Reports of six-digit January U.S. jobs growth warmed an already 76-degree day on Wednesday in Miami, with just a few clouds among the economic numbers and overhead on the first day of the Miami International Boat Show.
For Drew Pope, president of the 16-member Independent Boat Builders Inc., the phrase of the week so far seems to be “cautious optimism.”
“On the first day of the boat show — which is reserved for industry professionals and VIP attendees — I observed several deals being closed at our builders’ booths,” Pope told Trade Only Today. “These well-qualified buyers were likely already narrowing their choices among a few prospective products, but it was still an encouraging sign to see transactions happening so early in the show.”
Pope said that not all of his IBBI member builders are exhibiting in Miami, “but the ones that are here are hoping to carry strong momentum from earlier shows into the rest of the boat show season.”
Pope said the Labor Department’s January jobs report “reinforces the cautious optimism we’re hearing across the industry heading into 2026. Builders are continuing to closely monitor field and aging inventory, and some are evaluating modest production increases to meet improving demand in select segments and regions. That said, any adjustments are far more measured than what we saw during the post-Covid recreational boating boom.”
Shawn DuBravac, chief economist at the National Marine Manufacturers Association, agreed that January’s delayed jobs report “looked solid.”
“Payrolls rose by 130,000, easily beating expectations,” DuBravac told Trade Only Today. “Private payrolls increased an even stronger 172,000, as government employment declined during the month.
“The unemployment rate edged down to 4.3%,” DuBravac added. “Perhaps even more importantly, average hourly earnings rose 0.4%, and total private-sector hours worked increased 0.4%. Taken together, those gains lifted aggregate weekly earnings by 0.8%, matching some of the strongest monthly income gains of the past couple of years.”
DuBravac said that combination supports consumer spending and suggests that the economy is continuing to expand, even if at a measured pace.
“That said, annual benchmark revisions materially reduced reported job gains in 2025, reminding us that the labor market was less robust than previously thought,” he said. “January’s strong numbers could also be revised down in future reports.”
The Labor Department, in an annual revision of jobs numbers, reported that job growth was nearly 900,000 smaller in the 12-month period that ended in March 2025 than was initially reported.
“Job growth for all of 2025 was just 181,000, compared to the initial estimate of 584,000,” explained Ian Wyatt, chief economist at recreational marine lender Huntington National Bank. “While these revisions were anticipated and even [Federal Reserve chairman Jerome] Powell commented that the Fed expected these downward revisions, it is still concerning that the economy did not add jobs from April through December last year.
“The lack of job growth over the past year partly reflects a supply story,” Wyatt told Trade Only Today. “The shift in immigration policy has greatly slowed the growth of the labor force. But the slowdown also reflects a softer demand for labor, particularly amongst jobs requiring a college degree.
“Yes, it is good news to see the unemployment rate hold steady (not a statistically significant move), and it was a nice surprise on the upside with jobs growing by 130,000,” Wyatt said. “Job growth was concentrated in a few sectors: health care, social assistance (largely home health aides) and construction.
“Given recent announcements of very large spending on data centers over the coming year, we expect many contractors will be very busy and the sector will continue to add jobs,” he added. “The report also showed people are still getting raises, with average hourly earnings rising 3.7% over the past 12 months. For people with jobs, raises are outpacing inflation, and our spending data shows solid growth in consumer spending continuing through January.
“The benefits of the tax bill passed last year are really boosting consumer paychecks this year, and we expect much larger refunds in March and April and larger paychecks, thanks to smaller deductions for taxes that started in January. We see these factors driving solid consumer spending growth through spring.”
DuBravac said the composition of the nation’s job growth is particularly important for the boating industry. The health care sector added 82,000 jobs in January, and social assistance employment added 42,000 more. Construction, as Wyatt noted, was also a solid gainer, adding 33,000 jobs.
Countering those advances, federal government employment fell by 34,000 as former workers who accepted a deferred resignation offer last year came off payrolls. The financial activities sector lost 22,000 jobs.
