The U.S. labor market showed signs of resilience in January 2026, with non-farm payrolls increasing by 130,000 — well above economists’ muted expectations — as the unemployment rate dipped slightly to 4.3%, according to the latest Employment Situation report released by the Bureau of Labor Statistics on February 11.
The job gains marked a notable improvement from December’s revised increase of just 48,000 and came despite ongoing headwinds including policy shifts on immigration, tariff uncertainties, and federal government workforce reductions. Economists had forecasted a much weaker reading, with the Dow Jones consensus estimating only 55,000 new jobs and the unemployment rate holding steady at 4.4%.
“This stronger-than-expected start to 2026 provides some relief to concerns about the state of the U.S. labor market,” the report highlighted, noting that hiring remains in a “low-growth mode” with scattered signs of increasing layoffs in recent months.
Key sectors driving the gains included:
• Health care, which added 82,000 positions
• Social assistance, up by 42,000
• Construction, gaining 33,000 jobs
These increases were partially offset by losses elsewhere, notably in federal government employment, which fell by 34,000, reflecting the impact of layoffs and deferred resignations tied to the Department of Government Efficiency initiatives, down 22,000.
A broader measure of labor underutilization, which includes discouraged workers and those employed part-time for economic reasons, improved to 8% in January, down 0.4 percentage points from December.
The release of the report was delayed by nearly a week due to a partial government shutdown that ended on February 3.
MacDailyNews Take: U.S. financial markets reacted positively to the data, with stock futures ticking higher – Apple is up slightly in pre-market trading – and Treasury yields posting gains.
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