Payden & Rygel: Zero. Zip. Nada.

12 februari 2026

Verenigde Staten Arbeidsmarkt

Data released on Wednesday showed that the U.S. economy saw nearly no job growth in 2025. While the unemployment rate remained relatively stable at 4.3% as of January 2026, we remain concerned about underlying weakness in the jobs data.

There are a few reasons why we are more concerned about the labor market. For example, the January jobs report included the annual benchmark revisions showing a year of near-zero job growth in 2025, which has occurred only once outside a recession since data collection began almost a century ago, in 2003.
Additionally, the breadth of job growth remains narrowly concentrated in non-cyclical sectors, primarily in healthcare & education, suggesting more weakness in labor demand unrelated to changes in labor supply.
We also question whether the unemployment rate is the best measure of full or equilibrium unemployment. An intuitive way to grasp the concept is the v/u ratio, which compares vacancies (job openings) to the pool of unemployed workers. With revised data for December 2025, the v/u ratio is 0.87, well below full employment and falling.
Is there a case for a reacceleration in job growth? Yes, recent PMI data suggest that activity in both the manufacturing and services sectors is expanding, and aggregate real consumer income growth continues to hold up.

For now, though, our assessment of the risks still points to a weakening labor market rather than a stabilizing one. As a result, we think there’s still a strong case for additional rate cuts in 2026 to protect the labor market from further deterioration.