U.S. economy adds stronger-than-expected 130,000 jobs in January
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The U.S. economy added a whopping 130,000 jobs in January, while the unemployment rate ticked down to 4.3%, the Labor Department said on Wednesday.
Why it matters: The surprisingly robust hiring comes after months of tepid job gains that have heightened Americans' economic worries.
The intrigue: Wednesday's government shutdown-delayed report also included its final annual revisions that showed slower job growth throughout President Trump's first year in office.
- The revisions — which reconcile the government's monthly survey with unemployment insurance tax records — showed employment was 898,000 lower in March 2025, the Labor Department said.
- That means the economy added 181,000 jobs in 2025, well below the roughly 584,000 gain that was initially reported.
- Job growth averaged 15,000 per month last year, down from the previous estimate of 49,000.
- Federal Reserve officials and economists had anticipated that the revisions would indicate sharply lower jobs growth in 2025.
Zoom in: January's surprising jobs boom was concentrated in a handful of sectors, continuing the trend of concentrated jobs growth seen in recent years.
- Health care (+82,000) and social assistance (+42,000) accounted for the bulk of last month's gains, though the construction sector also added 33,000 jobs.
- That hiring was offset by a continued decline in federal government workers, which shed another 34,000 jobs last month. Employment in financial activities also declined by 22,000.
The big picture: The Fed last month paused a string of interest rate cuts intended to shield the labor market.
- Last month, Federal Reserve chair Jerome Powell said that "while job gains have remained low, the unemployment rate has shown some signs of stabilization."
- But another top Fed official, Christopher Waller, who wanted to cut rates in January, warned that "substantial" labor market deterioration was a real risk.
The backdrop: Top White House officials said this week that they expect smaller job gains in the months ahead, a result of the administration's immigration crackdown that has caused a huge population shift.
What to watch: Fed officials say that lower worker supply is only one reason job gains were so tepid in recent months.
- But demand for new workers has cooled as uncertainty weighs on employers and companies experiment with AI.
The bottom line: Jobs growth surged in January, an early sign that the labor market might be stabilizing.
Editor's note: This story has been updated with additional details from the jobs report.
