US job growth rebounded in January, easing concerns after the weakest year for employment gains since the Covid-19 pandemic.
Employers added 130,000 jobs last month, beating expectations and pushing the unemployment rate down to 4.3%, according to data from the US Labor Department. The stronger-than-forecast numbers come after a sharp slowdown in 2025, when the economy added just 181,000 jobs in total—far lower than previously estimated.
The pickup in hiring may help calm fears about the health of the labour market, which had been under pressure from factors such as cuts to government spending, uncertainty around tariffs, and tighter immigration policies.
Officials have argued that slower population growth linked to immigration restrictions has reduced the number of jobs the economy needs to create each month—a view shared by many economists. Despite this, President Donald Trump has continued to urge the US central bank to cut interest rates to stimulate economic growth.
Analysts cautioned that January’s strong headline figure may overstate underlying momentum, noting that quirks in the data and sector-specific gains could be skewing the picture. Other indicators, including job openings data, have suggested softer conditions.
Still, the report is expected to reduce pressure on the Federal Reserve to move quickly on interest rate cuts. Economists noted that employment growth was strong enough to draw more people into the workforce and lower unemployment.
Wages also continued to rise, with average hourly earnings up 3.7% year-on-year.
Job creation was driven largely by the healthcare and construction sectors, while employment declined in the federal government and financial services. Economists noted that much of the growth was concentrated in a small number of industries.
The report also included revisions to previous data, showing 17,000 fewer jobs in November and December than earlier estimates. Broader annual revisions revealed that 2025 job gains were overstated by 862,000, aligning with prior expectations.
Overall, while January’s figures offer a welcome boost, analysts say they should be viewed cautiously as the labour market continues to adjust after a challenging year.
