January Jobs Report Beats Expectations as Unemployment Edges Lower

CRP update | Sugar announcements | Trump and USMCA | Energy Council nears deal on year-round E15 legislation

LINKS

Link: Video: Wiesemeyer’s Perspectives, Feb. 1 
Link: Audio: Wiesemeyer’s Perspectives, Feb. 1 
 

Updates: Policy/News/Markets, Feb. 11, 2026

TOP STORIES—January jobs report beats expectations as unemployment edges lowerStrong health care and construction hiring offset federal job losses; rate-cut odds fade ahead of March Fed meeting U.S. job growth came in stronger than expected in January, offering fresh evidence that the labor market remains resilient despite mounting policy uncertainty and a recent government shutdown delay in the data release. According to the Bureau of Labor Statistics (BLS), nonfarm payrolls increased by 130,000 in January — nearly double market expectations. The unemployment rate ticked down to 4.3%, reinforcing the narrative of a still-tight labor market. Sector breakdown: private gains, federal declines. Hiring was concentrated in several key private-sector industries:• Health care: +82,000 jobs… a sharp acceleration from its 2025 monthly average of 33,000.• Construction: +33,000 jobs… a notable pickup after largely stagnant hiring throughout 2025.• Social assistance: Also posted gains.• Federal government: −34,000 jobs, reflecting deferred resignation offers and ongoing workforce reductions. Of note: BLS noted that since peaking in October 2024, federal employment has fallen by 327,000 jobs — a 10.9% decline. The average workweek edged up 0.1 hour to 34.3 hours, another modest sign of labor-market stability. Revisions to November and December payroll data trimmed a combined 17,000 jobs — a relatively minor adjustment that did little to offset January’s upside surprise. Implications for the Federal Reserve. The stronger-than-expected report is likely to ease concerns that labor-market softness would force the Federal Reserve to cut rates sooner rather than later. Following the data release, the CME FedWatch tool showed a sharp rise in expectations for the Fed to hold rates steady at its March 18 meeting. The probability of no change jumped to 94%, up from roughly 80% prior to the report. The labor data complicates arguments for near-term easing — particularly given ongoing inflation risks tied to trade policy and tariffs, which several analysts have warned could push price pressures higher later this year. All eyes now on CPI. The next major data point for markets is the Consumer Price Index report scheduled for Feb. 13. If CPI remains elevated or comes in above expectations, it would likely reinforce expectations that the Fed maintains its current policy stance in March — and potentially longer. In short, January’s report signals that while some pockets of government employment continue to contract, the broader private-sector labor market remains firm — a dynamic that keeps the Fed in wait-and-see mode as inflation data takes center stage.Annual revisions showed payroll growth was about 900K lower in the year through March 2025 than previously reported, confirming earlier estimates that job gains had been overstated. Impact: The U.S. added 181,000 jobs in 2025, down from the originally reported 584,000. The combination tells a nuanced story: hiring is moderating, but layoffs remain limited enough to keep the jobless rate contained. For policymakers and investors, that mix reinforces the view of a labor market that is cooling gradually rather than cracking. Market reaction: dollar down, yields up. Financial markets offered a mixed response:• The U.S. dollar weakened in early Wednesday trading, suggesting traders may view the slower job growth as mildly dovish for Fed policy.• Stock futures edged higher, extending a risk-on tone that has pushed the Dow Jones Industrial Average to record-high closes for three straight sessions.• Ten-year Treasury yields rose, snapping a four-session decline, as bond traders recalibrated expectations following the lower unemployment rate. That yield move reflects a subtle tension in the data: while headline job creation slowed, the dip in unemployment could keep wage pressures elevated — a dynamic bond markets watch closely. Bigger picture. With equity markets at record highs and the labor market still historically tight, investors appear comfortable with the idea of a “soft landing” — slower growth without a sharp spike in joblessness. But the path forward will depend heavily on upcoming inflation data and Fed communications. If labor conditions stabilize at this level while price pressures persist, rate-cut expectations could be pushed further out — a key risk for both bond and equity markets.