U.S. adds 130,000 jobs in January; unemployment rate falls

• Key insight: The better-than-expected jobs report saw 130,000 jobs added in January, while unemployment dropped to 4.3%. 
• What's at stake: The Federal Reserve is watching the numbers closely as Chairman Jerome Powell considers the central bank's dual inflation and employment mandate. 
• Forward look: The strong job numbers reduce the need for the Fed to slash rates and increase the likelihood that it will extend a pause. 

WASHINGTON — U.S. employers added 130,000 jobs in January as the unemployment rate dropped to 4.3%, the Bureau of Labor Statistics said on Wednesday. 

Health care and construction drove the increase, adding 82,000 and 33,000 jobs respectively. The report comes a week later than expected, as the government shutdown last month delayed the BLS release. 

Trump administration officials had already been downplaying the results even before they were released in anticipation of weak economic readings. 

"We have to revise our expectations down significantly for what a monthly job number should look like," said Peter Navarro, the White House's top trade advisor, Tuesday on Fox Business. 

The numbers released on Wednesday are nonetheless likely to please the White House, which took fire from Democratic lawmakers in recent weeks for weaknesses in manufacturing jobs specifically. Manufacturing added 5,000 jobs in January after declining in previous months, a modest number that sheds little light on the efficacy of the White House's effort to bring manufacturing jobs back to the United States. 

The rosier-than-expected report lowers the chances that the Fed will cut interest rates, and makes it more likely that the central banks will extend its rate-cutting pause when it meets in March. 

Fed Chairman Jerome Powell said after the last rate-setting meeting that recent economic data suggest risks to both employment and inflation have "diminished a bit," reducing the need for an immediate policy change. He said the committee remains "well positioned" to make decisions on a meeting-by-meeting basis as new data emerges.

"We'll find our way forward as the data evolves," Powell said.

Monetary policy

Fed's Cook calls recent inflation numbers 'disappointing'

February 4, 2026 7:36 PM

The jobs report also shows a major downward revision for job growth in 2025. The new estimates say that employers added only 181,000 jobs in 2025, a fraction of the earlier estimate of 584,000. 

The revisions pose a problem for the White House. BLS issued a major downward revision of its earlier employment estimates last July, spurring President Donald Trump to fire BLS commissioner Erika McEntarfer, claiming without evidence that the numbers were manipulated for political purposes. The BLS remains without a Senate-confirmed leader, but Trump has tapped longtime government economist Brett Matsumoto for the post. 

Federal government jobs declined by 34,000 in January, as federal workers who accepted a deferred resignation deal offered by the Trump administration left their positions in January. Financial activities employment also declined by 22,000.