2025 Job Creation Plunged to One-Eighth of 2024
By Reuters | 11 Feb, 2026

The US added only 181,000 jobs in 2025, about an eighth of the 1.46 million jobs created in 2024, according to revised Labor Department stats.

U.S. job growth unexpectedly accelerated in January and the unemployment rate fell to 4.3%, signs of labor market stability that could give the Federal Reserve room to keep interest rates unchanged for some time while policymakers monitor inflation.

But the largest increase in payrolls in 13 months reported by the Labor Department on Wednesday likely exaggerates the labor market's health, as revisions showed the economy added only 181,000 jobs in 2025 instead of the previously estimated 584,000. That is a fraction of the 1.459 million jobs added in 2024, the final full year of former President Joe Biden's term. 

President Donald Trump's aggressive trade and immigration policies continued to cast a shadow on the labor market, economists said, cautioning against viewing the surge in payrolls in January as marking a material shift in conditions. 

JOB GROWTH FOCUSED IN HEALTHCARE, SOCIAL SERVICES

They noted that other indicators, including job openings, pointed to a tepid labor market, adding that job growth remained concentrated in the healthcare and social services industries, which accounted for nearly all the rise in employment.

"The only jobs being filled in January are in health care and social assistance, along with some nonresidential specialty trade contractors probably related to AI facilities, all of which do not guarantee the economy's future success," said Christopher Rupkey, chief economist at FWDBONDS. "If you are looking for a job ... you are unlikely to find anything to apply for in today's report." 

Nonfarm payrolls increased by 130,000 jobs last month after a downwardly revised 48,000 rise in December, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls advancing by 70,000 jobs. Estimates ranged from a loss of 10,000 jobs to a gain of 135,000 positions. The BLS said frigid temperatures and snowstorms that slammed large parts of the country had not affected the establishment survey, from which payrolls are calculated.

But the harsh weather affected the survey of households, resulting in a below-average response rate of 64.3%, causing some economists to caution against reading too much into the decline in the unemployment rate from 4.4% in December.

Economists expected the winter storms would be a drag on February payrolls.

The employment report, initially due last Friday, was delayed by the three-day shutdown of the federal government.

Healthcare employment increased 82,000, the most since July 2020, spread across ambulatory healthcare services, hospitals, nursing and residential care facilities. The job gains were well above the monthly average of 33,000 in 2025, leading some economists to conclude that January's increase was a fluke. Social assistance payrolls increased 42,000. 

Construction added 33,000 jobs, driven by the hiring of nonresidential specialty trade contractors, attributed by some economists to data centers needed to power artificial intelligence. Construction was virtually flat in 2025. Professional and business services payrolls rose 34,000.

"I am skeptical that the degree of vigor seen in these data will be consistently repeated going forward, but this release should slam the door shut on the narrative that the labor market is on the cusp of falling apart," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.    

Manufacturing employment rebounded slightly, but has lost more than 80,000 jobs since Trump returned to the White House. Trump has defended tariffs on imported goods as necessary to revive factories.

There were minor job gains in the retail, utilities as well as the leisure and hospitality sectors. The financial sector shed another 22,000 jobs. Job losses were recorded in the transportation and warehousing, information as well as mining and logging industries.

Federal government employment contracted by an additional 34,000 positions as some employees who accepted a deferred resignation offer in 2025 came off payrolls. Federal employment is down by 327,000 since peaking in October 2024.

EMPLOYMENT GAINS ARE CONCENTRATED IN A FEW INDUSTRIES 

The share of industries reporting growth increased to 55.0% from 54.2% in December. Labor market softness was underscored by annual payrolls benchmark revisions, which showed 862,000 fewer jobs were created in the 12 months through March 2025 than previously estimated. 

Effective with the January report, the BLS updated the birth-and-death model, a method it uses to try to estimate how many jobs were gained or lost because of companies opening or closing in a given month, by incorporating current sample information each month. 

The update, which follows the same methodology applied to the April-October 2024 estimates post benchmark revision, could result in as many as 50,000 fewer jobs added to payroll growth than in recent months, economists estimated. 

Job growth averaged about 15,000 per month in 2025.

Trump shrugged off the revisions and focused on the January job growth surge, writing on social media that "We are again the strongest Country in the World, and should therefore be paying the LOWEST INTEREST RATE, by far."

Though traders are still betting the U.S. central bank will next reduce its policy rate in June, they see an almost 40% chance it will not move then, up from about 25% before the data.

The Fed last month left its benchmark overnight interest rate in the 3.50%-3.75% range.    

Stocks on Wall Street were trading lower. The dollar gained versus a basket of currencies. U.S. Treasury yields rose.

"It appears the labor market is closer to stabilization than rapid deterioration," said Sarah House, a senior economist at Wells Fargo. "Today's data suggest another rate cut under Chair (Jerome) Powell is increasingly unlikely."

The BLS will next month introduce new annual population controls for the household survey with February's employment report after they were delayed by last year's 43-day government shutdown. These adjust for updated population estimates, including migration. The Census Bureau last week said the nation's population increased by just 1.8 million people, or 0.5%, to 341.8 million in the year ending June 2025. 

Economists believe the economy needs to create about 50,000 jobs per month or even less to keep up with growth in the working-age population. About 387,000 people entered the labor force last month. They were more than absorbed by a 528,000 jump in household employment, pushing the jobless rate down.

Fewer people were working part-time for economic reasons and the ranks of those experiencing long-term unemployment declined. But economists remained skeptical of the improvement.

"Young college graduates are struggling to find opportunities and uncertainty surrounding trade and immigration policy is restraining business hiring plans," said Sung Won Sohn, a finance and economics professor at Loyola-Marymount University.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci, Chizu Nomiyama, Rod Nickel)