ReportWire

Tag: economic indicators

  • ‘No hire’ job market leaves unemployed in limbo as threats to economy multiply

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    WASHINGTON — When Carly Kaprive left a job in Kansas City and moved to Chicago a year ago, she figured it would take three to six months to find a new position. After all, the 32-year old project manager had never been unemployed for longer than three months.

    Instead, after 700 applications, she’s still looking, wrapped up in a frustrating and extended job hunt that is much more difficult than when she last looked for work just a couple of years ago. With uncertainty over interest rates, tariffs, immigration, and artificial intelligence roiling much of the economy, some companies she’s interviewed with have abruptly decided not to fill the job at all.

    “I have definitely had mid-interview roles be eliminated entirely, that they are not going to move forward with even hiring anybody,” she said.

    Kaprive is caught in a historical anomaly: The unemployment rate is low and the economy is still growing, but those out of work face the slowest pace of hiring in more than a decade. Diane Swonk, chief economist at KPMG, calls it a “jobless boom.”

    While big corporate layoff announcements typically grab the most attention, it has been the unwillingness of many companies to add workers that has created a more painful job market than the low 4.3% unemployment rate would suggest. It is also more bifurcated: The “low hire, low fire” economy has meant fewer layoffs for those with jobs, while the unemployed struggle to find work.

    “It’s like an insider-outsider thing,” Guy Berger, head of research at the Burning Glass Institute said, “where outsiders that need jobs are struggling to get their foot in, even as insiders are insulated by what up until now is a low-layoff environment.”

    Several large companies have recently announced tens of thousands of job cuts in the past few weeks, including UPS, Target, and IBM, though Berger said it is too soon to tell whether they signal a turn for the worse in the economy. But a rise in job cuts would be particularly challenging with hiring already so low.

    For now, it’s harder than ever to get a clear read on the job market because the government shutdown has cut off the U.S. Department of Labor’s monthly employment reports. The October jobs report was scheduled for release Friday but has been delayed, like the September figures before it. The October report may be less comprehensive when it is released because not all the data may be collected.

    Before the shutdown, the Labor Department reported that the hiring rate — the number of people hired in a given month, as a percentage of those employed — fell to 3.2% in August, matching the lowest figure outside the pandemic since March 2013.

    Back then, the unemployment rate was a painful 7.5%, as the economy slowly recovered from the job losses from the 2008-2009 Great Recession. That is much higher than August’s 4.3%.

    Many of those out of work are skeptical of the current low rate. Brad Mislow, 54, has been mostly unemployed for the past three years after losing a job as an advertising executive in New York City. Now he is substitute teaching to make ends meet.

    “It is frustrating to hear that the unemployment rate is low, the economy is great,” he said. “I think there are people in this economy who are basically fighting every day and holding on to pieces of flotsam in the shark-filled waters or, they have no idea what it’s like.”

    With the government closed, financial markets are paying closer attention to private-sector data, but that is also mixed. On Thursday, the outplacement firm Challenger, Gray & Christmas unnerved investors with a report that announced job cuts surged 175% in October from a year ago.

    Yet on Wednesday, payroll processor ADP said that net hiring picked up in October as businesses added 42,000 jobs, after two months of declines. Still, the gain was modest. ADP’s figures are based on anonymous data from the 26 million workers at its client companies.

    Separately, Revelio Labs, a workplace analytics company, estimated Thursday that the economy shed 9,000 jobs in October. The Federal Reserve Bank of Chicago estimates that the unemployment rate ticked up to 4.4% last month.

    Even when the government was releasing data, economists and officials at the Federal Reserve weren’t sure how healthy the job market was or where it was headed next. A sharp drop in immigration and stepped-up deportations have helped keep the unemployment rate low simply by reducing the supply of workers. The economy doesn’t need to create as many jobs to keep the unemployment rate from rising.

    Jerome Powell, chair of the Federal Reserve, has called in a “curious balance” because both the supply of and demand for workers has fallen.

    Economists point to many reasons for the hiring slowdown, but most share a common thread: Greater uncertainty from tariffs, the potential impact of artificial intelligence, and now the government shutdown. While investment in data centers to power AI is booming, elevated interest rates have kept many other parts of the economy weak, such as manufacturing and housing.

    “The concentration of economic gains (in AI) has left the economy looking better on paper than it feels to most Americans,” Swonk said.

    Younger Americans have borne the brunt of the hiring slowdown, but many older workers have also struggled.

    Suzanne Elder, 65, is an operations executive with extensive experience in health care, and two years ago the Chicago resident also found work quickly — three months after she left a job, she had three offers. Now she’s been unemployed since April.

    She is worried that her age is a challenge, but isn’t letting it hold her back. “I got a job at 63, so I don’t see a reason to not get a job at 65,” she said.

