The January Jobs Report Delivers Optimism For 2026 – But Here’s The Catch

The January jobs report supplied some sudden, excellent news for the Trump administration, however revised knowledge for 2025 point out that final 12 months’s job market was worse than initially thought.

Nonfarm payroll jobs rose by 130,000 in January driving, the unemployment fee right down to 4.3 p.c, in accordance with the Bureau of Labor Statistics. Nonetheless, the BLS additionally made changes to its 2025 knowledge that indicated the job market was largely flat in 2025. The BLS lowered the variety of jobs added for the 12 months from 584,000 to 181,000.

The knowledge means that 2025 was worse than initially thought, however 2026 has begun with unexpectedly strong job progress. The result’s that the present unemployment fee of 4.3 p.c nonetheless is larger than it was a 12 months in the past regardless of the robust begin to the 12 months.

January 2026 figures simply beat Dow Jones consensus expectation of 55,000 new jobs, CNBC reported, including that the excellent news drove preliminary beneficial properties within the S&P 500, the Dow Jones Industrial Common, and the Nasdaq Composite.

“Simply in: GREAT JOBS NUMBERS, FAR GREATER THAN EXPECTED! The United States of America must be paying MUCH LESS on its Borrowings (BONDS!),” President Trump wrote on Fact Social in response to the numbers.

There are nevertheless some warning indicators concerning the financial system for 2026. The 30-12 months bond fee dropped by 6.1 foundation factors on Tuesday to nearly 4.79%, the bottom stage since Jan. 15. Retail gross sales had been flat on the finish of 2025.

“The December retail gross sales report was ugly, with gross sales flat on the month versus expectations for a 0.4% achieve, following a 0.6% advance in November,” EY-Parthenon Chief Economist Gregory Daco wrote in a Tuesday consumer be aware quoted by Marketwatch. “Whereas some prosperous households continued to spend freely via the vacations, most customers had been way more considered and relied more and more on credit score and financial savings drawdowns to maintain outlays.”