U.S. Job Gains Beat Expectations in January as Unemployment Dips

U.S. Job Gains Beat Expectations in January as Unemployment Dips

The U.S. economy added 130,000 jobs in January, surpassing expectations, while the national unemployment rate edged down to 4.3% from 4.4% in December, the Labor Department reported Wednesday.

Despite the stronger-than-anticipated headline number, some economists cautioned that the data does not signal a significant shift in labor market momentum. Analysts said the Federal Reserve is likely to seek additional evidence on employment trends and inflation before deciding on its next interest rate cut.

“The January employment report surprised to the strong side but overstates any emerging strength in the labor market,” said Nancy Vanden Houten, lead economist at Oxford Economics. She added that the latest figures “warrant no change to our forecast for the economy or for the Federal Reserve to keep policy steady until June.”

Job growth was concentrated in several key sectors. Healthcare led the gains with 82,000 new positions, followed by social assistance, which added 42,000 jobs, and construction, which increased by 33,000.

However, not all sectors saw improvement. Federal government employment declined by 34,000 positions, extending a downward trend in 2025 amid ongoing budget cuts. The financial services industry also shed 22,000 jobs in January.

“It’s encouraging to see solid construction job gains in January after a year of uneven employment,” said Ken Simonson, chief economist for the Associated General Contractors of America. “But those gains will fade later this year unless policymakers provide greater clarity and stability for infrastructure and energy investment.”

Over the past 12 months, the construction industry has added 44,000 jobs, a 0.5% increase—outpacing the overall 0.2% annual gain in U.S. nonfarm payroll employment. Nearly all of January’s construction growth occurred in nonresidential building, which accounted for 27,900 of the 33,000 jobs added during the month.