United States: The Labour Market Starts 2026 on a Strong Note

After several months of more modest results, the labour market regained some momentum in January. The 130,000‑job gain was the strongest since December 2024. The private sector stood out in particular, adding 172,000 jobs. However, most of these gains came from the health‑care sector. Job creation was not broadly based across industries: 55.0% of the 250 industries tracked recorded a monthly increase—barely above the 54.2% observed in December and 54.8% in November.

Several sectors experienced net layoffs, including retail trade, wholesale trade and warehousing, the information and financial sectors, and accommodation services. This pattern suggests that although the labour market performed better in January, it remains relatively fragile. It will also be important to assess whether the severe weather conditions at the end of January and beginning of February across much of the US will dampen recent momentum. Weekly jobless claims have also sent a somewhat less encouraging signal compared with earlier in the year, and the most recent data on US job openings point to further softening.

The annual revision to the establishment survey, while mostly shedding light on past developments rather than current conditions, is nonetheless informative. Notably, the labour market was less robust than previously thought, even before 2025. Employment levels for the benchmark month of March 2025 were revised down by 898,000 workers, bringing total employment to 158,377,000. Job creation was also revised lower for 2024 (from 2,012,000 to 1,459,000) and for the first three months of 2025 (a gain of 61,000 instead of 333,000).

Meanwhile, the household survey once again painted a stronger picture than the establishment survey. Employment according to this survey—typically much more volatile and less reliable—rose by 528,000 in January. This marks the fourth consecutive month in which household employment growth exceeded that of the establishment survey. As a result, the unemployment rate declined further, moving away from the recent peak of 4.5% reached last November. The labour force showed a solid monthly increase despite ongoing debate surrounding immigration and deportation policies. Broader measures of underemployment also improved in January.

The US labour market appears to have stopped deteriorating. January’s data even show an acceleration in hiring after several months of rather modest gains. The key question now is whether this momentum will continue. We expect further job gains in the coming months, although not necessarily at the pace recorded in January. For the moment, economic conditions remain consistent with the Federal Reserve maintaining the status quo on monetary policy.