Posted originally on Feb 12, 2026 by Martin Armstrong |  

January’s U.S. jobs data released by the Bureau of Labor Statistics clearly illustrates the cyclical stagnation and weakness beneath the surface of the headline figures. Nonfarm payrolls rose by 130,000 jobs in January 2026 — nearly double the 70,000 economists had forecast — and significantly stronger than the 50,000 jobs added in December 2025. The unemployment rate ticked down to 4.3% from December’s 4.4% as measured in the household survey.

The sector composition of the gains highlights uneven strength. Health care added 82,000 jobs, social assistance contributed 42,000, and construction 33,000, while federal government employment declined by 34,000 and financial activities shed 22,000 jobs. Average hourly earnings moved modestly higher, leaving YoY wage growth contained and not indicative of broad inflationary pressure.

A critical component of this report is the extensive benchmark revision to prior data. Job creation for the full year of 2025 was revised sharply downward from an initially reported 584,000 jobs to just 181,000, marking a reduction of more than 400,000 jobs and the weakest annual performance since the pandemic period. Separate analysis indicates employment growth through March 2025 had previously been overstated by roughly 862,000 jobs before the revision.

Roughly 25% of the unemployed have been out of work for 27 weeks or longer, and labor force participation improved only slightly. Hiring remains muted as companies are simply not expanding.

One monthly headline does not establish a new trend. Compared to December’s report, which showed just 50,000 jobs added and an unemployment rate of 4.4%, January’s 130,000 gain appears strong at first glance. However, December already reflected a clear deceleration from prior months, and the massive downward revisions to 2025 data confirm that the labor market had been weaker than originally reported.