The U.S. labor market demonstrated unexpected strength in January 2026, adding 130,000 jobs according to a report from the Bureau of Labor Statistics released on Wednesday. This figure nearly doubled economist forecasts, which had anticipated 70,000 new jobs. The report also showed the unemployment rate falling to 4.3%, slightly better than the forecast of 4.4% and down from December's 4.4%.
However, the headline strength was juxtaposed against massive downward revisions to prior data. The Bureau of Labor Statistics implemented sweeping benchmark revisions, erasing approximately 898,000 jobs from payroll estimates covering April 2024 through March 2025. As a result, total nonfarm employment growth for the entire year of 2025 was slashed from an initial estimate of 584,000 to just 181,000. Revisions for November and December 2025 also reduced previously reported gains.
The data immediately impacted financial markets and monetary policy expectations. Following the report, interest rate traders using the CME FedWatch tool lowered the probability of a Federal Reserve rate cut at its March meeting from 21% to just 19%. The Federal Reserve had held policy steady at its January meeting after implementing multiple rate cuts in the second half of 2025, with members showing little inclination to resume easing soon.
Bitcoin exhibited a volatile, mixed reaction to the news. Having traded in a tight range near $69,000 for much of the week, BTC dipped to around $67,000 in the hours preceding the report's release. In the immediate aftermath of the strong data, bitcoin briefly rose to $67,500. Nonetheless, it remained down approximately 2% over the prior 24 hours, with other reports noting a sharper weekly decline of over 11% amid broader market volatility.
In traditional markets, U.S. stock index futures saw modest gains, with the Nasdaq 100 up 0.55% and the S&P 500 up 0.5%. The U.S. dollar strengthened on the session, and the yield on the 10-year U.S. Treasury note jumped five basis points to 4.20%.
