U.S. payrolls rose by 130,000 in January, more than expected; unemployment rate at 4.3%

Core Insights - Job growth in January 2026 was significantly stronger than expected, with nonfarm payrolls increasing by 130,000, surpassing the Dow Jones consensus estimate of 55,000 [2] - The unemployment rate decreased to 4.3%, lower than the forecasted 4.4%, indicating a slight improvement in the labor market [3] Labor Market Performance - The report indicated a labor market in a low-growth mode, with only scattered signs of increasing layoffs, despite the stronger job growth [4] - Health care and social assistance sectors led job gains, contributing 82,000 and 42,000 positions respectively, while construction added 33,000 jobs [6] - Federal government jobs decreased by 34,000, and financial activities saw a decline of 22,000 positions [7] Revisions and Expectations - The Bureau of Labor Statistics (BLS) revised the previous year's job counts lower by a total of 898,000, aligning with Wall Street expectations [5] - Wall Street had muted expectations for the report due to prior releases indicating slow private sector gains and elevated layoff plans [8] - The previous year experienced consistently modest gains and several months of negative growth for payrolls, with negative revisions each month in 2025 [9] External Factors - A crackdown on illegal immigration and uncertainty over tariffs and inflation contributed to dampened labor demand and hesitance among businesses to expand their workforce [10]