January Jobs - Strong Start to 2026

Strong start to 2026.  In January, U.S. payrolls rose by the most in more than a year and the unemployment rate unexpectedly fell, suggesting the labor market could be stabilizing as we enter the new year.  Employers added 130K jobs, doubling estimates and the unemployment rate fell to 4.3% from 4.4% a month earlier.  Today’s report could be an early indication that the labor market is firming up after a year marked by rising unemployment and minimal hiring.  Initial expectations called for continued sluggish job growth in 2026, though Federal Reserve Chair Jerome Powell cited signs of steadying in the labor market as the committee left interest rates unchanged last month.  While market participants still expect policymakers to implement two 0.25% cuts this year, expectations for the first cut were pushed out by a month from June to July.

• 130K jobs added in January.  The U.S. labor market added 130k jobs in January up from +48K in December and doubling expectations for +65K.  Strong Job gains in health care (+82K), social assistance (+42K) and construction (+33K) were partially offset by declines in the federal government (-34K) and financial services (-22K).  Since reaching a peak in October 2024, federal government employment is down 327K or 10.9%.  Employment showed little change in other major industries.
• 4.3% unemployment – down 0.1% month-over-month.  The U.S. unemployment rate registered 4.3% in January, down from 4.4% in December and below expectations for the same.  At 62.5%, the labor force participation rate was little changed from December.