Jobs and inflation showed better-than-expected numbers in January, according to the Feb. 11 Bureau of Labor Statistics (BLS) jobs report, with the economy adding an estimated 130,000 jobs and inflation dipping slightly to 4.3%.
Analysts had forecast that January inflation would remain the same as December 2025, holding at 4.4% and job growth would be around 55-65K, according to numerous reports
“It was a January job surge. The surprisingly strong job gains in January were driven mainly by health care and social assistance,” Heather Long, chief economist at Navy Federal Credit Union, said in a statement.
The report was released by the BLS a week later than typical due to the recent government shutdown. The report is usually released on the first Friday of each month.
The data also included the Commerce Department’s downward revisions to prior monthly data, indicating the labor market was weaker in 2024 and 2025 than previously estimated.
Delayed inflation data is scheduled for release on Friday, Feb. 13.
Key Details of the Report
The annual revision of job growth data was revised down from 584,000 jobs, to only 181,000 positions created in all of 2025. The report also noted that 2026 started with 386,000 more long-term unemployed Americans than there were in January 2025.
“It’s difficult to say how big an impact AI is having on layoffs specifically. We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it,” said Challenger.
Payroll gains for December were revised down by 2,000, and payroll gains for November were revised down by 15,000.
The annual revision is a standard BLS procedure that helps correct sampling and modeling errors and also serves as a reminder that the reports are based on estimates and sample surveys.
“Job growth is encouraging, but small business owners are still approaching hiring with discipline. They’re not just asking, ‘Can we hire?’ They’re asking, ‘Should we hire, and where does it drive the most value?’ We’re seeing more focus on productivity, training, and role clarity instead of broad expansion,” said Andy Bregenzer, head of U.S. regional and small business banking and co-head of commercial bank at TD.
Companies are aggressively cutting jobs in early 2026 to boost efficiency, streamline operations, and integrate AI, following a record-high, three-year, post-pandemic hiring boom. The layoffs in early 2026 reached their highest level for January since 2009.
Highest growth by industry:
- Healthcare: 82,000
- Social Assistance: 42,000
- Construction: 33,000
- Professional & Business Services: 34,000
- Manufacturing: 5,000
As far as job losses, the government sector took another hit. Jobs in information — which encompasses parts of the tech sector — showed job losses, as did jobs in financial services. Transportation and warehousing shrank by 11,000 positions.
Job losses by industry
- Transportation: 31,243
- Technology: 22,291
- Healthcare: 17,107
- Chemical Manufacturing: 4,701
- Media Industry: 575
Job Growth in 2025, Outlook for 2026
The latest BLS report follows several others about the state of the job market and its adjustment to tariffs, artificial intelligence, and the immigration crackdown.
Employers shed an estimated 108,435 positions last month, the highest for any January since 2009, when 241,749 job cuts were announced. It is the highest monthly total since October 2025, when 153,074 cuts were recorded, according to global outplacement and executive coaching firm Challenger, Gray & Christmas.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January. It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026,” Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.
Reasons Cited For Job Cuts
Contract Loss was the reason most cited for job cuts, with 30,784 announced during the month of January.
- Tariffs, 294 job cuts in January; 7,908 cuts in 2025
- Market and Economic Conditions, 28,392 cuts
- Company Restructuring, 20,044 job cuts
- AI, 54,836 layoffs
- Store, unit, or department closings, 12,738 planned layoffs
followed with . was cited for , while
Hours and Wages
Payrolls rose by 15 cents, or 0.4%, to an average hourly wage of $37.17. Over the past 12 months, average hourly earnings have increased by 3.7%. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents, or 0.4%, to $31.95.
Employees worked a weekly average of 34.3 hours in January, 0.1 hours more than last year. In manufacturing, the average workweek edged up by 0.1 hour to 40.1 hours; overtime was unchanged at 2.9 hours. For production and nonsupervisory employees, the hours worked went up by 0.1 hour to 33.8 hours.
Workers are being paid more compared to last year, with average hourly earnings up 3.7%, a pace that has been fairly consistent in recent months.
“All the details of the report point to strength across the board,” Matt Bush, U.S. economist at Guggenheim Investments, told the New York Times. “Real income for consumers is still positive, even if it’s weaker than before, so we think this can continue.”