    Like many job-hunters, she has been stunned by the impersonal responses from recruiters, often driven by hiring software. She received one email from a company that thanked her for speaking with them, though she never had an interview. Another company that never responded to her resume asked her to fill out a survey about their interaction.

    Weak hiring has meant unemployment spells are getting longer, according to government data. More than one-quarter of those out of work have been unemployed for more than six months or longer, a figure that rose sharply in July and August and is up from 21% a year ago.

    Swonk said that such increases are unusual outside recessions.

    A rising number of the unemployed have also given up on their job searches, according to research by the Federal Reserve Bank of Minneapolis. That also holds down the unemployment rate because people who stop looking aren’t counted as unemployed.

    But Kaprive is still sticking with it — she’s taken classes about Amazon’s web services platform to boost her technology skills.

    “We can’t be narrow-minded in what we’re willing to take,” she said.

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  • National Retail Federation predicts first $1 trillion holiday shopping season

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    NEW YORK — American shoppers are expected to spend more during this holiday shopping season than last year despite economic uncertainty and rising prices.

    The 2025 forecast from the National Retail Federation on Thursday estimates that shoppers will collectively spend between $1.01 trillion and $1.02 trillion in November and December, an increase of 3.7% to 4.2% compared with last year.

    Retailers rung up $976 billion in holiday sales last year, the group said.

    “We’re seeing really positive behavior and engagement from consumers, ” NRF President and CEO Matthew Shay told reporters on a call Thursday. “In fairness, that’s been somewhat of a surprise.”

    But Shay said more Americans are growing selective and they’re focused on discounts. And while spending is expected to be up again, the growth of that spending may be in decline.

    That is still greater than the average increase of 3.6% between 2010 to 2019. Americans ramped up spending after that during the coronavirus pandemic. Holiday season sales rose 8.9% in 2020 and soared 12.5% in 2021, according to the NRF.

    The group’s holiday forecast is based on economic modeling using various key economic indicators including consumer spending, disposable personal income, employment, wages, inflation and previous monthly retail sales releases. NRF’s calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail.

    Holiday spending accounts for 19% of annual sales for the retail industry, though for some retailers the number is a lot higher, according to the NRF. And consumer spending in the U.S. is monitored closely because it drives about 70% of the nation’s gross domestic product.

    The forecast this year, however, arrives during the longest government shutdown in U.S. history. There has been no government data released on the jobs market or retail sales since the shutdown began 37 days ago.

    “Forecasting is increasingly challenging in this environment,” Shay acknowledged.

    The NRF forecast is in line with other estimates, however, which point to slowing growth.

    Mastercard SpendingPulse, which tracks spending across all payment methods including cash, predicts that holiday sales will be up 3.6% from Nov. 1 through Dec. 24. That compares with a 4.1% increase last year.

    Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31, compared with last year’s 4.2%.

    Adobe expects U.S. online sales to hit $253.4 billion this holiday season, representing 5.3% growth. That’s smaller than last year’s 8.7% growth.

    Consumer spending in the U.S. has remained resilient even as consumer confidence has eroded.

    Mark Matthews, NRF’s chief economist and executive director of research, said consumer behavior is changing with a sharper focus on finding deals. And the frequency of family nights out at a restaurant is on the decline, NRF executives said.

    The timing of the government shutdown is “absolutely problematic,” Matthews said, noting that it’s led to a loss in private sector income, which erodes consumer demand.

    Spending should recover once the shutdown ends, Matthews said, yet there are broader issues of concern that will not be solved when the government shutdown ends.

    The gap between wealthy and lower-income households is widening, according to analysts.

    Based on spending from its credit card and bank customers, Bank of America found that spending growth among lower income households rose 0.6% in September compared with the same period last year. Among higher income brackets, spending rose at more than four times that speed, or 2.6%, in September. And wages are growing faster for higher income households.

    That is making it more difficult for lower income households to keep up when tariffs and other economic factors are pushing prices higher.

    In a separate report this week, Bank of America estimated that U.S. consumers are bearing 50% to 70% of the U.S. tariff costs, and it expects that load to grow.

    “We think there is overwhelming evidence that tariffs have pushed inflation higher for consumers,’’ Bank of America economists Stephen Juneau and Aditya Bhave wrote.

    At the same time, U.S. companies have announced tens of thousands of job cuts. Some companies have cited rising operational costs from new tariffs under the Trump administration, as well as shifting consumer spending, corporate restructuring, or increased spending on artificial intelligence.

    That has led retailers to pull back on the hiring of seasonal workers.

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  • Delayed inflation report expected to show US prices ticked up last month

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    WASHINGTON — Friday’s inflation report is likely to show that consumer prices worsened in September for the second straight month as President Donald Trump’s tariffs have lifted the cost of some groceries and other goods.

