Surge of 130,000 US hires last month is a stark contrast to the weak
hiring of 2025
[February 12, 2026] By
PAUL WISEMAN
WASHINGTON (AP) — U.S. employers added a surprisingly strong 130,000
jobs last month, but government revisions cut 2024-2025 U.S. payrolls by
hundreds of thousands.
The unemployment rate fell to 4.3%, the Labor Department said Wednesday.
The report included major revisions that reduced the number of jobs
created last year to just 181,000, a third the previously reported
584,000 and the weakest since the pandemic year of 2020.
The job market has been sluggish for months even though the economy is
registering solid growth.
But the January numbers were much stronger than the 75,000 economists
had expected. Healthcare accounted for nearly 82,000, or more than 60%,
of last month's new jobs. Factories added 5,000, snapping a streak of 13
straight months of job losses. The federal government shed 34,000 jobs.
Average hourly wages rose a solid 0.4% from December to January.
The unemployment rate fell from 4.4% in December as the number of
employed Americans rose and the number of unemployed fell.
“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, wrote in a commentary. "But it is enough to
stabilize the job market and send the unemployment rate slightly lower.
.. but it is stabilizing. That’s an encouraging sign to start the year,
especially after the hiring recession in 2025.”
Weak hiring over the past year reflects the lingering impact of the high
interest rates the Federal Reserve engineered in 2022 and 2023 to
counter surging inflation, as well as Elon Musk’s purge last year of the
federal workforce. The chaos from President Donald Trump’s erratic trade
policies also made businesses less willing to hire.
Dreary numbers had been coming in ahead of Wednesday’s report. Employers
posted just 6.5 million job openings in December, fewest in more than
five years.
Payroll processor ADP reported last week that private employers added an
unexpectedly weak 22,000 jobs in January. And the outplacement firm
Challenger, Gray & Christmas reported that companies slashed more than
108,000 jobs last month, the most since October and the worst January
for job cuts since 2009.
Nicole Bachaud, a labor economist with ZipRecruiter, said new data
Wednesday could signal "the start of a revival in the labor market.''
Hiring is getting a boost, she noted, from three interest rate cuts by
the Fed last year. Trump's tariffs are proving somewhat smaller and more
predictable than they appeared last spring, giving employers more
confidence to hire. Bachaud also noted that black unemployment, which
she sees as a sign of where the overall job market might be headed, fell
last month to 7.2%, lowest since July.
Samuel Tombs of Pantheon Macroeconomics remains skeptical, attributing
January job gains partly to unusually warm weather that boosted hiring.
He noted that construction firms added a strong 33,000 jobs last month.
“We think it is premature to conclude the labor market has decisively
turned a corner,” he wrote.
Last year's sluggish job market didn't match the economy’s performance.
From July to September, America’s gross domestic product – its output of
goods and services – galloped ahead at a 4.4% annual pace, the fastest
in two years. Consumer spending was strong, and rising exports and
tumbling imports boosted growth.
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Hiring sign is displayed in front of a restaurant in Chicago,
Thursday, Feb. 5, 2026. (AP Photo/Nam Y. Huh)
 Economists are puzzling out whether
job creation will eventually accelerate to catch up to strong
growth, perhaps as President Donald Trump’s tax cuts translate into
big tax refunds that Americans start spending this year. But there
are other possibilities. GDP growth could slow and fall into line
with a weak labor market or advances in AI. Automation may mean that
the economy grows without as many jobs.
At West Shore Home, a remodeling company in south central
Pennsylvania with 3,000 employees, business is brisk. West Shore
plans to hire about 200 workers in 2026, similar to last year.
Many homeowners can’t afford to, or don’t want to sell after locking
in cheap mortgages years ago. Instead, they are improving the places
they own.
As with many other businesses, artificial intelligence has arrived
at West Shore Home. Jessica Bittinger, chief human resources
officer, said the company is starting to use AI to simplify tasks
such as scheduling projects. She doesn’t expect the company to cut
jobs because of AI, but she also believes she won’t have to hire as
many people in the future. “It’s helping our employees work smarter,
not harder,” she said.
The jobs report Wednesday could lead the Fed to further delay more
cuts to its key interest rate. Some Fed officials have specifically
argued that last year’s weak hiring is shows that borrowing costs
are weighing on growth and discouraging companies from expanding. A
pickup in hiring, if sustained, undercuts that view.
Fed officials signaled in December that they expect to reduce their
key rate once more this year, while Wall Street investors expect two
reductions, according to futures pricing.
Wednesday's report included the government's annual benchmark
revisions, meant to take into account the more-accurate jobs numbers
that employers report to state unemployment agencies. They cut
898,000 jobs from payrolls in the year ending March 2025.
The revisions, which can reflect more accurate information about
businesses that opened or closed, trimmed the tally of jobs created
from April through December last year to 120,000 (or 13,000 a month)
from an originally reported 251,000 (or 28,000).
Despite recent high-profile layoffs, the unemployment rate has
looked better than the hiring numbers.
That is partly because President Donald Trump’s immigration
crackdown has reduced the number of foreign-born people competing
for work.
As a result, the number of new jobs that the economy needs to create
to keep the unemployment rate from rising has tumbled. Researchers
at the Brookings Institution believe it could now be as low as
20,000 and headed lower.
_____
AP Retail Writer Anne D'Innocenzio in New York and AP Economics
Writer Christopher Rugaber contributed to this report.
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