US job growth unexpectedly accelerated in January and the unemployment rate fell to 4.3%, signs of labour market stability that could give the US Federal Reserve room to keep interest rates unchanged for some time while policymakers monitor inflation.
But the largest increase in payrolls in 13 months reported on Wednesday likely exaggerates the labour market’s health, as revisions showed the economy added only 181,000 jobs in 2025 instead of the previously estimated 584,000. The job tally is a fraction of the 1.459m added in 2024, the final full year of former president Joe Biden’s term.
US president Donald Trump’s aggressive trade and immigration policies continued to cast a shadow on the labour market, economists said, cautioning against viewing the surge in payrolls in January as marking a material shift in conditions.
They noted that other indicators, including job openings, pointed to a tepid labour market, adding that job growth remained concentrated in the healthcare and social services sectors.
“The only jobs being filled in January are in healthcare and social assistance, along with some nonresidential specialty trade contractors probably related to AI facilities, all of which do not guarantee the economy’s future success,” said Christopher Rupkey, chief economist at FWDBONDS. “If you are looking for a job … you are unlikely to find anything to apply for in today’s report.”
Nonfarm payrolls increased by 130,000 jobs last month after a downwardly revised 48,000 rise in December. Economists polled by Reuters had forecast payrolls advancing by 70,000 jobs, with estimates ranged from a loss of 10,000 jobs to a gain of 135,000 positions. The unemployment rate fell from 4.4% in December.
The employment report, initially due last Friday, was delayed by the three-day shutdown of the US federal government.
Healthcare employment increased by 82,000 jobs, spread across ambulatory healthcare services, hospitals, nursing and residential care facilities. The job gains were well above the monthly average of 33,000 in 2025, leading some economists to conclude that January’s increase was a fluke.
Social assistance payrolls increased 42,000 positions.
Construction added 33,000 jobs, driven by hiring of nonresidential specialty trade contractors, attributed by some economists to data centres needed to power artificial intelligence. Construction was virtually flat in 2025.
Professional and business services payrolls increased 34,000. Manufacturing employment rebounded slightly as did retail payrolls. But the financial sector shed another 22,000 jobs. Federal government employment contracted by an additional 34,000 positions as some federal employees who accepted a deferred resignation offer in 2025 came off federal payrolls.
Federal government employment is down by 327,000 since peaking in October 2024. The share of industries reporting growth increased to 55.0% from 54.2% in December.
Reuters