Brian Thompson, an investor and clinical professor of economics at DePaul University in Chicago, agreed with Wyatt that the January job growth “was a bit of a surprise. Similar to previous reports, the job gains were concentrated in a few sectors. Ideally, we want to see more broad‑based gains after revisions to give more confidence for overall growth.”
Thompson also told Trade Only Today that “there is certainly some division across the labor market in terms of areas showing stability, areas experiencing growth and areas facing more challenges. I also think some of the productivity gains associated with AI are beginning to work their way through the job market. This may point to a bit of stagnation or slowing in certain related jobs.”
DuBravac said health care and social assistance have been the largest contributors to job growth over the past two years.
“That tells us job creation is concentrated in service sectors, rather than broad-based cyclical industries like manufacturing or professional services,” he said. “For boating, which is a discretionary, rate-sensitive category, broad middle- and upper-income confidence matters more than isolated sector gains. We are not yet seeing a surge in the kinds of high-income, bonus-driven employment that typically fuels strong luxury discretionary demand.”
Stronger income growth and low unemployment, DuBravac said, “support the kind of buyers who are positioned to transact, not just browse. Larger-than-expected tax refunds should provide some tailwind, but consumers also need to feel comfortable taking on new payments and confident about their financial outlook. Confidence has been depressed, and that will continue to influence larger purchases.”
Thompson said “there is also a clear divergence between high earners who own assets — such as investment securities and homes — and those who work in wage‑based positions, who may be renting, and are not benefiting from gains in the stock market.
“The viewpoints across individuals can be quite different. Those who own assets have benefited over the last several years from rising asset prices. On the other hand, those who do not are more exposed to rising prices and, in some cases, stagnant wages. Over time, consumer sentiment has not been very positive. There is a strong connection between how consumers feel and how they spend. Many people considering large‑ticket purchases may be viewing those decisions through a very different lens, compared to the typical consumer.”
Late last month, the Federal Reserve paused a more than year-long campaign of reductions in its benchmark interest rate, satisfied that the job market is stabilizing while fretting that inflation remained stubbornly above its 2% target rate.
The January job gains, double what most economists were expecting, make it more likely that the Fed will again hold the line on interest rates at its March 17-18 meeting, although the central bank’s policymaking committee will soon have another jobs report to consider. The Labor Department is due to release the February numbers March 6.
“Even if the Federal Reserve anticipates potential downward revisions to recent payroll gains, this [January] report likely reduces the odds of an imminent rate cut at the March meeting,” DuBravac said. “Policymakers have room to wait, given steady employment and firm wage growth. A stable labor market does not create urgency to ease, and the Fed seems to have shifted their sights back to inflation in the near term.”
Wyatt said the strength of the January jobs report, including the solid wage growth it contained, also leads him to expect the Fed to hold rates steady in March.
“If we saw a real rise in the unemployment rate and a drop in the jobs number, the Fed may shift policy, but at this point our expectation for the first cut of 2026 has been pushed back to early summer,” he said.
Pope, of the IBBI, agreed that the stronger-than-expected January jobs number “could reduce near-term pressure to cut rates, while still-weak underlying labor market trends and consumer caution could temper big financing decisions, like new boat purchases, as we head into the spring selling season.”
Rate cuts or not, is the U.S. economy in 2026 a good place to start a new business or expand an existing one?
Speaking personally, DePaul economist Thompson said he likes to remain optimistic.
“I do believe there are considerable business and growth opportunities ahead,” he said. “However, I would caution that selectivity across market segments and specific industries is important.
“The overall environment matters — factors such as interest rates and consumer spending directly affect related businesses,” he added. “Much of what we’re discussing here is central to the overall health of the economy. The mindset of the consumer is something worth keeping a close eye on.”
Pope said boatbuilders “should remain judicious and keep a close eye on inventory levels. A single positive jobs report or a 25-basis-point rate move is unlikely to be enough on its own to justify increasing production or expanding into new markets.
“That said, a combination of positive economic tailwinds — along with reduced volatility and uncertainty — could signal more favorable conditions to support growth in the near term,” he added. “The builders best-positioned to succeed will be those that remain agile and responsive as conditions evolve.”
