January sees US employment growth pick up sharply, defying expectations – NFP report

The US January labor report, released Wednesday, showed an unexpected acceleration in job growth alongside a drop in unemployment, providing temporary relief for the Federal Reserve.

The stronger-than-expected numbers suggest that the central bank may keep interest rates on hold for the time being while continuing to monitor inflation closely.

The nonfarm payrolls report indicated that the US labor market added 130,000 jobs in January, up from a revised 48,000 increase in December (down from 50,000), significantly exceeding the forecasted 66,000 gain.

Meanwhile, the unemployment rate unexpectedly fell to 4.3% last month from 4.4% in December, defying expectations of a stable reading.

Although the January data are encouraging, the labor market remains fragile, as the Trump administration’s trade and immigration policies continue to exert pressure, partially offsetting the benefits of robust economic growth.

Economists remain cautiously optimistic, anticipating potential tax cuts by the administration that could support hiring in the coming months.

The US dollar strengthened broadly in immediate response to the solid labor numbers, though a clearer directional trend may emerge once markets fully digest the data.