The latest US employment report handed President Donald Trump a headline he was quick to applaud—stronger-than-expected job additions in January, with total nonfarm payroll employment rising by 143,000 and the unemployment rate edging to 4.3 per cent.
On the surface, that suggests a labour market regaining stability.
But a closer reading of the data reveals a more concentrated pattern of hiring—one that raises structural questions beneath the upbeat headline.
Stable on the surface
The unemployment rate held steady at 4.3 per cent in January, with 7.4 million Americans unemployed, according to the Labor Department. Both figures were little changed from December. However, they remain higher than a year ago, when the jobless rate stood at 4 per cent.
Labour force participation was unchanged at 62.5 per cent, while the employment-population ratio edged to 59.8 per cent—both measures showing little movement over the year.
In other words, the labour market is not deteriorating. But neither is it accelerating.
More tellingly, long-term unemployment—those jobless for 27 weeks or more — stood at 1.8 million, up by 386,000 from a year earlier. One in four unemployed Americans (25 per cent) now falls into this category.
Growth concentrated in care-driven sectors
The composition of job growth is where the real story lies.
Of the 130,000 jobs added in January, 82,000 came from health care alone. That accounted for nearly two-thirds of total payroll gains.
Within the sector, ambulatory health care services added 50,000 jobs, hospitals added 18,000, and nursing and residential care facilities added 13,000. Health care hiring averaged 33,000 per month through 2025, underscoring its role as the most consistent source of employment growth.
Social assistance added another 42,000 jobs, largely in individual and family services.
Construction contributed 33,000 jobs, but the sector was essentially flat over 2025 as a whole.
Outside these areas, hiring momentum was limited. Manufacturing, retail trade, professional and business services, information, and leisure and hospitality showed little change.
Meanwhile, federal government employment fell by 34,000 in January and is now down 327,000—or 10.9 per cent—since its October 2024 peak. Financial activities shed 22,000 jobs in January and has lost 49,000 since May 2025.
Demographics, not dynamism?
The dominance of health care in payroll growth points to a structural shift.
As America’s population ages, demand for ambulatory care, hospitals, and nursing facilities continues to expand. These are not cyclical hires driven by business optimism or capital investment—they are tied to demographic necessity.
An ageing society requires more care workers. That demand persists regardless of broader economic sentiment.
This dynamic helps explain why payrolls can rise even when overall employment growth averaged just 15,000 per month across 2025 — a modest pace by historical standards.
What it means for households
Wage growth remains steady but not spectacular.
Average hourly earnings rose 0.4 per cent in January to $37.17. Over the past 12 months, wages have increased by 3.7 per cent. Production and nonsupervisory workers saw earnings rise to $31.95, also up 0.4 per cent on the month.
The average workweek edged up slightly to 34.3 hours in the month.
Yet the sectoral mix matters. Caregiving and social assistance roles typically pay less than high-skilled manufacturing, finance, or technology positions. If employment growth remains concentrated in these demographic-driven sectors, aggregate income growth may stay moderate.
Additional signs of underlying strain persist. While the number of people working part time for economic reasons fell by 453,000 in January to 4.9 million, it remains 410,000 higher than a year ago—indicating ongoing underemployment pressures.
A political challenge for Trump
For President Trump, the headline figure offers reassurance. Job gains continue. Unemployment is contained.
But the broader data suggests an economy in transition rather than expansion.
When nearly two-thirds of new jobs come from health care—and when sectors such as finance and federal employment are shrinking—the labour market appears increasingly supported by demographic inevitability rather than investment-led revival.
If the administration’s economic message centres on industrial resurgence and broad-based private-sector expansion, January’s data presents a more nuanced reality.
The US jobs engine is still running.
But it may be powered less by cyclical strength—and more by the steady, irreversible pull of an ageing population.
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