U.S. Payrolls Rise 130,000 in January, Beating Forecasts

U.S. job growth started 2026 on a stronger-than-expected note, easing concerns that the labor market was losing momentum too quickly.

Nonfarm payrolls increased by 130,000 in January, well above the Dow Jones consensus forecast of 55,000, according to seasonally adjusted figures released Wednesday by the Bureau of Labor Statistics. The result was also stronger than December’s revised gain of 48,000.

The unemployment rate edged down to 4.3%, below expectations of 4.4%. A broader unemployment measure that includes discouraged workers and people working part-time for economic reasons fell to 8.0%, down 0.4 percentage points from December. Markets reacted positively. Stock futures moved higher after the release, and Treasury yields rose.

The report was published nearly a week later than usual because of the partial government shutdown, which ended on Feb. 3. Overall, it pointed to a labor market that is still growing but not surging. January marked the strongest month for job gains since December 2024, following a year in which payroll growth averaged only about 15,000 per month.

President Donald Trump highlighted the numbers as evidence of economic strength and renewed his call for the Federal Reserve to cut interest rates.

The BLS also released final benchmark revisions covering April 2024 through March 2025. Those revisions reduced previously reported payroll counts by 898,000 on a seasonally adjusted basis, slightly smaller than an earlier estimate released last September and broadly in line with Wall Street expectations.

Health care accounted for most of the hiring in January, adding 82,000 jobs. Social assistance rose by 42,000. Together, those categories explained nearly all of the net job growth. Construction added 33,000 after a relatively flat year.

Government payrolls moved the other way. Federal employment fell by 34,000, with the BLS noting that some workers affected by prior cuts and deferred resignation arrangements were no longer counted. Financial activities also declined, down 22,000.

Wages rose at a steady pace. Average hourly earnings increased 0.4% in January, slightly above expectations, and were up 3.7% from a year earlier, matching forecasts.

Before the report, expectations were low after other indicators pointed to softness, including slower private-sector hiring, higher layoff plans, and fewer job openings. Even some officials had signalled caution heading into the release. January’s data, however, offered a clearer sign that the job market may be stabilizing rather than sliding.

The household survey, which is used to calculate the unemployment rate, was especially strong. It showed employment rising by 528,000 in January, while the labor force participation rate ticked up to 62.5%.

For the Federal Reserve, the combination of firmer job growth and steady wage gains likely supports a wait-and-see approach. Market pricing after the report leaned more toward the Fed holding rates steady at its March meeting, while expectations still tilted toward a possible cut later in the year.