January 2026 Market Trends Report
The first jobs report of 2026 came in stronger expected. After a year marked by widespread losses and growth largely confined to healthcare, employers added 130,000 jobs, and unemployment declined to 4.3%, according to the Bureau of Labor Statistics.
With further revisions to the 2025 data, just 181,000 jobs were added through all of 2025. (Compare that to 1.46 million jobs added in 2024.) This makes the strong start this year both notable and essential for sustaining economic momentum.
The manufacturing and construction industries bounced back from losses last month, adding 5,000 and 33,000 jobs respectively, while warehousing and storage companies cut 6,100 jobs following layoff announcements from industry giants, including Amazon and Nike.
Additionally, healthcare and social assistance still dominated job gains, accounting for 123,500 of the 130,000 jobs added in January.
While January’s job growth is encouraging, employers across many sectors appear to be approaching hiring decisions with caution. The job market is still mostly frigid in this late-winter report, even as the unemployment rate improved after slowing ticking up during the last months of 2025.
Jobs Market Overview: January 2026
4.3%
Overall unemployment rate
Unemployment ticked down for the second month in a row (after increasing from 3.9% in mid 2024) to a high of 4.5% in 2025.
130k
Jobs added
2026 kicked off with the strongest job gains in months, largely dominated by healthcare employment.
62.5%
Labor force participation rate (LFPR)
The LFPR remains stable, slightly down from last year’s rate of 62.6%.
Industry Employment Trends
OVERALL ECONOMY
+130k
Monthly job change
(+359k year over year)
| Industry | Monthly Job Change | YOY Difference |
| Manufacturing | +5k | -83k |
| Automotive | +0.5k | +0.4k |
| Warehousing & Storage | -6.1k | -54.2k |
| Architectural & Engineering | +4.6k | +33.3k |
| Construction | +33k | +44k |
Source: Bureau of Labor Statistics' Economic News Release
Warehousing & Storage Outlook
In 2026, warehousing and storage companies will sharpen their focus on tech-enabled efficiencies and tightening operations. Automation and AI continue to reshape how warehouses are used and managed — and the skills needed to run them.
These capabilities have become table stakes in a market shaped by fast-paced e-commerce demand, signaling a hiring shift that has been sideways since 2022.
While this horizontal hiring trend could continue through 2026, the warehousing industry is anything but static. To remain competitive, employees must develop new skills and adapt to emerging technologies, while organizations should prioritize investments in upskilling and training. Without these efforts, companies risk vying for a limited talent pool that’s highly sought after across various industries.
Tim Callaghan
Director of Strategic Sales — Distribution & Logistics
Sector-by-Sector News: January 2026
Warehousing & Storage Jobs Report
Month-over-month jobs change: -6,100
Year-over-year jobs change: -54,200
January Logistics Managers' Index: 59.6*
*A PMI reading above 50% suggests economic activity is expanding.
The LMI (Logistics Managers’ Index) came in strong, reversing a prolonged downward trend and climbing 5.9 points to 59.6. Inventory levels drove this momentum as post-holiday restocking picked up.
While this post-holiday increase is modest compared to last year, the slower pace of expansion may signal greater stability ahead. The overall index remains lower year over year — down from 62.0 in January 2025 — but the less drastic rate of expansion could be positive for the industry as the year progresses.
Transportation and warehousing activity is encouragingly stable, with capacity levels standing out as the only metrics not expanding in the broader LMI report.
Still, the sector has not been immune to workforce reductions. Transportation and warehousing companies cut 11,200 jobs, following layoffs announced by Amazon and Nike as the logistics industry pushes for increased automation and structural shifts.
Looking ahead, respondents cited concerns around labor availability, tariffs and surging prices. Despite these pressures, they expect the index to realize stronger-than-average growth in the months ahead.
Construction Jobs Report
Month-over-month jobs change: +33,000
Year-over-year jobs change: +44,000
Construction led the pack of industries that reported employment growth in the BLS’ Employment Situation Summary. Employers added 33,000 jobs month over month and 44,000 year over year.
According to Associated Builders and Contractors (ABC), most firms expect growth in the months ahead, yet their Backlog Indicator dropped to its lowest reading since early 2022. This shows a cooling project pipeline across the industry, with smaller contractors experiencing sharper declines, while large contractors (over $50M in annual revenue) saw backlog increases over the past year.
Overall, contractors are optimistic, anticipating growth in sales, profit margins and staffing levels, an outlook that stands out as backlogs have continued to shrink. These mixed signals may reflect expectations that borrowing costs could decline in 2026, potentially unlocking projects that were postponed last year.
Manufacturing Jobs Report
Month-over-month jobs change: +5,000
Year-over-year jobs change: -83,000
January Manufacturing PMI: 52.6% (↑4.7% YOY)
*A reading above 50 indicates logistics are expanding.
Manufacturing activity expanded for the first time in nearly a year, rising from 47.9% in December to 52.6% in January, according to the Institute for Supply Management.
Manufacturers reported noticeable momentum in several areas:
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New Orders (57.1%)
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Production (55.9%)
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Backlog of Orders (51.6%)
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Supplier Deliveries (54.4%)
New Orders expanded for the first time since August, reaching the strongest growth rate in years. Production also posted its best reading since early 2022.
This indicates factories are ramping up output to support higher order volumes that are expected to remain stable in the months ahead.
Despite stronger demand and increased production activity, hiring remains constrained. Many large manufacturers continue to invest in automation, reducing the need for higher volumes of light industrial roles while increasing demand for skilled workers who canoperate and maintain advanced equipment.
The rebound in demand and production is a welcome development after an extended slump. If New Orders stay strong, manufacturing growth could persist, though additional data in the coming months will be needed to confirm a lasting turnaround.