Stronger-Than-Expected Jobs Report Fuels Trump Push For Rate Cuts
The U.S. economy added 130,000 jobs in January, far surpassing expectations and giving President Donald Trump a powerful new talking point in his push for lower interest rates. The Bureau of Labor Statistics released the data Wednesday after a one-week delay caused by the recent partial government shutdown.
Economists had predicted a gain of only 55,000 jobs for the month. Instead, hiring came in more than double that, while the unemployment rate ticked down to 4.3%. Stocks climbed and Treasury yields rose following the surprise release, signaling investor optimism.
Trump responded quickly, calling the jobs report “far greater than expected” and renewing his call for the Federal Reserve to cut rates. “The United States of America should be paying much less on its borrowings,” the president said. He claimed that slashing rates could save taxpayers as much as $1 trillion per year in interest payments.
The Federal Reserve has so far resisted Trump’s push. It kept rates unchanged in January, pointing to a still-strong labor market and persistent inflation above its 2% target. Fed Chair Christopher Waller said last week that the central bank would remain “data-driven” in determining the path forward.
Job growth in January was led by the healthcare and construction sectors. Healthcare alone added 82,000 positions, mainly in outpatient care. Construction payrolls also saw solid gains, driven by a rebound in residential and infrastructure projects. By contrast, financial services shed jobs, while federal government employment dropped by 34,000 as deferred resignation agreements came into effect.
The upbeat numbers contradicted earlier comments by National Economic Council Director Kevin Hassett, who had cautioned against overreacting to a potential slowdown in job creation. “One shouldn’t panic if you see a sequence of numbers that are lower than you’re used to,” he said Monday, pointing to demographic trends and improved productivity.
Wednesday’s report did include downward revisions to past figures. The Bureau adjusted total payroll growth for 2025 from 584,000 to just 181,000 after comparing survey responses with actual payroll data. Still, the unexpected strength in January has revived momentum around Trump’s economic message.
The report’s release comes at a critical time for the administration, as the president ramps up his midterm push and touts the benefits of his America First economic agenda. With inflation still elevated and borrowing costs a growing concern, Trump is betting that continued strength in job creation will pressure the Fed into delivering the rate cuts he’s demanded.