The US economy kicked off 2025 by adding 143,000 jobs in January, fewer than expected.
The US economy kicked off 2025 by adding 143,000 jobs in January, fewer than expected; but the unemployment rate dipped to 4%, according to data released Friday by the Bureau of Labor Statistics.
Economists were projecting the unemployment rate would stay at 4.1% and 170,000 jobs would be added, according to FactSet estimates.
While cold and severe weather as well as the wildfires in Los Angeles were expected to be influential factors on January’s report, they had “no discernible effect” on last month’s payroll numbers, earnings, hours worked or the unemployment rate, BLS officials noted.
Friday’s report – which also featured some significant data adjustments that happen at the start of every year – also provided more clarity on recent labor market trends, indicating that job growth last year was weaker than previously estimated.
The latest benchmark revision – an annual process that squares up estimates – showed there were 589,000 fewer jobs added to the economy in 2024.
Accounting for the revisions, there were just shy of 2 million jobs added last year, amounting to roughly 166,000 jobs per month – a pace practically equal to what was seen in 2019.
“The foundation of the labor market remains incredibly sturdy,” Cory Stahle, an economist at the Indeed Hiring Lab, wrote in a statement on Friday. “Revisions to the past year’s data may have rearranged a few rooms in the house, but they did not fundamentally change the structure.”
In the years following the economy-upheaving pandemic, the labor market has slowed, but it has not collapsed. Growth has remained solid enough to fuel consumer spending and put the economy on track for a “soft landing” of reining in inflation without triggering a recession.
It’s also been historic. Through January, the US economy has posted monthly job gains for 49 months, marking the second-longest period of employment expansion on record, according to BLS data that goes back to 1939. (The longest was a 113-month streak from October 2010 to February 2020).
Health care continues to drive job gains
But there’s been some heightened concern in recent months: Job gains have slowed not because of mass layoffs, but because hiring activity has slowed sharply. And that’s kept unemployed workers on the sidelines for longer.
Because of those dynamics, if there were to be a sudden turn in the economy, there would be little buffer for businesses to make a change, economists warn.
“That leaves us in a situation where things can essentially flip quite quickly, because you’ve already got companies hiring as if they’re in a recession – even if they’re not laying people off,” Oliver Allen, senior US economist at Pantheon Macroeconomics, told CNN this week.
And the potential for a significant change has become even more heightened as President Donald Trump has started implementing sweeping policy changes related to trade, immigration as well as federal employment, Allen said.
In January, most major industries added jobs, although some of the gains were quite modest.
Health care and social assistance continued to lead the way, accounting for nearly half of the month’s gains by posting net job growth of 66,000.
The retail sector and government (which spans federal, state and local hiring) recorded employment growth of 34,300 and 32,000 respectively.
Wage growth remained strong, rising 0.5% from December and running at a 4.1% annual rate.
The-CNN-Wire & 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
The US economy kicked off 2025 by adding 143,000 jobs in January, fewer than expected.
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