The Trump administration spent recent days warning markets to brace for a terrible January jobs report, which seemed plausible since the administration has deported a lot of the people who drove job creation over the past four years, and early private-sector employment data was grim.

Instead, the administration’s closely watched first jobs report of 2026 surprised very much to the upside, with a whopping 130,000 net jobs created in January. That’s better than in any month last year and almost double the consensus of economists. Stock markets rejoiced, and bond markets reveled—or they did briefly, before slipping back again into nearly neutral territory.

The Trump administration spent recent days warning markets to brace for a terrible January jobs report, which seemed plausible since the administration has deported a lot of the people who drove job creation over the past four years, and early private-sector employment data was grim.

Instead, the administration’s closely watched first jobs report of 2026 surprised very much to the upside, with a whopping 130,000 net jobs created in January. That’s better than in any month last year and almost double the consensus of economists. Stock markets rejoiced, and bond markets reveled—or they did briefly, before slipping back again into nearly neutral territory.

The preliminary January jobs numbers are so good, especially in light of the lackluster months that preceded them, as to raise eyebrows and questions.

The Bureau of Labor Statistics, which compiles the monthly employment reports, also noted as part of its regular revisions that job creation in the United States last year was not, as previously thought, 584,000 net jobs, but actually only 181,000. The first year of President Donald Trump’s second term was already remarkable for being the worst in terms of job creation outside a recession since 2003, but it now turns out to have been much worse than thought. 

And yet, the Trump administration said on Wednesday that nearly as many jobs were created just last month as in the entirety of 2025. In every month but one in 2025, job creation numbers were eventually revised downward. That might put an asterisk next to Wednesday’s rosy jobs report, as preliminary monthly estimates are often revised in the following months.

“The surprise today was the new data for January, a very healthy gain, and coming the same month as the benchmark revision [to prior employment data] makes the 130,000 look even better,” said Jed Kolko, a senior economist at the Peterson Institute for International Economics, a Washington, D.C.-based think tank.

The employment data, preliminary as it is, is so important for Trump’s economic agenda because he campaigned and won office a second time on a promise to use aggressive economic policies to boost employment, especially in blue-collar industries; curb inflation; and force other countries to make trade deals that are favorable to the United States. So far, none of those promises have really materialized.

One reason to be at least a little skeptical about the great January employment report, beyond the Trump administration’s political meddling with the independent agency that oversees such data, is that the economists taking the pulse of the U.S. economy in every corner of the country did not spot any signs of this hiring binge in their most recent report, known as the “beige book.” Instead, the January beige book, compiled from data from all 12 districts of the U.S. Federal Reserve, is replete with examples of companies either halting hiring altogether or hiring only to replace departed employees. (Another constant is the headache caused by higher costs due to the Trump administration’s sweeping tariffs.)

“Employment was mostly unchanged in the most recent period, with eight of the twelve Districts reporting no changes in hiring. Multiple Districts reported an increase in the usage of temporary workers, with one contact reporting this allows them ‘to stay flexible in uncertain times.’ When firms were hiring, it was mostly to backfill vacancies rather than create new positions,” the bank concluded.

“The real puzzle is the low hiring rate. It is unusual to have fairly low unemployment and so little hiring, and that is what makes this moment so different than any labor market in decades,” said Kolko, who was previously the undersecretary for economic affairs at the Commerce Department.

Another reason to be underwhelmed by the jobs report is that, when the employment numbers are broken down by sector, it becomes clear that the United States has essentially become a giant health care facility, but is shedding jobs in every other sector of the economy. The only area that showed growth was health care, while sectors such as mining and manufacturing continued to shrink, as they did all last year as well. More than the entirety of all jobs created since Trump returned to the White House are in health care and private education.

At any rate, lower job growth was baked into the Trump administration’s plans from the beginning. By cutting the flow of immigrants into the economy and deporting many who were already in the country, the administration has deliberately administered a supply-side shock to the labor force. Economists warned about precisely this, and others have quantified how lower immigration leads to lower economic growth with no offsetting benefits elsewhere.

This week, Trump administration officials appeared to admit as much: White House economic advisor Peter Navarro said that the lack of immigrants means fewer jobs. And the other administration argument, that at least the jobs that remain are for native-born Americans, is false: That was the only population segment that saw unemployment rise last year.

And while the Trump administration is celebrating the first nonghastly monthly employment report in more than a year, it is actually bad news for the thing that Trump cares about most: lower interest rates. At least when the labor market was officially anemic, as during much of 2025, officials at the Federal Reserve had a legitimate reason to lower interest rates despite worries about stubborn inflation. 

Trump wants them to keep cutting rates a lot more, which is why he is ousting Fed governors, investigating the Fed chairman, and nominating friendly faces for the job. But to the extent that the latest jobs report shows a resilient labor market, there will be little reason for the Federal Reserve to cut lending rates more than already planned in the second half of the year, if even that.

The upshot of the first full year of Trumponomics 2.0 is the worst nonrecession employment record in a generation, deliberately lower growth due to self-imposed trade barriers and higher costs, a weaker dollar and doubts about the continued role of the United States as the world’s economic steward, and worries that Trump may have destroyed U.S. agriculture. Other than that, it’s all positive.