Key TakeawaysThe January jobs report, delayed because of the partial government shutdown, is expected to show an unchanged unemployment rate and continued slow hiring from December.Wage growth is also likely to remain steady, signaling a labor market in balance as weak hiring matches a slow-growing workforce.The Federal Reserve is likely to hold interest rates as is, barring a notable surprise in the jobs report data.<\/p>\n
The January jobs report\u2014delayed slightly due to the partial government shutdown<\/a>\u2014is expected to show continued softening in the labor market, though economists see little cause for concern. \u201cThere\u2019s more slack in the labor market than a couple of years ago,\u201d says Gus Faucher, chief economist at PNC Bank. \u201cThe labor market is still in good shape, just not as good as it was in 2023 and 2024.\u201d<\/p>\n The Bureau of Labor Statistics said Wednesday that the report will be released on Feb. 11<\/a>, five days later than originally scheduled. The BLS also pushed the release of its January inflation report back two days to Feb. 13.<\/p>\n While the fall\u2019s government shutdown yielded months of noisy labor and inflation data<\/a>, analysts don\u2019t foresee distortions in January\u2019s report, since the BLS remained open for the full data collection period in January. \u201cWe\u2019re going to see a delay, but I don\u2019t think it raises concerns about data quality,\u201d says Faucher.<\/p>\n Economists expect the jobs report to pick up right where 2025 left off<\/a>. The unemployment rate is forecast to hold steady at 4.4%, according to the FactSet consensus. Meanwhile, economists are split on hiring. Consensus expectations predict 80,000 jobs were added in January\u2014a significant increase from December\u2019s 50,000, which was lower than expected. Faucher anticipates the January figure to be 75,000.<\/p>\n Ben Ayers, a senior economist at Nationwide Insurance, expects the number to be closer to 55,000. He says that slower pace reflects the limited growth in the labor force itself: \u201cWe\u2019re kind of in this balanced position where we\u2019re not adding a lot of jobs, but we\u2019re also not adding a lot of new workers.\u201d<\/p>\n<\/p>\n January Jobs Report Forecast HighlightsJob report release date and time: Wednesday, Feb. 11, at 8:30 a.m. ESTNonfarm payroll employment is forecast to increase by 80,000 in January versus 50,000 in December, according to FactSet.The unemployment rate is forecast to remain at 4.4%.Watching for Job Growth Across Sectors<\/p>\n Ayers says December\u2019s soft hiring front should continue into 2026. He thinks the \u201clow hire, low fire\u201d environment will likely continue with the sluggish addition of new workers to the labor force, partly due to the nationwide immigration crackdown.<\/p>\n Faucher says the impacts of the recent immigration policy and deportations will be evident in the performance of construction, since that sector employs a significant number of immigrants: \u201cRestrictions on immigration have restricted labor supply, and so that\u2019s weighing on the job market.\u201d<\/p>\n Faucher and Ayers also have their eyes on the healthcare sector<\/a>, which drove hiring gains last year. Ayers will be watching to see if healthcare momentum will continue, along with possible changes to cyclical industries that lagged in 2025. \u201cWhen you look at manufacturing, construction, retail, leisure, and hospitality, they\u2019re by and large not adding that many workers. We\u2019ll see if that changed at the start of the year, but [it\u2019s] not likely to be the case,\u201d he explains.<\/p>\n Key for Faucher is the report\u2019s diffusion index\u2014a measure of the breadth of job growth across private sectors. He says he\u2019ll be looking for a reading above 50, the midpoint which indicates an even distribution of job gains and losses across all industries. In the December report, the diffusion index was 50.8.<\/p>\n Wage Growth to Remain Steady<\/p>\n Economists also expect wage growth pressures to be contained. Average hourly earnings are expected to rise 0.3%, the same level as December, as measured by FactSet.<\/p>\n Faucher says wage growth will likely be a key metric for the Federal Reserve going into its next meeting. \u201cThe Fed is looking very closely at wage pressures emanating from the labor market. Do we see wage pressures abating to some extent, reducing inflationary pressures in the economy?\u201d<\/p>\n Ayers forecasts wage inflation to ease to throughout the year: \u201cObviously we have seen that job growth has slowed, and that probably eases things a little bit on the wage inflation front.\u201d<\/p>\n<\/p>\n Fed Likely to Again Pause Rate Cuts<\/p>\n With unemployment, hiring, and wage growth all likely to remain stable, economists expect the Fed to keep interest rates where they\u2019re at. The majority of market participants are betting on interest rates staying in the 3.50%-3.75% range, with the remaining sliver predicting a quarter-point cut.<\/p>\n<\/p>\n The Fed held interest rates steady in January<\/a>, following three consecutive rate cuts. The central bank\u2019s next meeting is in March, and will be the first since President Donald Trump announced that he will nominate Kevin Warsh<\/a> to succeed Jerome Powell as chair of the central bank.<\/p>\n