Surprising jobs data paints a ‘muddy picture’ of the economy 

What does today's surprisingly strong jobs report mean for the real estate market and mortgage rates in the months ahead? Mixed data signals and a pattern of revisions suggest it may be too soon to say, economists note, but it could be good news for housing. 

The U.S. economy added 130,000 jobs in January, according to the Feb. 11 Employment Situation report from the Bureau of Labor Statistics — nearly twice what forecasters had predicted, and significantly higher than the 50,000 jobs added in December. Gains were highest in the health care and construction sectors, driven by nonresidential specialty trade contractors.

While up year-over-year, the unemployment rate fell slightly from 4.4% in December to 4.3% in January, which also came as a surprise to many economists, and wage growth was strong, rising 3.75% year-over-year.

Revisions muddy the waters: The topline numbers point to a strong labor market — but the report's annual benchmark revisions suggest the situation isn't so clear. 

Labor numbers were revised dramatically lower for 2025, with the BLS estimating that, on a seasonally adjusted basis, only 181,000 nonfarm jobs were added for the entire year, down from a previous estimate of 584,000.

'Cautious optimism': Taken as a whole, however, the report points to a labor market that may be stabilizing rather than deteriorating, according to Jake Krimmel, senior economist at Realtor.com. 

"For housing, today's job numbers strengthen the case for cautious optimism heading into 2026. The labor market continues to look more resilient than robust, but stability in unemployment paired with solid real wage growth is what matters most heading into the spring homebuying season," Krimmel said.

On the other hand… Related data — including a decline in job openings and rising claims for unemployment insurance — could instead signal a weakening labor market, according to Lisa Sturtevant, chief economist at Bright MLS.

"Like a lot of economic data recently, today's employment situation report offers a muddy picture of the health of the U.S. economy," Sturtevant said.

If Friday's inflation report for January is steady, Sturtevant said there could be one rate cut in the first half of 2026.

"But if job growth rebounds, it is harder to see a path toward multiple rate cuts this year," Sturtevant said.

The Federal Reserve paused rate cuts in January and will likely be taking a close look at all of the economic data ahead of its next meeting on March 17-18.

Mortgage rate impact: The strong jobs report didn't cause any big swings in mortgage rates, at least not initially. The average 30-year fixed-rate mortgage ticked up from 6.11% to 6.14% on Feb. 11, according to Mortgage News Daily.

The current 30-year rate remains significantly lower than a year ago, when it was bouncing around the 7% range. That's led to a steady improvement in affordability heading into the spring homebuying season.