    The report on the consumer price index is being issued more than a week late because of the government shutdown, now in its fourth week. The Trump administration recalled some Labor Department employees to produce the figures because they are used to set the annual cost-of-living adjustment for roughly 70 million Social Security recipients.

    Friday’s inflation report will be the first comprehensive economic data to be released in more than three weeks and will attract intense interest from Wall Street and officials at the Federal Reserve. Fed officials are cutting their short-term interest rate to buoy the economy and hiring, but they are taking some risk doing so because inflation is still above their 2% target.

    The issues of affordability and the cost of necessities are gaining in political importance. Concerns over the costs of rent and groceries have played a key role in the mayoral race in New York City. And Trump, who has acknowledged that the spike in grocery prices under President Joe Biden helped him win the 2024 election, has been considering importing Argentine beef to reduce record-high U.S. beef prices, angering U.S. cattle ranchers.

    The cost of ground beef has jumped to $6.32 a pound, a record, in part because of tariffs on imports from countries such as Brazil, which faces a 50% duty. Years of drought that have reduced cattle herds have also raised prices.

    Friday’s report is forecast to show that inflation rose 3.1% in September from a year earlier, according to a survey of economists by data provider FactSet. That would be up from 2.9% in August and the highest in 18 months. On a monthly basis, inflation is projected to be 0.4% in September, the same as in August.

    Excluding the volatile food and energy categories, core inflation in September was likely 3.1% for the third straight month. On a monthly basis, core prices likely rose 0.3%, economists project, also for the third straight month.

    Such figures are unlikely to deter the Fed from cutting its key rate by another quarter-point when it meets next week, to about 3.9%. It would be the second cut this year and is driven by Fed Chair Jerome Powell’s concerns that hiring is weakening and poses a threat to the economy.

    Even as inflation has fallen sharply from its peak of 9.1% more than three years ago, it remains a major concern for consumers. About half of all Americans say the cost of groceries is a “major” source of stress, according to an August poll by The Associated Press-NORC Center for Public Affairs Research.

    And the Conference Board, a business research group, finds that consumers are still referencing prices and inflation in responses to its monthly survey on consumer confidence.

    Still, inflation has not risen as much as many economists feared when Trump first announced a sweeping set of tariffs. Many importers built up inventories of goods before the duties took effect, while Trump reduced many import taxes, including as part of trade deals with China, the United Kingdom, and Vietnam.

    And many economists, as well as some Fed officials, expect that the tariffs will create a one-time lift to prices that will fade by early next year. At the same time, inflation excluding the tariffs is cooling, they argue: Rental price increases, for example, are declining on average nationwide.

    Yet Trump is imposing tariffs in an ongoing fashion that could raise prices in a more sustained fashion.

    For example, the Trump administration is investigating whether to slap 100% tariffs on imports from Nicaragua over alleged human rights violations. The prospect of such steep duties is a major headache for Dan Rattigan, the co-founder of premium chocolate maker French Broad, based in Asheville, N.C.

    “We’ve been shouldering some significant additional costs,” Rattigan said. The United States barely produces any cocoa, so his company imports it from Nicaragua, the Dominican Republic, and Uganda. The imports from Nicaragua were duty-free because the country had a trade agreement with the United States, but now faces an 18% import tax.

    Cocoa prices have more than doubled over the past two years because of poor weather and blights in West Africa, which produces more than 70% of the world’s cocoa. The tariffs are an additional hit on top of that. Rattigan is also paying more for almonds, hazelnuts, and chocolate-making equipment from Italy, which has also been hit with tariffs.

    French Broad raised its prices slightly earlier this year and doesn’t have any plans to do so again. But after the winter holidays, “all bets are off … in what is a very unpredictable business climate,” Rattigan said.

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  • Trump says the US has secured $17 trillion in new investments. The real number is likely much less

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    WASHINGTON (AP) — The economic boom promised by President Donald Trump centers on a single number: $17 trillion.

    That’s the sum of new investments that Trump claims to have generated with his tariffs, income tax cuts and aggressive salesmanship of CEOs, financiers, tech titans, prime ministers, presidents and other rulers. The $17 trillion is supposed to fund new factories, new technologies, more jobs, higher incomes and faster economic growth.

    “Under eight months of Trump, we’ve already secured commitments of $17 trillion coming in,” the president said in a speech last month. “There’s never been any country that’s done anything like that.”

    But based on statements from various companies, foreign countries and the White House’s own website, that figure appears to be exaggerated, highly speculative and far higher than the actual sum. The White House website lists total investments at $8.8 trillion, though that figure appears to be padded with some investment commitments made during Joe Biden’s presidency.

