Abstract

While a strong start to the year, the numbers may be revised meaningfully. This is the first estimate of January job growth including its modest survey response rate of 64% and January faces greater seasonal adjustment challenges.

Strong Start to 2026

The first estimate of January employment showed a robust start to the year, albeit with caveats.

STRONG START, SIGNIFICANT CAVEATS

• The first estimate of January’s job growth was a robust 130,000.

• This is the strongest job growth since December 2024 and marks the third consecutive month of increasing job growth.

• Healthcare and social assistance accounted for 95% of job growth.

• Wage growth was stronger than anticipated at .4% month-over-month (MOM).

• The unemployment rate declined, falling to 4.3%.

• The labor force participation rate increased reversing December’s decline.

• These numbers will be revised, possibly meaningfully, for multiple reasons.

• This is the first estimate of January job growth including its modest survey response rate of 64%.

• Additionally, January faces greater seasonal adjustment challenges.

KEY SECTORS IMPROVE

• Key sectors showed improving job growth in January including private sector jobs, adding 172,000 jobs, the most since December 2024.

• Goods producing jobs showed the strongest job growth since June of 2023 adding 36,000 jobs.

• Professional and business services registered its third consecutive month of job growth adding 34,000 jobs reversing six months of declines.

• The most promising news was that for the first time since November 2024, manufacturing showed positive job growth, albeit a modest 5,000.

• The manufacturing reversal is in line with the employment subindex of the ISM manufacturing index moving closer to expansion, albeit also with its own caveats.

• Given the caveats mentioned and conflicting jobs data from other sources, additional strengthening in these sectors is required to both confirm this month’s initial estimate and a new trend in each.