Strong January Hiring on a Stagnating Labour Market

The U.S. added 130k jobs in January 2026, beating expectations, but massive downward revisions to 2025 data show a nearly stagnant labor market over the past year. This report suggests the Federal Reserve may delay interest rate cuts as it views the market as 'stabilizing' rather than deteriorating rapidly.

Key Takeaways

• 1.January payroll employment grew by 130k, significantly exceeding expectations and suggesting labor market stabilization.
• 2.Annual benchmark revisions revealed a much weaker 2025 labor market than previously reported, with only 181k jobs added the entire year.
• 3.The unemployment rate unexpectedly declined to 4.3% from 4.4%.

Table of Contents

• Key points
• Faster employment growth and lower unemployment rate
• January data are volatile
• Health-care sector is the main job engine
• Stagnant labour market in 2025
• Faster hourly earnings growth but not the best measure
• Support for the Fed's more relaxed view on the labour market

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