Total nonfarm payroll employment rose by 130,000 in January, comfortably exceeding expectations, while the unemployment rate edged lower to 4.3%, according to data released by the United States Bureau of Labor Statistics (BLS).
Markets had anticipated an increase of 70,000 jobs for the month. The stronger-than-expected headline figure marked the best month for payroll growth since December 2024, following a year in which job creation averaged just 15,000 per month.
A broader measure of unemployment, which includes discouraged workers and those working part-time for economic reasons, slipped to 8%, down 0.4 percentage points from December.
The BLS said in its Employment Situation Summary: “Job gains occurred in health care, social assistance, and construction, while federal government and financial activities lost jobs.”
Health care once again led job creation, adding 82,000 positions during the month. Gains were concentrated in ambulatory health care services (+50,000), hospitals (+18,000), and nursing and residential care facilities (+13,000).
Job growth in health care has averaged 33,000 per month in 2025.
Employment in social assistance rose by 42,000, driven primarily by individual and family services (+38,000). Construction payrolls increased by 33,000, reflecting growth in nonresidential specialty trade contractors (+25,000).
By contrast, federal government employment continued to decline, falling by 34,000 in January as some federal employees who accepted a deferred resignation offer in 2025 came off federal payrolls.
Since peaking in October 2024, federal government employment has dropped by 327,000, or 10.9%.
Financial activities employment also weakened, declining by 22,000 in January and down 49,000 since reaching a recent peak in May 2025.
Within the sector, insurance carriers and related activities shed 11,000 jobs over the month.
Employment showed little change across other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale and retail trade; transportation and warehousing; information; professional and business services; leisure and hospitality; and other services.
The report was delayed by nearly a week due to the partial government shutdown that ended on 3 February.
Markets reacted positively to the release. Stock futures ticked higher following the data, while U.S. Treasury yields also moved sharply higher as investors reassessed the outlook for interest rates.
President Donald Trump hailed the report as evidence of economic strength and renewed his call for lower borrowing costs.
Trump, said in a Truth Social post: "Just in: GREAT JOBS NUMBERS, FAR GREATER THAN EXPECTED! The United States of America should be paying MUCH LESS on its Borrowings (BONDS!). We are again the strongest Country in the World, and should therefore be paying the LOWEST INTEREST RATE, by far. This would be an INTEREST COST SAVINGS OF AT LEAST ONE TRILLION DOLLARS PER YEAR - BALANCED BUDGET, PLUS. WOW! The Golden Age of America is upon us!!!”
In addition to the monthly data, the BLS released its final benchmark revisions for the period from April 2024 to March 2025. The revisions lowered previously reported payroll levels by a cumulative 898,000 on a seasonally adjusted basis.
That figure was slightly below the preliminary estimate of 911,000 published last September but broadly in line with market expectations.
On wages, average hourly earnings rose 0.4% in January, 0.1 percentage point above forecasts, while annual wage growth stood at 3.7%, matching expectations.
The firmer wage data, combined with the stronger payrolls figure, may complicate the Federal Reserve’s path as it weighs the timing and pace of any future interest rate adjustments.
