Economists had forecast the unemployment rate to hold steady at 4.1% with 170,000 new jobs added, per FactSet estimates. The report offered a closer look at our current labor trends, showing that job growth last year fell short of earlier estimates. The latest benchmark revision revealed that 589,000 fewer jobs were added to the economy in 2024. When considering these revisions, just under 2 million jobs were added over the last year, which translates into roughly 166,000 new jobs per month. That pace is nearly identical to the 165,000 average monthly gains in 2019.

“The foundation of the labor market remains incredibly sturdy,” Cory Stahle, an economist at the Indeed Hiring Lab, said in a statement. “Revisions to the past year’s data may have rearranged a few rooms in the house, but they did not fundamentally change the structure.”

Even after the disruptive pandemic, our labor market has slowed down but hasn’t collapsed. The steady job growth has been strong consumer spending and kept the economy on track for a “soft landing,” taming inflation without triggering a recession. This momentum is historic as well. Through January, the U.S. has experienced monthly job gains for 49 consecutive months, the second-longest streak of employment expansion on record. For many in our communities, these figures signify ongoing progress and a resilient spirit in the face of adversity.

In January, the healthcare and social assistance sector led job gains with 66,000 new positions, while retail and government added 34,300 and 32,000 jobs. Overall, most industries experienced growth, although economists believe that factors like severe weather, wildfires and illness likely reduced the total by approximately 15,000 jobs. Notable shifts included decreased leisure and hospitality jobs and a decline in labor participation among prime working-age women, especially those with small children.

In a recent CNN interview, Diane Swonk, KPMG’s chief economist, explained that “we tend to see that during disaster, because women with small children no longer have help.”

Wage growth remained strong at 0.5% from December, contributing to a 4.1% annual rate, and a combined 100,000 jobs revised up gains from November and December. Josh Hirt, senior U.S. economist at Vanguard, told CNN that this underscores a resilient labor market despite the month’s challenges.

January jobs reports can be complex due to long-established data adjustments. First, seasonal factors account for typical job losses after the holiday season, so if fewer layoffs occur than expected, overall employment gains may appear larger. Second, annual benchmark revisions reconcile initial payroll survey estimates with more accurate but lagging unemployment insurance data, leading to significant revisions that reflect major economic shifts.

In a CNN sit-down last month, Lightcast’s senior labor economist Ron Hetrick shared his insights: “There’s nothing surprising about this [revision] data when you look at it in that light.”

Lastly, updated Census population estimates are incorporated into household data, affecting key labor market metrics like unemployment.

The job market is showing signs of slowing down, a shift that hits especially close to home for minority communities. After the post-pandemic recovery, the Fed’s rate hikes to tame inflation have cooled things off. Now, with fewer hires and less job churn, experts like Oliver Allen from Pantheon Macroeconomics warn that we could see a rapid downturn. Meanwhile, President Trump’s sweeping policy changes from trade and immigration to federal job cuts and curbs on diversity efforts pose a serious threat to the economic progress made by women, Black, Latino and other underrepresented workers.

“Tariffs raise prices on goods and services, and when that occurs, people will buy less, and they will spend less,” Michelle Holder from John Jay College explained, reported CNN. “The data, the trends are pretty crystal clear during economic downturns, during periods when [spending] declines, spending decreases in sectors where Black and Brown people are well represented.”

Due to long-standing data tweaks that keep things current, January jobs reports can be a real puzzle. Seasonal adjustments are a big part of the mix, and post-holiday belt-tightening means many workers lose their jobs. The stats smooth out these expected losses. If fewer folks are let go than predicted, overall job gains look more prominent and vice versa.

Then, there’s the annual benchmark revision. For two decades now, officials have matched early payroll estimates from business surveys with the more concrete, but slower, data from unemployment insurance filings. Earlier this year, a preliminary estimate hinted at a drop of 818,000 jobs between April 2023 and March 2024, projected to be the biggest swing since 2009. Economic shifts, like those during the Great Recession and the pandemic, plus a recent immigration surge, have made these revisions part of the new normal.

The new Census population estimates are factored into the household side of the report, impacting key measures like the unemployment rate. This annual update ensures that the data reflects the most accurate picture of today’s labor force.