social assistance (+42,000) and construction (+33,000), with nonresidential specialty trade contractors adding 25,100 jobs. The federal government (-34,000), financial activities (-22,000) and real estate (-4,400) lost jobs. Fewer job openings and rising unemployment claims signal weakening, and the Federal Reserve is monitoring data closely; potential rate cuts this year depend on revisions and inflation.

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