February 18, 2026: January Job Gains Mask Labor Market Weakness

Last week, the financial media celebrated a stronger than expected jobs report, with payroll growth of 130,000 nearly doubling the 65,000 consensus forecast. This was the largest gain in nonfarm payrolls in 13 months. While the report was positive on the surface, a deeper look reveals a less encouraging picture.

Earlier months experienced substantial downward revisions, including a major benchmark adjustment that reduced 2024–2025 employment levels by more than one million jobs—on top of the half million jobs already revised away from 2024. In 2025, payrolls grew by only 118,000, a figure that could easily be erased in next year’s revision, especially given disruptions in the Bureau of Labor Statistics’ data collection during the government shutdown. Although January showed some signs of improvement (at least before future revisions), the overall trend in employment growth over the past few years has been weaker than previously understood.

Moreover, most of January’s reported job gains came from the healthcare and social assistance sectors. These sectors are supported by long-term demographic forces, particularly an aging population. More cyclical industries saw limited or negative job growth, and government employment also declined.

Overall, the report paints a murky picture: payroll growth appears modest but is concentrated in a few sectors and could be revised downward in the future.

Weekly Market Update: February 18, 2026