Modest payroll gain and unchanged unemployment

The January employment report will reveal significant downward revisions to payrolls in 2025 and, due to an updated methodology for the birth-death model, the initially reported payroll gains for this year will be lower than we’ve been used to. Accordingly, despite some positive signs from the survey indicators, we expect a rise in payrolls of only 30,000 for January. Despite that muted gain, we expect the unemployment rate to be unchanged at 4.4%.