    The White House didn’t lay out the math after multiple requests as to how Trump calculated $17 trillion in investment commitments. But the issue goes beyond Trump’s hyperbolic talk to his belief that the brute force of tariffs and shaming of companies can deliver economic results, a strategy that could go sideways for him politically if the tough talk fails to translate into more jobs and higher incomes.

    Just 37% of U.S. adults approve of Trump’s handling of the economy, according to a September poll by The Associated Press-NORC Center for Public Affairs. That’s down from a peak of 56% in early 2020 during Trump’s first term — a memory he relied upon when courting voters in last year’s election.

    Adam Posen, president of the Peterson Institute of International Economics, said the public commitments announced by Trump do represent a “meaningful increase” — but one that amounts to hundreds of billions of dollars, not trillions. Even then, that comes with long-term costs as countries might be less inclined to invest with the U.S. after being threatened to do so.

    “It is a national security mistake because you’re turning allies into colonies of a sort — you’re forcibly extracting from them things that they don’t see as entirely in their interest,” Posen said. “Twisting the arms of governments to then twist the arms of their own businesses is not going to get you the payoff you want.”

    Trump banking on foreign countries making good on promises

    The Trump administration is betting that tariffs are an effective tool to prod other countries and international companies to invest in the United States, a big stick that other administrations failed to wield. Trump’s pitch to voters is that he will play a role in directly managing the investment commitments made by foreign countries — and that the allocation of that money starting next year will revive what has been a flagging job market.

    “The difference between hypothetical investments and ground being broken on new factories and facilities is good leadership and sound policy,” said White House spokesman Kush Desai.

    The White House said that Japan will invest $1 trillion, largely at Trump’s direction. The European Union will commit $600 billion. The United Arab Emirates made commitments of $1.4 trillion over 10 years. Qatar pledged $1.2 trillion. Saudi Arabia intends to pony up $600 billion, India $500 billion and South Korea $450 billion, among others.

    The challenge is the precise terms of those investments have yet to be fully codified and released to the public, and some numbers are under dispute, potentially fuzzy math or, in the case of Qatar, more than five times the annual gross domestic product of the entire country. The White House maintains that Qatar is good for the money because it produces oil.

    South Korea already has misgivings about its investment commitment, which is $100 billion lower than what the White House claims, after immigration agents raided a Hyundai plant under construction in Georgia and arrested Korean citizens. There are also concerns that an investment that large without a better way to exchange currencies with the U.S. could hurt South Korea’s economy.

    “From what I’ve seen, these commitments are worth about as much as the paper they’re not written down on,” said Jared Bernstein, who was the chairman of the Council of Economic Advisers in the Biden White House.

    As for the $600 billion committed by European companies, that’s based on those businesses having “expressed interest” and having stated “intentions” to do so through 2029 rather than an overt concession, according to European Union documents.

    Still too soon to see any investment impact in overall economy

    So far, there has yet to be a notable boost in business investment as a percentage of U.S. gross domestic product. As a share of the overall economy, business investment during the first six months of Trump’s presidency has been consistently bouncing around 14%, just as it was before the pandemic.

    But economists also note that Trump is double-counting and relying on investments that were initially announced during the Biden administration or investments that were already likely to occur because of the artificial intelligence build out.

    For example, the White House lists a $16 billion investment by computer chipmaker Global Foundries. But of that sum, more than $13 billion was announced during the Biden administration and supported by $1.6 billion in grants by the 2022 CHIPS and Science Act, as well as other state and federal incentives.

    Similarly, the White House is banking on $200 billion being invested by the chipmaker Micron, but at least $120 billion of that was announced during the Biden era.

    ‘The tariffs played a big role’

    For their part, White House officials largely credit Trump’s tariffs — like those imposed on Oct. 1 on kitchen cabinets, large trucks and pharmaceutical drugs — for forcing companies to make investments in the U.S., saying that the risk of additional import taxes if countries and companies fail to deliver on their promises will ensure that the promised cash comes into the economy.

    On Tuesday, Pfizer CEO Albert Bourla endorsed this approach after his pharmaceutical drug company received a three-year grace period on tariffs and announced $70 billion in investments in the U.S.

    “The president was absolutely right,” Bourla said. “Tariffs is the most powerful tool to motivate behaviors.”

    “The tariffs played a big role,” Trump added.

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  • With the BLS Shuttered, You Might Get Jobs Data From Private Companies

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    Employers have grappled with high levels of uncertainty for the last six months, as concerns about the effects of tariffs, mass deportations, and stalled job creation stoked confusion and doubt about the economy. Now, with the government shutdown closing the doors at the federal agency that supplies most employment and labor data, private businesses are increasingly seeking to fill that void by releasing statistical insights of their own.

