The U.S. labor market bounced back in January after a year when hiring slowed even more than previously reported. The world’s largest economy added 130,000 new jobs last month, the Labor Department said on Wednesday. That marked the highest monthly gain in over a year and more than doubled a consensus estimate of 55,000, based on a Dow Jones poll. The unemployment rate fell to 4.3% from 4.4%. Meanwhile, data revisions painted a bleaker picture of last year’s hiring. There were only 181,000 new jobs in 2025, compared with the prior tally of 584,000.

The report may have supplied evidence to both hawks and doves inside the Federal Reserve. Some officials could consider the jump in hiring as a sign that labor demand is warming up, the economy is growing, and rate cuts should be put on hold for longer to keep inflation in check. Others might focus their attention on the jobs slump last year, softer headline inflation, and potential macro forces chipping away at long-term labor demand. The Labor Department will release its next inflation report on Friday. Economists estimate that the consumer price index rose 2.5% year-over-year in January. Consumer inflation was 2.7% in December and has cooled from a recent high of 3% in September.

PGIM’s Daleep Singh, Vice Chair and Chief Global Economist, welcomes Jake Sullivan, former U.S. National Security Advisor, on the Season 6 premiere of The Outthinking Investor for a conversation about the forces reshaping global power, markets, and investment strategy.