The U.S. economy added 130,000 jobs in January, beating expectations and pushing the unemployment rate slightly lower, according to new data released Wednesday by the Bureau of Labor Statistics. But beneath the headline numbers lies a far less rosy picture for 2025 overall, as federal officials sharply revised down prior job gains.
The January employment report showed the jobless rate ticking down to 4.3 percent, compared to expectations that it would hold steady at 4.4 percent. Economists had projected roughly 70,000 new jobs for the month, making January’s 130,000 gain a stronger-than-anticipated start to the year.
Chris Bangert-Drowns, a researcher at the Washington Center for Equitable Growth, described the report as showing signs of a “rebounding labor market,” noting that unemployment declined and hiring was driven largely by gains in the service sector.
However, the Bureau of Labor Statistics also revealed significant revisions to previously reported data. More than 400,000 jobs were shaved off the 2025 employment total, leaving the country with just 181,000 new jobs for the year, down sharply from the initially reported 584,000.
The downward revision is part of the BLS’s annual benchmark process, in which the agency recalculates employment figures based on updated federal population data. In 2025, the BLS subtracted nearly 600,000 jobs from the 2024 total employment gain as part of that same process.
In the days leading up to the report, Trump administration officials sought to temper expectations surrounding the January numbers. Top White House economists attributed the broader employment slowdown under President Donald Trump to mass deportation policies, arguing that a smaller labor force means the economy does not need to generate as many new jobs as under previous administrations.
Daniel Zhao, chief economist at Glassdoor, described the report as a tale of two trends.
“January’s jobs report reads like a race split in two. Looking back, revisions show that 2025 was a much slower jog than we first thought,” Zhao wrote in an analysis Wednesday.
“But looking ahead, the latest data show hiring came out of the gate stronger than expected to start the year. After a slow start in the first leg, the labor market may be finding its footing now.”
Even with January’s stronger-than-expected gains, job growth was heavily concentrated in health care and social assistance — sectors that have consistently added jobs in recent years, driven in large part by the aging U.S. population. After averaging just 15,000 new jobs per month last year, economists are watching closely to see whether hiring broadens across industries.
“The key for 2025 is to see job gains broaden out beyond healthcare,” said Heather Long, chief economist at Navy Federal Credit Union. “Hiring is a sign of dynamism in the economy and belief in the future. More hiring beyond healthcare is what is needed for all Americans to feel the economic uptick.”
The January jobs data comes as inflation remains a concern. Prices were up 2.7 percent annually as of December, roughly in line with where inflation stood when Trump was elected in November 2024. The Bureau of Labor Statistics is set to release its latest consumer price index report Friday.
A lack of progress on inflation could complicate efforts by Trump and Republicans to persuade voters that prices are under control. Strong job growth combined with persistent inflation may also delay interest rate cuts from the Federal Reserve.
Angelo Kourkafas, senior global strategist at Edward Jones, said the report “provides ammunition to the Fed hawks to maintain a patient approach to rate cuts,” noting that markets are now fully pricing in a rate cut by July rather than June.
As the data sends mixed signals, the administration faces the challenge of highlighting job growth while addressing broader economic concerns ahead of the midterm elections.
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