The US job market slowed down a bit in January, with job creation dropping to 143,000 new positions, which is way below December’s upwardly revised 307,000 and far off the 169,000 economists expected, according to the Bureau of Labor Statistics (BLS) report on Feb. 7.
The unemployment rate dropped to 4% regardless, and the jobs report also revealed huge benchmark revisions that slashed earlier job growth estimates. The BLS’s annual review knocked off 589,000 jobs from the count covering the 12 months through March 2024.
Back in August, preliminary adjustments had hinted at an even worse shortfall of 818,000. Friday’s revision made it official. Health care, retail, and government were the main sectors adding jobs in January. Health care added 44,000 new positions, retail gained 34,000, and government employment rose by 32,000, according to the report.
Social assistance jobs contributed 22,000 to the month’s total, keeping things somewhat steady, even though the mining sector lost 8,000 positions. Overall, January’s job growth didn’t match the monthly average of 166,000 jobs seen in 2024.
But the household survey showed a massive 2.23 million increase in employment, and the bump came from annual adjustments in population and immigration estimates.
The labor force participation rate ticked higher to 62.6%, a small 0.1 percentage point increase from December. More people either found jobs or started looking for work. But not everything moved.
The broader unemployment measure—which includes discouraged workers and part-timers stuck in low hours—held steady at 7.5%. That’s an important figure because it perfectly shows the underlying slack in the labor market.
Notably, this is the first jobs report since Donald Trump’s return to office on January 20. His administration came in promising tax cuts, tougher trade policies, and measures to bring back American manufacturing. Now Federal Reserve policymakers are dissecting the data. The Fed cut rates by a full percentage point last year, but chair Jay Powell has said that they were likely not gonna be doing that this year.
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