    The Department of Labor’s data gathering Bureau of Labor Statistics (BLS) had been scheduled to release its monthly job report for September on October 3. It was prevented from doing so by the ongoing government shutdown, which began just two days earlier. That cancellation may have come as something of a relief to President Donald Trump and governing Republicans, since BLS publications have reflected increasingly anemic hiring by businesses since May. Those weak figures suggest companies have largely limited recruitment to only replacing departing employees. That in turn appears to reflect executives’ worries that economic growth may be slowing — and their wider doubts about Trump’s management of the economy.

    But contrasting indicators have only served to increase business leaders’ confusion about where exactly the economy is headed.

    Official data earlier this year that showed the GDP contracted by 0.6 percent in the first quarter of 2025 was followed by more recent statistics reflecting the econmy came booming back with 3.8 percent growth in Q3. Other positive indicators since have led some observers to forecast continuing expansion in the third quarter, despite continued weak job growth and rising inflation suggesting otherwise.

    Now, with federal agencies no longer publishing reports under the government shutdown, most economic analysis is mostly speculation — although BLS has reportedly called in a small group of people to prepare the next consumer price data release. In the meantime, several private business are stepping up to offer any data-driven insights they can glean about the economy.

    For example, this week private equity firm Carlyle published data suggesting the BLS report for September would have again contained more disappointing job numbers if it had been released on October 3 as planned.

    Using proprietary information from 277 of its portfolio companies employing a total of 730,000 people, Carlyle estimated just 17,000 new jobs were likely created by U.S. businesses last month. That figure is even less than the 22,000 new hires BLS counted in August — dragging the monthly average since May down to just 26,750 new positions.

    But the modest numbers Carlyle estimated for September were far better than those from payroll services company ADP, which has long issued a private sector report around the time the BLS releases its own statistics. It said U.S. employers eliminated a net 32,000 jobs last month, basing that estimate on data it collected from the 26 million employees of its customer companies.

    Somewhere in between those two analyses  was last week’s report from executive outplacement and coaching specialist Challenger, Grey, and Christmas. It said businesses laid off a little over 54,000 people in September, without calculating a net gain or loss.

    While its figures on headcount reductions last month were lower than the 85,000 in August, Challenger, Grey, and Christmas noted the total 946,426 job cuts in 2025 so far were the highest since 2020. At the same time, the firm said U.S. employers were hiring at well under half the rate this year than they did in 2024 — generally reinforcing the picture of flattening employment creation.

    Those weren’t the only ways private companies trying to generate data capable of making sense of the economy in the absence of official reports during the government shutdown.

    According to an article this week in the Washington Post, that private sector search for clues about economic activity is leading observers to scrutinize “paychecks, credit card expenditures, restaurant reservations, Broadway show bookings, and even Statue of Liberty visitor numbers.” They then dive into that data to analyze how people are working and spending, and how fast inflation is pushing up the prices they’re paying.

    Carlyle’s findings for September even included the estimate that the economy grew at a 2.7 percent annualized pace in September. And this week, Moody’s Analytics released a report analyzing data from U.S. states showing 22 of them were already in recession, or on the brink of it.

    “We’re suddenly opening up new spreadsheets, looking at data we don’t usually turn to,” Apollo Global Management chief economist Torsten Slok told the Post. “Some of these indicators are really on the fringe, so we’re having to do different translations: What does this data mean? What might it tell us about the economy?”

    Is all that frantic digging really necessary, especially with history showing government shutdowns are typically short — the longest having lasted only 35 days?  Perhaps, given the concerns of some observers about trusting data from BLS once it starts issuing reports again.

    On August 1, Trump fired then-BLS director Erika McEntarfer after the agency issued downward revisions that dramatically reduced jobs creation numbers from previous months. The result was enduring uncertainty of business leaders and economists about how the economy was faring immediately got worse. In response, Trump took to social media to claim the lower numbers were “phony,” and called them intentionally “RIGGED in order to make the Republicans, and ME, look bad.”

    He then nominated an activist conservative economist to take over the BLS, despite his pick’s controversial track record that included calling for the agency to stop issuing reports on job creation and other important economic indicators.

    Though that nominee later withdrew from consideration, economists’ concerns generated by McEntarfer’s firing persist. Those are based on fears of the BLS and other federal departments potentially being forced to issue only data that reflects positively on Trump’s economic stewardship.

    That worry about the future reliability of official statistics is likely a big reason why private companies have gotten active in finding and analyzing economic data of their own — and may continue doing so even after the government shutdown ends.

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    Bruce Crumley

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  • Trump says US has secured $17T in new investments. The number is likely much less.

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    WASHINGTON — WASHINGTON (AP) — The economic boom promised by President Donald Trump centers on a single number: $17 trillion.

    That’s the sum of new investments that Trump claims to have generated with his tariffs, income tax cuts and aggressive salesmanship of CEOs, financiers, tech titans, prime ministers, presidents and other rulers. The $17 trillion is supposed to fund new factories, new technologies, more jobs, higher incomes and faster economic growth.