—USDA opens general, continuous CRP signups as acreage nears cap1.9 million acres available; competitive enrollments expected with program hovering near 27-million-acre limit USDA on Feb. 10 announced new signup windows for the Conservation Reserve Program (CRP), signaling another year of tight acreage availability as the program operates close to its statutory cap. A General CRP signup will run from March 9 through April 17, while a Continuous CRP signup is scheduled for Feb. 12 through March 20. USDA also indicated that a Grasslands CRP signup will be announced “in the near future.” Acreage tight as CRP nears 27-million-acre cap. USDA said 1.9 million acres are available for enrollment across all CRP categories. The agency described the program as “very close” to its 27-million-acre cap, meaning enrollments are expected to be competitive. The department has not released updated acreage totals since July, but outside analysis from S&P Global Energy last year estimated that CRP enrollment would total roughly 26.5 million to 26.6 million acres as of Oct. 1, factoring in General, Continuous, and Grasslands signups during 2025. The newly available 1.9 million acres aligns closely with expected attrition. About 1.5 million acres of CRP contracts are set to expire on Sept. 30, 2026, suggesting the program remains near its ceiling. Re-enrollments and expiring contracts in focus. USDA reported that 624,000 acres expiring Sept. 30, 2025, were offered for re-enrollment, though the agency has not specified how many of those acres were deemed eligible. With current commodity prices still under pressure, expectations are that many producers with maturing contracts will seek to remain in the program. USDA will again use a batch processing system for Continuous CRP, mirroring the approach used in 2025. Grasslands growth alters production impact. The continued expansion of Grasslands CRP has shifted the program’s footprint. Because Grasslands enrollments largely involve working grazing lands rather than active cropland, CRP is no longer removing as much current row-crop acreage from production as it did in prior cycles. That dynamic — combined with enrollment levels pressing against the acreage cap — could draw scrutiny from lawmakers as they assemble a potential Farm Bill 2.0. With limited room under the cap, any effort to expand conservation enrollment would require either statutory changes or acreage reallocations within the program. In the meantime, producers face another competitive signup season in a program that remains central to both conservation policy and farm-income stability. —Energy Council nears deal on year-round E15 legislationHouse GOP working toward late-February rollout, but Senate path and Freedom Caucus concerns remainThe House GOP’s Rural Domestic Energy Council is reportedly close to finalizing legislation that would allow year-round sales of E15 gasoline, according to a report from Politico citing a lawmaker with direct knowledge of the talks. “The chairs, they’ve made real progress. They’re talking to a broad cross section of stakeholders, including small refiners, and I think they have really figured out what the sweet spot on a deal looks like,” the lawmaker said. “We’re getting real close to what a final deal would look like.” The council — formed by House Republicans after a bipartisan E15 fix was stripped from a broader spending package — has been working to craft a proposal that could balance ethanol industry priorities with concerns from refiners and fiscal conservatives. Council member Zach Nunn (R-Iowa) said the group remains on track to advance legislation by the end of February. “I made it very clear that producers and growers need to have an answer by March 1,” Nunn said, underscoring pressure from the farm and biofuels sectors for certainty ahead of the summer driving season. Still, hurdles remain. The lawmaker quoted by Politico cautioned that “a couple members of the Freedom Caucus” remain skeptical of the broader Renewable Fuel Standard (RFS) framework, signaling potential internal resistance even before the bill reaches the House floor. And even if House Republicans can unify around a package and pass it, the Senate outlook is uncertain. Without knowing the final contours of the House proposal — particularly how it addresses refiners, RFS compliance and potential regulatory guardrails — it is unclear whether the measure could secure the bipartisan support needed to move through the upper chamber. For ethanol producers and corn growers, the timeline is tight. The late-February target leaves little room for slippage if lawmakers hope to provide regulatory clarity before seasonal fuel-blending decisions are made. —House rejects GOP rule shielding Trump tariffs from floor votesThree Republicans join Democrats to block effort that would have delayed IEEPA tariff challenges through July 31 The House narrowly rejected a procedural rule Tuesday that would have kept lawmakers from voting on terminating President Donald Trump’s emergency tariffs through July 31, a rare setback for GOP leadership and a sign of internal Republican unease over the scope of executive tariff authority. The vote failed 214–217, after three Republicans joined all Democrats in opposing the rule. House Republican leaders delayed the vote as they tried to flip members, but ultimately fell short. The three Republicans who voted “no” were:• Rep. Kevin Kiley (R-Calif.)• Rep. Thomas Massie (R-Ky.)• Rep. Don Bacon (R-Neb.) After the defeat, the House Rules Committee met again and advanced a revised rule without the tariff provision — removing the attempted procedural shield. The failed rule would have blocked lawmakers from using expedited procedures to force votes on resolutions disapproving tariffs imposed under the International Emergency Economic Powers Act (IEEPA), including tariffs targeting imports from Canada and Mexico. Because the rule did not pass, the door is now open for a possible House vote on resolutions to disapprove those tariffs. Why the votes may not change policy. Even if the House passes disapproval resolutions, the practical path to actually terminating the tariffs looks steep:• It is unclear whether the Senate would take up — or approve — the resolutions.