Revised federal data reveals the U.S. economy added just 181,000 jobs in 2025, a dramatic downward revision from the initially reported 584,000. This marks the worst hiring year since 2020, with the Bureau of Labor Statistics adjusting previous estimates after receiving additional state data. The labor market actually contracted during four months of 2025, including January, June, August, and October.

January 2026 showed some improvement with 130,000 jobs added, exceeding economists' expectations of 55,000. Health care led gains with 137,000 new positions, while manufacturing saw its first increase since January 2024 with 5,000 factory jobs. However, leisure and hospitality added only 1,000 jobs, raising concerns about consumer spending. The unemployment rate fell slightly to 4.3% from 4.4%.

Federal Reserve Chair Jerome Powell had previously suggested last year's hiring numbers were overstated by about 60,000 positions monthly. These massive downward revisions, part of a trend since 2020, complicate economic messaging for the Trump administration heading into 2026 midterms. Treasury bonds fell and yields rose following the report, with traders now seeing little chance of a rate cut until July at the earliest.