January 2026 jobs report expected soon

The January jobs report is scheduled for release Wednesday at 8:30 a.m. ET and is anticipated to reveal a potentially stagnant or very slow-growing labor market. Annual revisions to previous data are also expected to significantly alter the picture of job creation in early 2024.

Expected Payroll Growth

Economists are forecasting minimal job growth for January, with estimates clustering around 50,000 new jobs. Mark Zandi, chief economist at Moody’s Analytics, predicts a figure of zero, suggesting a fragile labor market. The Dow Jones consensus forecast calls for gains of 55,000, a decrease from the 50,000 increase reported in December. This is expected to maintain the unemployment rate at 4.4% and annual wage gains at 3.7%. However, some economists, like those at Goldman Sachs, anticipate a lower increase of 45,000, while Citigroup projects a gain of 135,000, attributing it to seasonal factors.

Revisions to Previous Data

The Bureau of Labor Statistics (BLS) is expected to release final numbers regarding benchmark revisions for data going back to March 2025. Preliminary adjustments last September indicated 911,000 fewer jobs than initially reported. While the final count is expected to be lower, it is still anticipated to be substantial, with estimates ranging from 750,000 to 900,000. Monthly revisions throughout 2025 have already reduced previously reported estimates by 624,000, resulting in average monthly payroll gains of less than 40,000. The BLS is also refining its methodology for estimating job creation from new and closing businesses. These revisions are likely to draw attention from Federal Reserve Chair Jerome Powell and his colleagues as they consider future policy decisions.

Lowered Expectations and Contributing Factors

White House officials have attempted to moderate expectations surrounding the report. Kevin Hassett, former National Economic Council director, attributes potential slower job growth to the administration’s efforts to address illegal immigration and rising productivity driven by artificial intelligence. He suggests that slower job creation could coincide with continued economic growth, profit increases, and GDP growth.

Recent Labor Market Trends

Recent data points to a softening labor market. Job openings reached their lowest level since September 2020, while planned layoffs and hires experienced their worst January since the 2009 financial crisis. ADP reported only 22,000 private sector jobs added in January. Conversely, Homebase reported a 3.3% increase in jobs at small businesses, exceeding the previous year’s figures.

Federal Reserve Perspective

Federal Reserve officials are monitoring employment trends over a longer timeframe and do not typically react to monthly fluctuations. Most officials anticipate a gradual slowdown in hiring without a significant rise in layoffs, suggesting a stabilization rather than a weakening of the labor market. Regional Federal Reserve Presidents Lorie Logan of Dallas and Beth Hammack of Cleveland expressed concerns about inflation and questioned the need for further interest rate cuts, suggesting a period of policy stability.