    “Under eight months of Trump, we’ve already secured commitments of $17 trillion coming in,” the president said in a speech last month. “There’s never been any country that’s done anything like that.”

    But based on statements from various companies, foreign countries and the White House’s own website, that figure appears to be exaggerated, highly speculative and far higher than the actual sum. The White House website lists total investments at $8.8 trillion, though that figure appears to be padded with some investment commitments made during Joe Biden’s presidency.

    The White House didn’t lay out the math after multiple requests as to how Trump calculated $17 trillion in investment commitments. But the issue goes beyond Trump’s hyperbolic talk to his belief that the brute force of tariffs and shaming of companies can deliver economic results, a strategy that could go sideways for him politically if the tough talk fails to translate into more jobs and higher incomes.

    Just 37% of U.S. adults approve of Trump’s handling of the economy, according to a September poll by The Associated Press-NORC Center for Public Affairs. That’s down from a peak of 56% in early 2020 during Trump’s first term — a memory he relied upon when courting voters in last year’s election.

    Adam Posen, president of the Peterson Institute of International Economics, said the public commitments announced by Trump do represent a “meaningful increase” — but one that amounts to hundreds of billions of dollars, not trillions. Even then, that comes with long-term costs as countries might be less inclined to invest with the U.S. after being threatened to do so.

    “It is a national security mistake because you’re turning allies into colonies of a sort — you’re forcibly extracting from them things that they don’t see as entirely in their interest,” Posen said. “Twisting the arms of governments to then twist the arms of their own businesses is not going to get you the payoff you want.”

    The Trump administration is betting that tariffs are an effective tool to prod other countries and international companies to invest in the United States, a big stick that other administrations failed to wield. Trump’s pitch to voters is that he will play a role in directly managing the investment commitments made by foreign countries — and that the allocation of that money starting next year will revive what has been a flagging job market.

    “The difference between hypothetical investments and ground being broken on new factories and facilities is good leadership and sound policy,” said White House spokesman Kush Desai.

    The White House said that Japan will invest $1 trillion, largely at Trump’s direction. The European Union will commit $600 billion. The United Arab Emirates made commitments of $1.4 trillion over 10 years. Qatar pledged $1.2 trillion. Saudi Arabia intends to pony up $600 billion, India $500 billion and South Korea $450 billion, among others.

    The challenge is the precise terms of those investments have yet to be fully codified and released to the public, and some numbers are under dispute, potentially fuzzy math or, in the case of Qatar, more than five times the annual gross domestic product of the entire country. The White House maintains that Qatar is good for the money because it produces oil.

    South Korea already has misgivings about its investment commitment, which is $100 billion lower than what the White House claims, after immigration agents raided a Hyundai plant under construction in Georgia and arrested Korean citizens. There are also concerns that an investment that large without a better way to exchange currencies with the U.S. could hurt South Korea’s economy.

    “From what I’ve seen, these commitments are worth about as much as the paper they’re not written down on,” said Jared Bernstein, who was the chairman of the Council of Economic Advisers in the Biden White House.

    As for the $600 billion committed by European companies, that’s based on those businesses having “expressed interest” and having stated “intentions” to do so through 2029 rather than an overt concession, according to European Union documents.

    So far, there has yet to be a notable boost in business investment as a percentage of U.S. gross domestic product. As a share of the overall economy, business investment during the first six months of Trump’s presidency has been consistently bouncing around 14%, just as it was before the pandemic.

    But economists also note that Trump is double-counting and relying on investments that were initially announced during the Biden administration or investments that were already likely to occur because of the artificial intelligence build out.

    For example, the White House lists a $16 billion investment by computer chipmaker Global Foundries. But of that sum, more than $13 billion was announced during the Biden administration and supported by $1.6 billion in grants by the 2022 CHIPS and Science Act, as well as other state and federal incentives.

    Similarly, the White House is banking on $200 billion being invested by the chipmaker Micron, but at least $120 billion of that was announced during the Biden era.

    For their part, White House officials largely credit Trump’s tariffs — like those imposed on Oct. 1 on kitchen cabinets, large trucks and pharmaceutical drugs — for forcing companies to make investments in the U.S., saying that the risk of additional import taxes if countries and companies fail to deliver on their promises will ensure that the promised cash comes into the economy.

    On Tuesday, Pfizer CEO Albert Bourla endorsed this approach after his pharmaceutical drug company received a three-year grace period on tariffs and announced $70 billion in investments in the U.S.

    “The president was absolutely right,” Bourla said. “Tariffs is the most powerful tool to motivate behaviors.”

    “The tariffs played a big role,” Trump added.

