The Department of Labor and Employment (DOLE) attributed the 5.8 percent unemployment rate in January 2026 to the conclusion of temporary positions after the holiday season.
The agency said workers leaving short-term assignments after the holidays largely explain the rise in unemployment.
Employment fell by 1.489 million from December 2025 to January 2026 as seasonal roles in retail, services, and other sectors ended.
Total employment also declined year on year, from 48.89 million in 2025 to 47.94 million in 2026, Dole reported.
Jobs in wholesale and retail trade dropped by around 888,000, while service and sales positions decreased by about 772,000, reflecting the temporary nature of holiday hiring.
Seasonal factors, including agricultural off seasons and lower demand in construction and farming, also contributed to the decline in employment, the agency added.
Despite the downturn, wage and salary jobs rose from 30.6 million in January 2025 to 32.96 million in January 2026, showing gains in more stable employment.
DOLE said addressing unemployment requires sustained efforts to promote quality work, improve productivity, and expand opportunities for women, youth, and older workers. The agency added it will pursue region-specific strategies supported by stronger labor market data to guide policy decisions.