January numbers were much stronger than the 75,000 economists had expected. Healthcare accounted for nearly 82,000, or more than 60%, of last month's new jobs. Factories added 5,000, snapping a streak of 13 straight months of job losses. The federal government shed 34,000 jobs.
Average hourly wages rose a solid 0.4% from December to January.
The unemployment rate fell from 4.4% in December as the number of employed Americans rose and the number of unemployed fell.
“The surprisingly strong job gains in January were driven mainly by health care and social assistance,” Heather Long, chief economist at Navy Federal Credit Union, wrote in a commentary. "But it is enough to stabilize the job market and send the unemployment rate slightly lower. .. but it is stabilizing. That’s an encouraging sign to start the year, especially after the hiring recession in 2025.”
Nicole Bachaud, a labor economist with ZipRecruiter, said new data Wednesday could signal "the start of a revival in the labor market.''
Hiring is getting a boost, she noted, from three interest rate cuts by the Fed last year. Trump's tariffs are proving somewhat smaller and more predictable than they appeared last spring, giving employers more confidence to hire.
Despite recent high-profile layoffs, the unemployment rate has looked better than the hiring numbers.
That is partly because President Donald Trump’s immigration crackdown has reduced the number of foreign-born people competing for work.
As a result, the number of new jobs that the economy needs to create to keep the unemployment rate from rising has tumbled. Researchers at the Brookings Institution believe it could now be as low as 20,000 and headed lower.
