US Job Market Shows Signs of Stabilization with 130,000 New Jobs Added in January

US employers added 130,000 jobs in January, beating market expectations and giving some relief after a long stretch of disappointing labour market reports. The unemployment rate fell to 4.3 percent, from 4.4 per cent indicating conditions may be steadier than feared. The data was released by the Bureau of Labor Statistics (BLS) on Wednesday, after being delayed by a recent partial government shutdown. Economists surveyed by Bloomberg had expected around 68,000 new jobs, making January’s figure nearly double forecasts. It also followed a downwardly revised 48,000 jobs added in December, showing how fragile hiring had been at the end of last year. Hiring slowed sharply through 2025 after several years of strong gains. The US economy added 584,000 jobs in total last year, making it the weakest year for employment growth outside of a recession since 2003. Including recession years, it would mark the slowest pace of job creation since the pandemic in 2020. “We know 2025 was sloppy,” said Mike Skordeles, head of US economics at Truist Financial to CNBC. He pointed to trade uncertainty and tariff-related disruptions as key reasons behind uneven hiring. The January data supports Federal Reserve Chair Jerome Powell’s recent view that the labour market is showing “evidence of stabilisation.” The central bank paused interest rate cuts last month after signs that the economy was slowing but not collapsing. However, some Fed officials remain cautious. “The labor market remains weak,” Fed Governor Christopher Waller said late last month, hinting that job gains in 2025 were far below historical averages. January’s report was released alongside the BLS’s annual benchmark revisions, which adjust past employment data using more complete state-level records. Earlier estimates suggested job growth between March 2024 and March 2025 could be revised down by more than 900,000 jobs. The final figures released Wednesday will provide a clearer picture of how much hiring was overstated earlier. The BLS also revised monthly job numbers for all of 2025. So far, every revision has moved employment figures lower, including December’s data. The jobs report arrives as President Donald Trump and Republicans prepare their economic message ahead of the 2026 midterm elections. While January’s stronger hiring number may help the administration’s narrative, the broader trend of weak job growth could still pose challenges. White House officials have already indicated that stricter immigration enforcement and deportations may be reducing the size of the workforce, affecting monthly job gains. Measuring the impact remains difficult, as many undocumented workers are not captured in official data. Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.