• Even if both chambers passed them, President Donald Trump would be expected to veto the measures.•The votes likely would not be there to override a veto. As a result, a vote on tariff disapproval would likely function more as political messaging than a mechanism to force an immediate change in tariff policy. —Container traffic slows at U.S. portsNRF’s Global Port Tracker shows December dip, with tariff uncertainty weighing on 2026 outlook U.S. container volumes eased at the end of the year, with new data pointing to ongoing softness tied in part to tariff uncertainty. The latest Global Port Tracker report from the National Retail Federation (NRF) and Hackett Associates shows that U.S. ports covered by the survey handled 1.99 million Twenty-Foot Equivalent Units (TEU) in December — a 1.79 % decline from November and a 6.6 % drop from December 2024. The report projects that container volumes in the first half of 2026 will generally trail year-ago levels. The exception may come in May or June, when comparisons are expected to show gains due to the sharp contraction in container traffic last year following the administration’s Liberation Day tariffs. “With tariffs still a matter of debate in the courts and in Congress, their effect on imports is being clearly seen,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. The data underscore continued volatility in trade flows, with legal and legislative battles over tariff authority — including the use of the International Emergency Economic Powers Act — contributing to cautious import behavior among retailers and supply chain operators. —USDA raises sugar output to record; imports trimmed in 2025/26 outlookStocks-to-use ratio climbs near 16% as production offsets TRQ shortfall and reporting errors corrected USDA boosted its 2025/26 U.S. sugar production forecast to a record 9.410 million short tons, raw value (STRV), while trimming import expectations and signaling a more comfortable supply cushion heading into the new marketing year. Production up, imports down. USDA now pegs imports at 2.243 million STRV, down 11,583 STRV from the prior outlook. The agency increased the projected Tariff Rate Quota (TRQ) shortfall by 50,342 STRV, citing weaker expected shipments from the Philippines. That reduction is partially offset by 38,759 STRV in additional raw sugar high-tier tariff imports that have entered the market since the January WASDE update. The net effect: higher domestic production more than compensates for softer quota imports. Comfortable supply cushion. Total ending stocks for 2025/26 are forecast at 1.940 million STRV, pushing the stocks-to-use ratio to 15.89% — well above USDA’s 13.5% threshold considered adequate for market balance. That elevated ratio suggests less near-term supply tightness and potentially softer price pressure compared to prior years when stocks hovered closer to minimum levels. Refiners’ reporting errors corrected. USDA also disclosed the results of an investigation into 2024/25 reporting by sugar refiners. The agency found that some shipments classified as deliveries for human consumption were incorrectly reported when they were actually transfers to other refiners. Correcting the error: • Reduced reported deliveries by 186,607 STRV, bringing deliveries to 12.340 million STRV• Increased the “shipments less receipts” component of the Miscellaneous category by the same amount Importantly, USDA said the correction did not change overall usage or ending stocks for 2024/25 — meaning the balance sheet fundamentals remain intact. Bottom Line: Record production combined with adequate imports leaves the U.S. sugar market comfortably supplied for 2025/26. With stocks-to-use nearing 16%, supply risks appear muted for now — barring weather or trade disruptions. —USDA reallocates FY 2026 sugar marketing allotmentsFlorida cane sugar authority shifts to Louisiana; beet allocations adjusted among cooperatives without changing overall supply cap USDA has updated Fiscal Year (FY) 2026 domestic sugar marketing allotments, shifting company-level allocations for both cane and beet sugar processors while keeping the overall program totals unchanged. Cane sugar: Florida to Louisiana transfer. Under the revised allotments, USDA is transferring 315,464 short tons, raw value (STRV) of Florida’s FY 2026 cane sugar allocation to Louisiana processors. The move reallocates unused marketing authority from Florida sugarcane processors holding surplus allocation to Louisiana processors facing allocation shortfalls. The action does not alter the national cane sugar allotment — it simply redistributes marketing rights among processors to better align with expected production levels. The adjustment reflects USDA’s routine authority under the sugar program to rebalance allocations when production estimates or processor capacities shift during the fiscal year. Beet sugar: Cooperative adjustments. USDA also announced reallocations among beet sugar processors:•Minn-Dak Farmers Cooperative saw its allocation reduced by 18,201 STRV.