Don't buy the headline. The job market still sucks for most of America

Wednesday’s US jobs report was heavily anticipated for two reasons. Not just because it would give us a look at how the jobs market started 2026, but also in how we would find out more information about 2025’s job situation. That’s because the January jobs report also includes the benchmark revisions for the previous year, and a preliminary revision from last Summer indicated that there would be a reduction in earlier job growth of more than 900,000 jobs through Spring.

Sure enough, the revisions were sizable for 2025, resulting in already-weak US job growth to sink near zero.

…[the Bureau of Labor Statistics] shaved off more than 400,000 jobs from the 2025 employment gain, leaving the U.S. with just 181,000 new jobs in 2025, compared to an initially reported 584,000.

The preliminary revision of 2025 jobs data is part of an annual process. Each year, the agency recalculates the previous year’s employment changes based on new federal data on the U.S. population. In 2025, BLS subtracted almost 600,000 jobs from the 2024 total employment gain.

Trump administration officials sought to downplay the importance of the January jobs numbers in the days leading up to the report’s release; top White House economists attributed an employment slowdown under Trump to the administration’s mass deportations, which they say lower the number of jobs the U.S. is required to create.

The 15,000-a-month average for last year is the worst non-COVID figure for job growth since the Great Recession was happening in 2009. And as you can see, most months of 2025 were revised down.

But don’t worry, those 2025 troubles are all behind us, because the January jobs report was awesome!

The US economy added an estimated 130,000 jobs last month, and the unemployment rate ticked down a tenth of a percentage point to 4.3%, according to new Bureau of Labor Statistics data.

That’s far stronger than the 75,000 net gain economists had projected, and it’s only 51,000 jobs shy of the entirety of the jobs created in 2025, BLS data shows….

“The labor market appears to be stabilizing,” Heather Long, chief economist with Navy Federal Credit Union, told CNN. “That’s the first step to recovery.”

January marked the strongest month of job creation since December 2024.

Uhh, let’s hold off onto whether this portends a great 2026 for the jobs market, and not just because 130,000 jobs added in a month would have been a subpar number for most of the last 15 years. Once you look closer at the numbers, it’s clear that this isn’t that good of a jobs report.

The first way this jobs report masks an overall still-lousy jobs market is because many more people in January weren’t working compared to December. It’s just that the dropoff wasn’t as much as what the Bureau of Labor Statistics expects for that time of the year.

Job change Dec 2025 – Jan 2026
Seasonally adjusted +130,000
Not seasonally adjusted -2,649,000

So the “growth” merely reflects lower-than-normal post-Holiday and cold-weather layoffs. Which we might expect given that unemployment claims were still low through mid-January, and that all those layoffs that were announced last month won’t result in people losing their jobs until later this year.

The second reason that the January jobs report isn’t as great as a six-figure gain would indicate is because of how lopsided it is toward a small number of sectors.

That “all other jobs” category accounts for nearly 4 out of 5 jobs in this country. Which means 80% of American workers are seeing no job gains at all in the sector they work in.

An absurd amount of the job gains coming from health care and social assistance has been a trend for well over a year, but that hot streak will likely be threatened as more Americans lack health insurance in 2026 and ICE likely harms an industry where 1 out of 6 workers are immigrants.

And that 33,000-job gain in construction isn’t from a boost in activity as much as it is a lower-than-normal January decline of 213,000 jobs. So let’s see if that reverses in the coming months if Springtime construction hiring doesn’t meet modeled targets (especially with Trumpist ICE raids may well hamper the availability of a sizable portion of that workforce).

The January jobs report reiterated that most of our real economy was struggling as 2026 began. And average hourly wage growth is still mediocre at 3.7% over the last 12 months, (although there was a not-bad 0.4% increase for the first month of the year). Until we see that wage growth start growing on a consistent level , and until more than 1/5 of the US jobs market starts seeing any kind of significant growth, I don’t see why consumers would stop being so down on the economy.