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The latest US jobs report came out yesterday, and it paints a mixed picture. In the Vox employee Slack, senior editor Benjy Sarlin explained it to us as a bit of a “both/and” situation: The very latest numbers, for last month, came in higher than economists expected — and job growth over the past year was dismal.
Those simultaneous realities help underscore the strangeness of our current economic moment. While the economy is growing overall, that prosperity isn’t felt by most ordinary people. Hiring remains lackluster-to-fine, as this latest jobs report shows. Economic gains flow overwhelmingly to businesses and shareholders, not workers. Affordability, meanwhile, ranks among most Americans’ biggest policy concerns.
On Tuesday, a striking new Gallup poll found that optimism has cratered to record lows among US adults: Today, four in 10 people believe their life will be worse in five years than it is now.
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Those diverging narratives — the pessimism and anxiety workers feel, on one hand, and the top-line expansion on the other — say a lot about the true state of the economy under President Donald Trump. Incidentally, his administration is trumpeting the latest jobs report as a “blockbuster, expectation-shattering” triumph. (We’ll get to that hyperbole in a moment.)
In other news, my Vox colleagues are following the abrupt closure and reopening of the El Paso airport, which briefly and needlessly stoked fears that the US could initiate strikes in Mexico. We’re also watching the news out of British Columbia, where nine people were killed in a mass shooting on Tuesday, and out of Arizona, where the search for Nancy Guthrie continues.
But this morning, let’s focus on the latest jobs report and what it tells us about the current, paradoxical economic moment.
“Not a recession,” but not far from it
The Bureau of Labor Statistics drops new jobs numbers each month, but the February report is the biggest of the year.
In that release, the agency not only provides monthly estimates for things like job gains, average earnings, and unemployment, but also updates all of the past year’s numbers with more comprehensive, year-end data.
On both of those fronts, the jobs report released yesterday was a pretty big deal. Economists have for months bemoaned the sorry state of hiring in the US.
In January, however, the US economy added 130,000 jobs — not a “blockbuster” number, by historical standards, but above economists’ (admittedly low) expectations.
At the same time, the adjustments to last year’s numbers made it clear that 2025 was an even worse year for jobs than economists anticipated. It’s “not quite a recession,” the economist Justin Wolfers said on Wednesday, “but not far above it.”
Over the course of the entire year, the economy added just 181,000 positions — making it the worst year for hiring, outside a recession, since 2003. In January, June, August, and October of last year, the US actually lost more jobs than it gained.
That’s pretty wild, given that — according to other measures — the economy is doing well: The stock market is at record highs, and growth was very strong last quarter. Even amid that boom, however, most industries haven’t been hiring. In fact, the US would have lost jobs in 2025 if it weren’t for gains in health care and related fields, where companies are always and forever hiring. (We’re not getting any younger, as a nation!)
Even in January, when things appeared to stabilize a bit, over 60 percent of the job growth came from those sectors. Meanwhile, the economy lost tens of thousands of jobs in financial services and government, as federal workers who took deferred resignations came off the payroll last month.
As the economist Heather Long wrote for Vox earlier this month, three factors help explain the so-called “jobless boom.” Understanding those factors is key to understanding not only the past year, but where the economy is headed next.
1. First, slow hiring was a correction from 2022 and 2023. Companies went a bit overboard with hiring in the immediate aftermath of the Covid-19 pandemic, when consumer activity surged back to life and demand for workers was intense. But what goes up has to come down, and business leaders are “right-sizing” their staff by hiring more slowly.
2. Trump’s dramatic (and erratic) policy moves caused some employers to pump the brakes. Trump slapped incoming goods with the highest tariffs since the 1930s, creating widespread uncertainty that encouraged some businesses to stop hiring or lay off employees. The president also cut down on legal immigration and launched a mass deportation program, which has constrained the supply of available workers in some fields. And his efforts to slash the size of the federal workforce have been enormously successful.
3. Some companies invested in AI over human employees. There isn’t much proof that AI is actually replacing jobs yet, but it definitely plays into firms’ hiring decisions. Companies poured a ton of cash into AI and robots last year, which suggests they invested less money in hiring actual humans.
This last factor might prove especially pertinent in 2026. As my colleague Eric Levitz observed this morning, many technologists expect AI-related job displacement to intensify and accelerate with the advent of agentic AI tools like Anthropic’s Claude Code and OpenAI’s Codex. “There’s little question that agentic AI is going to reshape the white-collar economy,” he wrote.
In other words, hiring may very well have stabilized last month… and that stability may not last terribly long. Consider it another “both/and” situation.
