US Adds 130,000 Jobs in January, Beating Forecasts as 2025 Growth Is Revised Sharply

The U.S. labor market added 130,000 jobs in January, surpassing economists’ expectations and offering a modest boost after months of slowing momentum, according to a closely watched report released Wednesday.

The unemployment rate stood at 4.3% in January, slightly higher than in the fall but largely in line with forecasts. Economists had predicted job gains of around 70,000 for the month and expected the unemployment rate to remain unchanged.

January’s total marks a strong rebound from December, when just 50,000 jobs were added. However, it remains slightly below the 143,000 jobs created in January a year earlier.

2025 Job Growth Revised Down Sharply

Despite the better-than-expected performance in January, there were large downward revisions to overall job growth for 2025. With these revisions, new jobs created as of 2025 now total only 181,000, a far cry from the previously estimated 584,000. This makes 2025 the weakest year for new jobs since the COVID-19 pandemic. In comparison, new jobs created in 2024 amounted to 2 million.

The adjusted numbers reinforce growing concerns over a tightening labor market fueled by economic insecurity. Over the course of the last year, there have been changes to national trade policies, immigration policies, and a broader sense of political instability.

The jobs report was delayed from its original February 6 release date due to a brief federal government shutdown earlier in the month.

Trump Celebrates Report

Former President Donald Trump quickly praised the January numbers, posting on social media: “Just in: GREAT JOBS NUMBERS, FAR GREATER THAN EXPECTED!” He added, “WOW! The Golden Age of America is upon us!!!” However, other labor indicators paint a more complicated picture.

Private Payrolls and Layoffs Raise Concerns

Data released earlier showed private-sector job growth was much weaker than expected. Private payrolls increased by just 22,000 jobs in January, well below economists’ forecasts of 45,000. In January of last year, private payrolls rose by 140,000.

Layoffs also surged. According to outplacement firm Challenger, Gray & Christmas, U.S. employers announced 108,435 layoffs in January 2026 — a 118% increase compared to January 2025 and the highest number of January layoffs since 2009.

Meanwhile, job openings declined sharply at the end of last year. The Job Openings and Labor Turnover Survey (JOLTS) reported that openings fell by 386,000 in December 2025 to 6.542 million — the lowest level since September 2020.

White House adviser Peter Navarro had earlier tempered expectations for the monthly jobs report, suggesting gains might come in closer to 50,000.

“We have to revise our expectations down significantly for what a monthly job number should look like,” Navarro said in a television interview ahead of the release.

Federal Reserve Watching Carefully

The slowing labor market has not been weak enough to prompt the Federal Reserve to cut interest rates aggressively. Inflation remains uneven, complicating the central bank’s policy decisions.

Inflation stood at 2.7% in December. Jerome Powell, President of the Federal Reserve, acknowledged that the full effect of tariffs is still being felt as it moves through the economy.

At the same time, an unemployment rate hovering around 4.3% to 4.4% may indicate stability even as hiring slows. Powell noted that reduced labor demand, immigration policies, and labor force participation have contributed to slower hiring.

Consumer Sentiment Remains Weak

Higher prices continue to weigh on consumer confidence. According to the University of Michigan’s consumer sentiment survey, the index stood at 57.3 in February. While that marks a slight improvement compared to recent months, it remains more than 11% lower than during the same period in 2025.

The mixed signals — stronger-than-expected January hiring alongside sharply revised annual totals and rising layoffs — highlight the uncertain state of the U.S. economy as it navigates slower growth, persistent inflation, and policy shifts.

While January’s report offered a temporary lift, economists say the broader trend suggests a labor market stabilizing at lower levels of growth rather than accelerating.