January adds 130,000 jobs, economists still cautious: CEI analysis

The economy added 130,000 jobs to the economy in January, exceeding economists’ expectations. While the news isn’t bad, lingering uncertainty regarding President Trump’s economic policies are keeping consumers and employers cautious.

CEI Senior Economist Ryan Young:

“A shutdown-related delay added some suspense, but January’s jobs report turned out better than expected, even with downward revisions of 17,000 jobs to November and December.

“A troubling trend is that nearly all of the jobs growth is in health care or social services, which are safe harbor sectors. More entrepreneurial sectors are generally flat, or in the case of manufacturing, down sharply over the last year due to tariffs and policy instability. This discourages investment and, over the long run, growth.

“While 4.3 percent unemployment is good news, the current low-hire, low-fire situation means that entrepreneurship and dynamism are not at America’s usual standards.”

CEI Research Fellow Sean Higgins:

“The Labor Department’s report Wednesday that the nation gained 130,000 jobs in December, knocking the official jobless rate down to 4.3 percent, is a surprise mostly because expectations were so low. The numbers suggest that while the economy has slowed due to the uncertainty created by the current administration’s tariff policies, business and consumers are still optimistic that this situation will pass.

“Tariff-related uncertainty over prices means businesses are being cautious regarding investments, but are they are resisting layoffs because they don’t want to struggle to find workers should things turn around.

“Notably, federal government employment is now down by 327,000 from the beginning of 2025, a decline of just shy of 11 percent. For all of the controversy surrounding DOGE, it has actually been successful in reducing the bloat of the federal government.”