In January, the US economy added 130,000 jobs, twice the consensus forecast (65,000). The unemployment rate fell back to 4.3%, versus 4.4% expected.

These numbers bolster the Fed. In late January, it left rates unchanged, citing "signs of stabilization in the unemployment rate.”

This report also offsets a string of employment data released last week. The JOLTS survey showed the number of job openings fell to its lowest level since 2020, while layoffs hit their highest level for a January since 2009, according to the Challenger report.

So the January report is somewhat reassuring. However, the revisions published by the BLS paint a slightly darker picture.

This jobs report also came with the annual benchmark revision, which subtracts 862,000 jobs. While the figure is large, it was expected: the consensus had penciled in 825,000 fewer jobs.

At the Fed's December meeting press conference, Jerome Powell put the overstatement at 60,000 per month, or 720,000 jobs on an annualized basis.

Average job creation fell sharply after the revision. In 2025, only 15,000 jobs were created on average each month (versus 49,000 before the revision).

And when job gains are broken down, they are concentrated in three sectors: private education and health, leisure and hospitality, and government. A trend seen for several years. All other sectors combined have shed jobs over the past three years (400,000, according to a tally by ING).

The takeaway is that the US labor market is in what is known as a "low hiring, low firing” equilibrium. Despite very weak job creation, the unemployment rate remains at historically low levels. That is largely explained by a tightening of immigration policy (job creation is weaker because there is less labor supply).

The big unknown for economists is the "breakeven” - the number of jobs that must be created each month to keep the unemployment rate steady. In 2024, that figure was estimated at around 150,000.

On Monday, White House adviser Kevin Hassett said weak job creation should be expected in the coming months, given demographic dynamics and productivity gains.