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  • Lack of jobs data due to government shutdown muddies the outlook for hiring and the economy

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    WASHINGTON — WASHINGTON (AP) — From Wall Street trading floors to the Federal Reserve to economists sipping coffee in their home offices, the first Friday morning of the month typically brings a quiet hush around 8:30 a.m. eastern as everyone awaits the Labor Department’s crucial monthly jobs report.

    But with the government shut down, no information was released Friday about hiring in September.

    It’s the first time since a government shutdown in 2013 that the jobs report has been delayed. During the 2018-2019 partial government closure, the Labor Department was one of several agencies that remained open because Congress had agreed to fund them. September’s jobs figures will be released eventually, once the shutdown ends.

    The interruption in the data has occurred at a particularly uncertain time, when policymakers at the Federal Reserve and Wall Street investors would need more data on the economy, rather than less. Hiring has ground nearly to a halt, threatening to drag down the broader economy. Yet at the same time, consumers — particularly higher-income earners — are still spending and some businesses are ramping up investments in data centers developing artificial intelligence models. Whether that is enough to revive hiring remains to be seen.

    For now, economists are turning to alternative measures of the job market provided by nonprofits and private-sector companies. Those measures mostly show a job market with little hiring, but not many layoffs, either. Those who have jobs appear to be mostly secure, while those looking for work are having a tougher time.

    Payroll processor ADP, for example, said Wednesday that its estimate showed the economy had lost a surprising 32,000 private-sector jobs last month. Companies in the construction, manufacturing, and financial services industries all cut jobs, ADP found. Restaurants and hotels, and professional services such as accounting and engineering, also shed workers.

    Businesses in health care, private education, and information technology were the only sectors to add workers, ADP said.

    “We’ve seen a significant decline in hiring momentum throughout the year,” said Nela Richardson, ADP’s chief economist. “This is consistent with a low hire — even a no-hire — and low fire economy.”

    The shutdown has also meant the government isn’t releasing the weekly count of how many Americans have filed for unemployment benefits, a proxy for layoffs, which is published each Thursday.

    But Goldman Sachs used data provided by most states to produce their own estimates of unemployment claims. In a report late Thursday, they calculated that weekly claims ticked up to 224,000, up from 218,000 the previous week. Those are historically low figures, which suggest companies are still holding onto most of their workers.

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  • Asian shares trade mostly higher after Wall Street snaps its 3-day losing streak

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    Shares were mostly higher Monday in Asia after Wall Street broke its three-day losing streak, trimming its losses for last week.

    China factory data are due out on Tuesday and a quarterly business sentiment survey by the Bank of Japan comes on Wednesday.

    The next big event for Wall Street could be a looming shutdown of the U.S. government, with a deadline set for this week. But such political impasses have had limited impact on the market before.

    U.S. jobs data also will be in the spotlight.

    U.S. futures edged higher early Monday and oil prices fell.

    Tokyo’s Nikkei was the regional outlier, giving up 1% to 44,892.52.

    Chinese markets advanced, with the Hang Seng in Hong Kong adding 1.5% to 26,518.03, while the Shanghai Composite index gained 0.1% to 3,832.65.

    Australia’s S&P/ASX 200 rose 0.7% to 8,545.70, while the Kospi in South Korea surged 1.3% to 3,430.57.

    On Friday, U.S. stocks trimmed their losses for the week after a report showed that inflation is behaving roughly as economists expected, even if it’s still high.

    The S&P 500 rose 0.6% to 6,643.70. The Dow Jones Industrial Average gained 0.7% to 46,247.29, while the Nasdaq composite added 0.4% to 22,484.07. All three indexes pulled closer to the all-time highs they set at the start of the week.

    Stocks got some help from the report showing inflation in the United States accelerated to 2.7% last month from 2.6% in July, according to the measure of prices that the Federal Reserve likes to use. While that’s above the Fed’s 2% target, it was precisely what economists had forecast.

    That offered some hope that the Fed could continue cutting interest rates in order to give the economy a boost. Without such cuts, growing criticism that stock prices have become too expensive by rising too quickly would become even more powerful.

    The Fed just delivered its first rate cut of the year last week but is not promising more because they could worsen inflation.

    Another report said sentiment among U.S. consumers was weaker than economists expected. The survey from the University of Michigan said consumers are frustrated with high prices, but their expectations for inflation over the coming 12 months also ticked down to 4.7% from 4.8%.

    One factor threatening to push inflation higher, adding to consumer woes, is President Donald Trump’s tariffs, and he announced more late Thursday. They include taxes on imports of some pharmaceutical drugs, kitchen cabinets and bathroom vanities, upholstered furniture and heavy trucks starting on Oct. 1.

    Details were sparse about the coming tariffs, as is often the case with Trump’s pronouncements on his social media network. That left analysts unsure of their ultimate effects, and the announcement created ripples in the U.S. stock market instead of huge waves.

