Job Market Surprisingly Bounced Back In January

ETHReserveBank · 2026-02-11T15:49:05+00:00

In January, employers added 130,000 jobs and the unemployment rate dropped to 4.3%, suggesting a rebound in the job market. However, 2025 experienced worse job growth than previously reported, raising concerns about past economic conditions.

ETHReserveBank

2026-02-11 15:49:05

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Key Takeaways

Employers added 130,000 jobs and the unemployment rate fell to 4.3% in January.
Revisions to older data showed the labor market struggled more than previously thought in 2025.

Investopedia Answers

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It turns out that 2025 was worse for job creation than previously thought, and 2026 got off to a better start than almost anyone expected.

U.S. employers added 130,000 jobs in January, up from 48,000 in December, the Bureau of Labor Statistics said Wednesday. That blew past forecaster expectations for a gain of 55,000 jobs, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The unemployment rate fell to 4.3% from 4.4%, hitting its lowest since August.

What This Means For The Economy

The faster-than-expected job creation in January could relieve some fears about a hiring downturn. It could also keep officials at the Federal Reserve focused on inflation and reduce pressure on the Fed to cut interest rates to help the job market.

On the other hand, job creation for previous months was downwardly revised significantly after the bureau incorporated new data that wasn’t available when the initial monthly reports were created. The economy only added 181,000 jobs in 2025, not the 584,000 previously thought, and job creation over the 12 months through March 2025 was reduced by 898,000. That made 2025 the worst year for job creation outside of a recession since 2003.

Related Education

Nonfarm Payroll: What It Means and Why It’s Important

Understanding the Unemployment Rate: Impact and Insights

The report showed the job market could be regaining some momentum after several other recent indicators flashed warning signs, including a steep decline in job openings in December.

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