U.S. job growth accelerated in the month of January compared to the anemic growth seen in December, according to a report released by the Labor Department on Friday, although the pace of growth still fell well short of economist estimates.
The report said non-farm payroll employment increased by 113,000 jobs in January following a slightly upwardly revised increase of 75,000 jobs in December.
Economists had been expecting employment to climb by about 180,000 jobs compared to the addition of 74,000 jobs originally reported for the previous month.
Despite the weaker than expected job growth, the unemployment rate still edged down to 6.6 percent in January from 6.7 percent in December. The unemployment rate had been expected to come in unchanged.
With the unexpected decrease, the unemployment rate fell to its lowest level since hitting 6.5 percent in October of 2008.
The continued decrease by the unemployment rate came as employment measured by the household survey rose by 638,000 and the labor force increased by 523,000.
While the job growth was weaker than expected, the report still showed a significant increase in employment in the construction sector, which added 48,000 jobs in January after cutting 22,000 jobs in December.
The professional and business services, leisure and hospitality, and manufacturing sectors also saw notable job growth during the month.
On the other hand, the Labor Department said the government cut 29,000 jobs and employment in the retail sector fell by 12,900 jobs.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Payroll growth appears to have slowed but, given the strength of economic growth in the second half of last year, we expect to see a rebound in the monthly gains over the next few months."
"Moreover, with the unemployment rate down to only 6.6%, the Fed should continue to wind down its asset purchases," he added.
The Labor Department noted that average hourly employee earnings rose by 5 cents to $24.21 in January. Compared to the same month a year ago, average hourly earnings have risen by 46 cents or 1.9 percent.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.