Hiring in January blew past expectations, signaling that the labor market could be picking up — and likely dashing hopes for an interest rate cut at the Federal Reserve’s meeting next month.
US employers added 130,000 jobs in January – a rapid pickup in pace from December and far exceeding expectations of 55,000 jobs, the Bureau of Labor Statistics said Wednesday.
The unemployment rate ticked down slightly to 4.3%, from 4.4% the previous month.
The report – which was delayed from Friday due to a partial government shutdown – is the first hint into this year’s labor market, after 2025 marked the slowest year for job growth since 2009 not counting 2020 during the pandemic.
However, January’s data could be somewhat misleading since retailers did not hire as many seasonal workers during the 2025 holiday season – so reported layoffs could be smaller and make the headline figure appear larger than usual.
The upbeat jobs report follows months of murky labor market data, as initial unemployment claims remain low from week to week, but job openings plummeted to 6.5 million in December – the lowest level since September 2020.
“January gives us an early view of a labor market that is setting into a more stable pattern after a year of recalibration,” Ger Doyle, North America president at ManpowerGroup, a workforce solutions firm, said in a note Wednesday.
