Research
February 11, 2026
Total U.S. jobs
Job gains beat expectations in January despite signs of persistent labor market softness
The U.S. economy added 130,000 nonfarm payroll jobs in January, far surpassing the consensus estimate of 55,000. This marked the fourth gain in the past six months. Alongside the latest figures, the Bureau of Labor Statistics issued substantial benchmark revisions, reducing previously reported job totals by 553,000 for 2024 and 487,000 for 2025. Overall, the data continues to point to a cooling labor market, with payrolls increasing by 2.52 million in 2023, 1.46 million in 2024, and just 181,000 in 2025.
On a more encouraging note, total employment rose to 164.52 million, a new record. As such, even with recent weaknesses, the U.S. economy has demonstrated surprising resilience over the past few years, navigating multiple headwinds and an uncertain policy environment. However, the recent softening in labor market conditions could challenge the prevailing narrative of post‑pandemic strength. Steady employment and wage growth have been key drivers of consumer spending, and any sustained weakness could weigh on economic activity.
Restaurant operators are closely monitoring labor trends as they seek to drive traffic and sales, especially given the recent softness. At the same time, while challenges remain, there are also positive indicators that could support performance in the sector, reflecting mixed economic signals overall. Labor market developments will be critical to watch in the coming months as businesses adapt to evolving economic and policy dynamics.
For the Federal Reserve, this report presents a mixed picture. The cooling labor market may bolster the case for those advocating rate cuts to support growth. At the same time, overall economic activity has remained surprisingly solid and resilient, and even with some softening, the unemployment rate is still a respectable 4.3%. Taken together, the data suggest that monetary policymakers will likely maintain a wait‑and‑see stance in the near term as they evaluate additional incoming indicators.
The unemployment rate inched down to 4.3% in January, the lowest since August. The number of unemployed individuals decreased from 7.50 million in December to 7.36 million in January.
At the same time, the labor force participation rate edged back up from 62.4% in December to 62.5% in January. Overall, labor force participation has essentially stalled over the past three years, averaging 62.6% since January 2023.
Average hourly earnings for private‑sector production and nonsupervisory workers rose 0.4% in January to $31.95, up 3.8% from a year earlier. The year‑over‑year pace matched September and December and remained the slowest since May 2021—evidence of continued moderation, though at a still‑solid rate of wage growth. Labor cost pressures have eased markedly from their peaks of 7.8% in April 2020, in the immediate aftermath of the pandemic, and 7.0% in January and March 2022.
Job growth in January was highly mixed despite being up stronger than expected. The largest employment gains were in private education and health services, professional and business services, construction and eating and drinking places. In contrast, there were notable declines in federal and state government, financial activities, information, and trade, transportation and utilities. Below is a detailed breakdown of January’s employment changes by sector, ranked from highest to lowest:
On a more encouraging note, total employment rose to 164.52 million, a new record. As such, even with recent weaknesses, the U.S. economy has demonstrated surprising resilience over the past few years, navigating multiple headwinds and an uncertain policy environment. However, the recent softening in labor market conditions could challenge the prevailing narrative of post‑pandemic strength. Steady employment and wage growth have been key drivers of consumer spending, and any sustained weakness could weigh on economic activity.
Restaurant operators are closely monitoring labor trends as they seek to drive traffic and sales, especially given the recent softness. At the same time, while challenges remain, there are also positive indicators that could support performance in the sector, reflecting mixed economic signals overall. Labor market developments will be critical to watch in the coming months as businesses adapt to evolving economic and policy dynamics.
For the Federal Reserve, this report presents a mixed picture. The cooling labor market may bolster the case for those advocating rate cuts to support growth. At the same time, overall economic activity has remained surprisingly solid and resilient, and even with some softening, the unemployment rate is still a respectable 4.3%. Taken together, the data suggest that monetary policymakers will likely maintain a wait‑and‑see stance in the near term as they evaluate additional incoming indicators.
The unemployment rate inched down to 4.3% in January, the lowest since August. The number of unemployed individuals decreased from 7.50 million in December to 7.36 million in January.
At the same time, the labor force participation rate edged back up from 62.4% in December to 62.5% in January. Overall, labor force participation has essentially stalled over the past three years, averaging 62.6% since January 2023.
Average hourly earnings for private‑sector production and nonsupervisory workers rose 0.4% in January to $31.95, up 3.8% from a year earlier. The year‑over‑year pace matched September and December and remained the slowest since May 2021—evidence of continued moderation, though at a still‑solid rate of wage growth. Labor cost pressures have eased markedly from their peaks of 7.8% in April 2020, in the immediate aftermath of the pandemic, and 7.0% in January and March 2022.
Job growth in January was highly mixed despite being up stronger than expected. The largest employment gains were in private education and health services, professional and business services, construction and eating and drinking places. In contrast, there were notable declines in federal and state government, financial activities, information, and trade, transportation and utilities. Below is a detailed breakdown of January’s employment changes by sector, ranked from highest to lowest:
- Private education and health services: +137,000
- Professional and business services: +34,000
- Construction: +33,000
- Other services: +7,000
- Local government: +10,000
- Manufacturing: +5,000
- Leisure and hospitality: +1,000 (eating and drinking places: +27,800)
- Mining and logging: -2,000
- Trade, transportation, and utilities: -9,000 (retail trade: +1,200)
- Information: -12,000
- State government: -18,000
- Financial activities: -22,000
- Federal government: -34,000