US Job Growth Accelerates in January, Unemployment Rate Falls to 4.3%

Nonfarm payrolls increased by 130,000 jobs last month, exceeding economists' forecasts.

Published on Feb. 11, 2026

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The U.S. job market showed signs of strength in January, with nonfarm payrolls increasing by 130,000 jobs and the unemployment rate falling to 4.3%. The better-than-expected job growth was partly due to fewer holiday-related layoffs compared to previous years, as seasonally sensitive industries like retail and delivery companies hired fewer temporary workers. However, trade policy concerns and slower labor force growth continue to cast a shadow over the labor market.

Why it matters

The robust job growth and declining unemployment rate could give the Federal Reserve more flexibility to hold interest rates steady as they monitor inflation. However, the labor market remains lackluster compared to the broader economic growth, and the Trump administration's trade and immigration policies have been cited as potential drags on hiring.

The details

The Labor Department's Bureau of Labor Statistics reported that nonfarm payrolls increased by 130,000 jobs in January, exceeding the 70,000 gain forecast by economists. The unemployment rate fell from 4.4% in December to 4.3% in January. Part of the better-than-expected job growth was attributed to fewer holiday-related layoffs, as seasonally sensitive industries like retail and delivery companies hired fewer temporary workers than usual. Trade policy concerns and slower labor force growth also continue to weigh on the labor market.

  • The employment report, initially due last Friday, was delayed by the three-day shutdown of the federal government.
  • Effective with the January report, the BLS updated the birth-and-death model by incorporating current sample information each month.

The players

Federal Reserve

The U.S. central bank that left its benchmark overnight interest rate in the 3.50%-3.75% range last month.

President Donald Trump

His trade and immigration policies have been cited as potential drags on the labor market, though tax cuts are expected to boost hiring this year.

Kevin Hassett

The White House economic adviser who warned of lower job gains in the months ahead due to slower labor force growth.

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What’s next

The Census Bureau will next month introduce new annual population controls for the household survey with February's employment report after they were delayed by last year's 43-day government shutdown. These adjust for updated population estimates, including migration.

The takeaway

The stronger-than-expected job growth and declining unemployment rate in January provide some positive signs for the U.S. labor market, but concerns remain over the impact of trade policy and slower labor force growth on future hiring.