• Southern Minnesota Beet Sugar Cooperative had its allocation reduced by 204,443 STRV. Those reductions were redistributed across five other beet processors requiring additional allocation to market expected supplies. As with the cane adjustment, the beet sugar changes do not modify the overall FY 2026 beet sugar allotment. Instead, the changes ensure processors can fully market anticipated production while maintaining statutory domestic supply limits. No change to overall FY 2026 allotments. USDA emphasized that the reallocations do not increase or decrease total FY 2026 sugar marketing allotments. The adjustments are administrative redistributions designed to prevent under-utilization in some regions while avoiding bottlenecks in others. The detailed breakdown of the reallocations is outlined in a Federal Register notice issued by USDA (link). —Sen. Susan Collins launches 2026 re-election campaignIncumbent Republican in Competitive Maine Senate Race Draws Democratic Challengers Republican Sen. Susan Collins (R-Maine) formally announced her bid for a sixth term in the U.S. Senate on Tuesday, kicking off her 2026 campaign with a brief video post that featured her unboxing a pair of New Balance sneakers to symbolize her run. The announcement makes official what many had anticipated: Collins, first elected to the Senate in 1996, seeks to continue her long tenure representing Maine — a state that voted for Vice President Kamala Harris in 2024 and otherwise leans Democratic. Collins is widely expected to be a top Democratic target in 2026. On the Democratic side, Gov. Janet Mills (D-Maine) and oyster farmer Graham Platner are among the leading challengers, each having built substantial campaign war chests ahead of the general election. Without flipping the Maine seat, Democrats could face a more difficult path to retaking control of the U.S. Senate’s slim Republican majority. The race also carries intra-party tension: President Donald Trump recently criticized Collins and other Republicans for supporting a resolution limiting presidential military actions, saying they “should never be elected to office again.” That dynamic — coupled with Collins’ history of occasional departures from national GOP orthodoxy — adds further complexity to what is shaping up to be one of the most closely watched Senate contests of the 2026 cycle. —Trump privately weighs USMCA exit ahead of July reviewBloomberg reports president is questioning whether the U.S. should remain in pact he negotiated President Donald Trump is privately asking aides why the U.S. shouldn’t withdraw from the U.S.-Mexico-Canada Agreement (USMCA), according to a report by Bloomberg Government. While Trump has not formally signaled an exit, the internal discussions add uncertainty ahead of the pact’s mandatory July 1 review. A White House official told Bloomberg the president is keeping his options open, while an official in U.S. Trade Representative Jamieson Greer’s office said simply renewing the 2019 terms is not in the national interest. Greer said negotiations will proceed separately with Mexico and Canada, describing talks with Mexico as pragmatic and discussions with Canada as more challenging. The USMCA governs roughly $2 trillion in annual trade. Any country can withdraw with six months’ notice. Even the threat of a U.S. exit could unsettle markets, disrupt integrated supply chains and complicate trade ties with America’s two largest trading partners. Bloomberg notes Trump could use the prospect of withdrawal as leverage rather than follow through — but the possibility alone raises the stakes for this summer’s renegotiation. —Business groups urge rethink of Section 232 tariff expansionIndustry coalition warns of tariff “stacking,” rising costs as Trump administration broadens trade authorities A coalition led by the U.S. Council for International Business and more than two dozen industry associations is raising fresh concerns about the Trump administration’s expanded use of Section 232 tariffs, warning the policy shift is creating mounting cost pressures for U.S. companies. In a letter to Commerce Undersecretary Jeffrey Kessler, the groups argued that since January 2025 the administration has “dramatically expanded” its use of Section 232 authorities, according to reporting by Politico. The letter points to 12 new investigations and broader tariff inclusion mechanisms that have widened the scope of products potentially subject to national security–based duties. The coalition’s central concern is what it describes as tariff “stacking” — instances where Section 232 duties are layered on top of other existing tariffs. That cumulative effect, the groups said, is creating financial headwinds across supply chains and complicating compliance for importers and manufacturers. Section 232 of the Trade Expansion Act allows the administration to impose tariffs if imports are deemed to threaten national security. The authority has historically been used sparingly, but under President Donald Trump it has become a more aggressive and flexible trade tool. Industry groups are particularly uneasy about the trajectory of policy if the Supreme Court curtails the administration’s use of the International Emergency Economic Powers Act (IEEPA) as a separate tariff authority. Should the Court rule against IEEPA-based tariffs, many in Washington expect the White House to lean even more heavily on Section 232. At this stage, however, there is little indication the administration plans to scale back its expanded Section 232 posture. For businesses navigating overlapping duties, the policy uncertainty — and the potential for further tariff layering — remains a key concern.