Jobs report trounces expectations, but 2025 revisions muddy picture

• January U.S. nonfarm payrolls beat expectations (+130K vs +55K estimate), with unemployment dipping to 4.3%.
• However, 2025 job creation was dramatically revised lower (from 584K to 181K), with a net loss of 1,000 jobs in the last six months of 2025.
• Fed rate cut expectations for the next meeting have significantly slumped, but some analysts still anticipate more cuts than currently priced in for the year.
• The U.S. Congressional Budget Office (CBO) raised its deficit outlook, projecting worsening figures through 2036.

The January U.S. jobs report showed stronger-than-expected payrolls and a dip in unemployment, but significant downward revisions to 2025 job creation muddy the picture. This has reduced near-term Fed rate cut expectations, though economists remain divided on the total number of cuts this year, while the CBO's raised deficit outlook adds fiscal concerns.