The United States will get its first detailed assessment of the job market's performance in 2026 when the Bureau of Labor Statistics (BLS) publishes the January employment report at 8:30 a.m. ET on Wednesday. Delayed slightly due to a brief government shutdown, this report follows a year characterized by markedly subdued job growth and promises to shed light on how hiring momentum has evolved since then.
Last year marked one of the weakest periods for job additions outside of recessionary times, with 2025 culminating in a scant 50,000 new roles added in December alone, broadly aligning with the monthly average posted throughout the year. Meanwhile, the unemployment rate ticked down to 4.4%, pointing to an enduringly sluggish labor market environment where movement—both job entry and exit—has diminished. Daniel Zhao, chief economist at Glassdoor, noted that many workers appear stuck in their current roles or feel shut out from opportunities altogether, highlighting the slowdown in the “churn” vital for a vigorous labor market. Job-seekers currently outnumber available vacancies, underscoring persistent mismatches in the labor market.
The forthcoming report will not only reveal January’s employment changes but will also integrate vital adjustments including the annual benchmark revision. This process aligns monthly survey data with more comprehensive administrative records, enhancing the accuracy of past employment figures and potentially altering the present understanding of labor market trends. The January update will thus carry significant implications for interpreting the labor market’s trajectory.
Projections for January Hiring and Unemployment
Economists largely expect January’s report to continue reflecting muted job growth consistent with 2025’s sluggish pace. Forecasts indicate monthly job gains likely around 50,000 to 80,000, with the unemployment rate remaining steady at approximately 4.4%, as reported by FactSet consensus estimates. This outlook is supported by recent labor data from both governmental sources and private-sector indicators, suggesting subdued hiring activity, limited change in joblessness, and continued reliance on sectors such as healthcare to prop up overall job creation.
However, some factors might marginally elevate the numbers. Historically weak holiday season hiring lessened the typical wave of post-festivity layoffs, while unusually warm weather in early January may have boosted employment, especially within construction and outdoor sectors. Even so, these influences are expected to provide only modest upward pressure on the figures.
Underlying Reasons for Modest Job Gains
The stagnation seen in hiring results from an interplay of supply and demand factors within the labor market. On the supply side, demographic trends such as the aging and retirement of Baby Boomers, coupled with slower population growth, have diminished the labor force expansion. Moreover, recent years have witnessed a sharp drop in immigration alongside increased deportations, reducing the influx of new workers.
In terms of labor demand, many sizeable employers have been trimming workforce levels following periods of pandemic-induced over-hiring. Additionally, uncertainty rooted in abrupt and sweeping changes to domestic policies has clouded corporate decision-making, leading to restrained recruitment efforts. The strategic reallocation of investments—from workforce expansion toward technology and equipment, including the adoption of artificial intelligence—is altering the shape of job creation. Higher operational costs, combined with tariffs, funding cuts, and stringent immigration enforcement measures, have further dampened business expansion and hiring capabilities.
Senior economist Joe Brusuelas of RSM US emphasized that attributing slow hiring solely to demographic changes overlooks significant influences from trade and immigration policies. He referenced a reported loss of 72,000 manufacturing jobs last year, which may be revised even further downward with the forthcoming benchmark adjustments, illustrating the multifaceted causes behind employment challenges.
Decoding the Benchmark Revision Process
The monthly jobs report is a timely but evolving snapshot based primarily on surveys covering approximately 121,000 employers and 631,000 worksites. While this methodology provides frequent updates, it inevitably carries margins of error. To enhance precision, the BLS performs an annual benchmark revision that reconciles survey-based employment estimates with data from the Quarterly Census of Employment and Wages (QCEW), sourced largely from state unemployment insurance tax filings, which collectively encompass around 95% of US jobs.
This comprehensive QCEW data lags by several months, with third-quarter 2025 figures not due for release until the following month. The benchmark process adjusts previous estimates to better mirror reality, correcting undercounts or overcounts in the monthly surveys gathered throughout the year.
In September, the BLS issued a preliminary benchmark revision revealing that the US economy's job additions for the 12 months ending March 2025 were likely overestimated by about 911,000, equating to roughly 76,000 fewer jobs per month than initially reported. Should this projection hold, it would represent a historic downward calibration, effectively halving the previously reported growth for that timeframe.
Clarifying Misconceptions About Data Integrity
These considerable revisions should not be misconstrued as tampering or manipulation of employment data. Rather, they exemplify a long-standing and transparent standard practice by the BLS, carried out for close to a century to continually refine data accuracy. Former BLS Commissioner Erica Groshen described this as an intrinsic characteristic of the agency’s methodology, reflecting responsible accounting for new information rather than a 'bug.'
Historical patterns indicate that final benchmark revisions often moderate the preliminary estimates somewhat. Nevertheless, the upcoming revisions are expected to rank among the largest on record since benchmark revisions began being systematically tracked in 1979.
Contextualizing Past and Anticipated Corrections
Revisions of this magnitude occurred last year as well, with the final annual benchmarked data for the 12 months ending March 2024 revealing a downward adjustment of nearly 600,000 jobs, less severe than the initial estimate of an 818,000 job reduction but still the largest such adjustment since 2009. Similar to this year, such large swings often reflect the challenge of capturing rapid and transformative economic changes through modeling, especially considering pandemic disruptions and shifting immigration flows.
Key contributors to these adjustments include falling survey response rates, inaccuracies in the BLS birth-death model which estimates jobs gained or lost through firm openings and closings, and measurement issues related to immigration.
Jed Kolko, economist and former Under Secretary of Commerce for Economic Affairs, highlighted that the last half-decade has experienced intense economic transformations—including the pandemic and altered immigration patterns—that complicate precise employment measurement.
Additional Statistical Adjustments in the Pipeline
The benchmark revision is not the sole update accompanying the January report. The BLS also revises its seasonal adjustment models and refines the birth-death model itself, which estimates the net job flows attributable to business openings and closures not captured directly by establishment surveys. These updates affect the past five years of reported seasonally adjusted employment data, ensuring the service’s ongoing relevance and statistical rigor.
Collectively, these revisions and methodological adjustments provide a richer, more accurate depiction of the labor market’s evolution, supporting informed economic analysis and policy formulation.