Today’s jobs report came in above expectations, but underlying this positive month were large negative revisions to the 2025 jobs numbers and a continuation of the lackluster growth seen in sectors that employ blue-collar workers. Unemployment fell to 4.3 percent in January 2026, and some relief was offered to workers as the economy gained 130,000 jobs this past month. But under the hood were downward revisions to last year’s data showing that the economy only added 181,000 jobs overall in 2025, or an average of 15,000 jobs per month—with an overwhelming 93 percent of jobs added before “Liberation Day” in April. These revisions were particularly negative for workers in blue-collar jobs that tend to be stable and pay well, who are experiencing a labor market that does not usually exist outside of recessions.
Blue-collar job growth went negative
In 2025, job growth slowed for workers across nearly every industry. But industries that employ blue-collar workers actually lost jobs overall. (see Figure 1) In blue-collar industries—such as manufacturing, construction, logging and mining, transportation and warehousing, and utilities—a cumulative total of nearly 166,000 jobs were lost from February 2025 to January 2026. Although the construction and utilities industries added 44,000 and 9,200 jobs, respectively, during this period, these gains were not enough to make up for job losses in other blue-collar industries. Moreover, these gains pale in comparison to those seen during the same time frame the year prior, when the construction industry added 141,000 new jobs and the utilities industry added 10,600 new jobs.
Skilled trades and labor-intensive workers have been in high demand for some time, often with labor shortages occurring in specialized occupations. The gap has only been exacerbated by the Trump administration’s policies, such as chaotic tariff announcements and severe measures against immigration, that have shortchanged industries like construction, where certain skilled trades have an insufficient supply of native-born workers. Furthermore, weaker wage growth for noncollege workers compared with their college-educated counterparts runs counter to President Donald Trump’s claims that these policies would be a boon for the working class.
The working-class majority received less than a quarter of the growth over the past year
Working-class people—defined here as workers without a four-year college degree—experienced some of the greatest consequences of Trump’s economy, with fewer job prospects and growing economic inequality. Throughout the summer of 2025, working-class people struggled to gain opportunities in the labor force, while college-educated workers’ employment continued to grow. Working-class people did see some employment gains in the winter of 2025, but this job growth was minimal compared to that of college-educated workers. Positive growth for noncollege workers in January did not make up for weak growth in 2025. Workers without college degrees made up 24 percent of the total job growth from February 2025 to January 2026. Those with bachelor’s degrees or higher, meanwhile, made up 76 percent of total job growth, despite representing less than 40 percent of the total labor force.
Though there has been more job growth for those with bachelor’s degrees, working-class graduates of trade programs have outperformed the college-educated when it comes to finding postgraduate employment. From January to October 2024, the share of recent graduates who completed a vocational program and were employed was 75.2 percent, compared with 69.6 percent for those with a bachelor’s degree—meaning those who graduated from a trade school had more success finding a job than those who graduated from a four-year university that same year. Despite their successful job placement and strong potential earnings in numerous blue-collar occupations, vocational school graduates only accounted for 114,000 of the degrees received in 2024, compared with the nearly 1.25 million bachelor’s degree recipients in that same time frame.
Nominal wage growth was, for a brief period from 2021 to 2024, faster for the non-college-educated than for those with bachelor’s degrees—marking the first time this has happened in the 21st century. Noncollege workers’ wage growth reached a peak, at nearly 7 percent, in March 2023, when inflation was eating up roughly 5 percentage points of that wage growth. That trend has since reverted to be more aligned with historical patterns. However, the gap between groups has increased, with the inequality of wage growth between the college-educated and the working class growing to levels we haven’t seen since the recovery from the global financial crisis. Perhaps this inequality is one of the underlying reasons consumer sentiment has plummeted over the past year.
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Conclusion
Working-class jobs in industries such as manufacturing and construction have historically provided decent wages and strong union benefits. The decline in blue-collar employment over the past year is emblematic of a segmented economy that is growing for some workers in terms of both jobs and wages while leaving other industries and groups of workers behind. The Trump administration’s immigration and tariff policies have particularly affected these blue-collar industries.
The authors would like to thank Lily Roberts, Natalie Baker, Karla Walter, Aurelia Glass, Jazmine Amoako, Bill Rapp, Steve Bonitatibus, and Mona Alsaidi for their feedback and guidance on this column.