Over the same period, the unemployment rate fell to 4.3% from 4.4% in December. However, due to severe weather, the household survey response rate was only 64.3%, below the average level.

 

By sector, job gains in January were concentrated in a few industries. The healthcare industry added 82,000 jobs, the largest increase since July 2020, well above the 2025 monthly average of 15,000. Social assistance added 42,000 jobs; construction added 33,000 jobs, mainly driven by hiring related to data center construction supporting artificial intelligence. Professional and business services added 34,000 jobs.

 

Manufacturing employment rebounded slightly, but has fallen by more than 80,000 jobs since Trump returned to the White House. Retail, utilities, leisure and hospitality saw modest job growth. The financial industry lost 22,000 jobs, while transportation and warehousing, information, mining and logging also saw employment declines. Federal government employment decreased by 34,000 as some workers who had delayed retirement in 2025 formally left. Since peaking in October 2024, federal government employment has dropped by a total of 37,000.

 

About 387,000 people entered the labor force in January. The household survey showed a surge of 528,000 in employment, far outpacing the size of new labor force entrants, pushing down the unemployment rate.

 

Estimates suggest that, driven by the development of artificial intelligence and changes in the employment structure, the U.S. economy only needs to add about 50,000 jobs or fewer per month to keep pace with the growth of the working-age population.

 

Stephen Stanley, Chief U.S. Economist at Santander U.S. Capital Markets, said: “I am skeptical that the strength shown in these data can be sustained, but this report completely shatters the notion that the labor market is on the verge of collapse.”

 

Following the data release, market expectations for a Federal Reserve rate cut eased. Although traders still bet the Fed will deliver its first rate cut in June, the probability of no change has risen to nearly 40%, up from about 25% before the data.

 

Sarah House, Senior Economist at Wells Fargo, noted that the labor market is closer to stabilization than rapid deterioration, and the likelihood of further Fed rate cuts is diminishing.

 

However, the nonfarm data failed to mask the overall weakness in the job market. Earlier data from Automatic Data Processing (ADP) showed that the U.S. private sector added only 22,000 jobs in January, with job hunting becoming significantly more difficult. Annual employment benchmark revisions further highlighted weakness: U.S. job gains in 2025 were 862,000 lower than previously estimated, with only 181,000 jobs added for the full year, far below the 1,459,000 in 2024.

 

Trump posted on social media that the U.S. should enjoy the lowest interest rates in the world. His nominee for the next Fed Chair, Kevin Warsh, stated that rising productivity helps contain inflation and could alter the Fed’s policy outlook.

 

White House Economic Adviser Kevin Hassett said that due to the dual impact of slower labor force growth and higher productivity, job gains may decline in the coming months, but there is no need for panic. This view provides a reference for internal Fed policy discussions.

 

Fed Chair Jerome Powell previously said at a policy meeting that both supply and demand in the U.S. labor market are declining, making the labor market harder to interpret.

 

If constrained labor supply stems from potential worker losses, it could create hiring bottlenecks and wage growth, lifting inflation expectations and making the Fed more cautious about cutting rates. If slower job growth reflects weak demand, the economy and employment should be stimulated through rate cuts. Discussions are ongoing and may influence the Fed’s subsequent policy path.

 

Markets are subject to risks, and investment requires caution. This article is generated by AI based on third-party data, for reference only and does not constitute personal investment advice.