In a major win for President Donald Trump’s economic policies, the United States economy added 130,000 jobs in January while the unemployment rate declined to 4.3 percent, new federal data has revealed.
The number of new jobs is more than double economists’ expectations, according to new data released Wednesday by the Labor Department.
Economists had forecast roughly 55,000 new jobs, with projections ranging from zero to 130,000, and expected unemployment to hold steady at 4.4 percent.
The report’s release had been delayed several days due to the partial government shutdown.
Private-Sector Strength Drives Gains
All net job growth came from the private sector, which added 172,000 positions.
Federal government payrolls fell by 34,000, while state and local government employment declined by 8,000.
Construction led gains with 33,000 new jobs, and manufacturing employment rose by 5,000.
Within manufacturing, durable goods added 9,000 positions while nondurable goods fell by 4,000.
Service-sector employment expanded by 136,000 jobs, driven largely by health and social services.
Professional and business services added 34,000 jobs, and retail employment increased by 1,200.
Notable contractions appeared in information technology and financial services payrolls, shifts some analysts attribute to the growing impact of artificial intelligence in those industries.
Labor Market Signals Structural Shift
Monthly employment figures can fluctuate, leading many economists to focus on longer-term trends.
Since November, the economy has added an average of 73,000 jobs per month, with the private sector averaging 103,000.
Under current labor-market conditions, economists increasingly argue that lower headline job growth may still reflect a healthy economy.
Estimates for the “break-even” pace of hiring needed to prevent unemployment from rising have fallen dramatically, possibly as low as 30,000 jobs per month and potentially reaching zero later this year.
By comparison, during the high-immigration years from 2021 through 2024, the economy needed to add more than 100,000 jobs monthly to keep up with labor-force expansion.
Demographic trends are also reshaping the workforce, as large numbers of baby boomers retire and smaller generations struggle to fully replace them.
At the same time, the Trump administration’s push to reduce government payrolls, part of a broader effort to reprivatize the U.S. economy, has weighed on overall job totals while shifting growth toward the private sector.
Officials Point to Stable Full Employment
Federal Reserve Chairman Jerome Powell suggested last month that the labor market could remain healthy even with minimal monthly job creation.
“Is that full employment? In a sense, it is,” Powell said.
“If demand and supply are in balance, you know, you could say that’s full employment.”
White House trade adviser Peter Navarro echoed the need to recalibrate expectations.
“We have to revise our expectations down significantly for what a monthly job number should look like,” Navarro said Tuesday on Fox Business.
Top economic adviser Kevin Hassett similarly noted that immigration restrictions, deportations, and advances in artificial intelligence could reduce the number of jobs needed to sustain growth.
Productivity Surge Signals Stronger Expansion Ahead
Meanwhile, business investment and productivity are accelerating.
Commerce Department data show rising capital investment, while Labor Department figures indicate companies are generating more output from existing workers.
Productivity surged at a 4.9 percent annual rate in the third quarter of 2025, momentum that, if sustained, could signal exceptionally strong economic growth.
Major Downward Revisions to Prior Job Counts
Wednesday’s report also included significant downward revisions to employment data from the previous two years.
Revised figures show total job growth in 2024 reached 1.2 million, about 800,000 fewer than the originally reported 2 million.
Employment gains over the past year were also revised down to 181,000 from an earlier estimate of 584,000.
Even with those revisions, January’s stronger-than-expected hiring and falling unemployment point to a labor market stabilizing under President Trump’s economic framework, driven by private-sector expansion, rising productivity, and structural demographic change.
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