    Paccar, the company based in Bellevue, Washington, that’s behind the market-dominant Peterbilt and Kenworth truck brands, revved 5.2% higher, for example.

    Big U.S. pharmaceutical companies nudged higher. Eli Lilly rose 1.4%, and Pfizer added 0.7%.

    In other trading early Monday, U.S. benchmark crude oil lost 49 cents to $65.23 per barrel. Brent crude, the international standard, declined 42 cents to $68.80 per barrel.

    Reports that the OPEC plus oil producing nations might raise their production limits next month have added to worries over oversupply, analysts said.

    The U.S. dollar slipped to 148.93 Japanese yen from 149.51 yen. The euro rose to $1.1727 from $1.1703.

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  • Fed’s favored inflation gauge accelerates slightly in August

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    WASHINGTON — The Federal Reserve’s favored inflation gauge accelerated slightly in August from a year earlier.

    The Commerce Department reported Friday that its personal consumption expenditures (PCE) price index was up 2.7% in August from a year earlier, a tick higher from a 2.6% year-over-year increase in July and most since February.

    Excluding volatile food and energy prices, so-called core PCE inflation showed a 2.9% increase in prices from August 2024, same as in July. The increases were what forecasters had expected.

    Inflation has come down since rising prices prompted the Fed to raise its benchmark interest rate 11 times in 2022 and 2023. But annual price gains remain stubbornly above the central bank’s 2% target.

    Last week, the Fed went ahead and reduced the rate for the first time this year, lowering borrowing costs to help a deteriorating U.S. job market. But it’s been cautious about cutting, waiting to see what impact President Donald Trump’s sweeping taxes on imports have on inflation and the broader economy.

    For months, Trump has relentlessly pushed the Fed to lower rates more aggressively, calling Fed Chair Jerome Powell “Too Late” and a “moron” and arguing that there is “no inflation.”

    Last month, Trump sought to fire Lisa Cook, a member of the Fed’s governing board, in an effort to gain greater control over the central bank. She has challenged her dismissal in court, and the Supreme Court will decide whether she can stay on the job while the case goes through the judicial system.

    The Fed tends to favor the PCE inflation gauge that the government issued Friday over the better-known consumer price index. The PCE index tries to account for changes in how people shop when inflation jumps. It can capture, for example, when consumers switch from pricier national brands to cheaper store brands.

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  • UK inflation remains nearly double target ahead of expected interest rate hold

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    LONDON — Inflation in the U.K. held steady at 3.8% in the year to August, official figures showed Wednesday, a day before the Bank of England is widely expected to keep interest rates on hold.

    The Office for National Statistics found food and drink prices rose for the fifth month in a row, but airfares fell sharply after a big spike in July.

    Though inflation remains nearly double the Bank of England’s target rate of 2%, most economists had anticipated a modest increase in August.

    Stubbornly high inflation has been one of the reasons why the Labour government’s poll ratings have fallen sharply since it came to power in July 2024.

    Treasury chief Rachel Reeves will be hoping inflation starts to drop down towards target, as many forecasters predict, in the year to come as it will relieve some of the cost-of-living pressures that are hurting households and undermining the government’s support.

    “I know families are finding it tough and that for many the economy feels stuck,” she said after the figures were released. “That’s why I’m determined to bring costs down and support people who are facing higher bills.”

    Reeves’ economic plans will be in the spotlight over the coming weeks ahead of her annual budget on Nov. 26, where she is widely expected to increase taxes again to bolster revenues and simultaneously introduce policies to ease the cost-of-living pressures.

    Many critics blame Reeves personally for the increase inflation this year, saying her decision to increase taxes on businesses to plug a budget hole prompted firms to up prices.

    The inflation figures have cemented market expectations that the Bank of England will keep interest rates unchanged on Thursday.

    Since it started cutting borrowing rates in August 2024 after the unwinding of the previous spike in inflation in the wake of Russia’s invasion of Ukraine, the bank has done so in a gradual manner every three months. When it cut its main rate to 4% in August, it was largely expected there would be no further reduction at the September meeting.

    If the bank were to continue to cut interest rates in the manner it has been doing so, the next meeting in November would see a further reduction. However, economists remain split as to whether another cut is forthcoming since inflation has proven to be stickier than anticipated earlier this year, partly because of relatively high wage increases.

    “Several months of disappointing data has highlighted the U.K.’s unwanted position as an international outlier for ‘sticky’ inflation, with the highest headline inflation of any G-7 economy,” said James Smith, research director at the Resolution Foundation think tank.

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  • Wall Street edges back from its record heights

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    NEW YORK — U.S. stocks edged back from their record heights on Tuesday as the countdown ticked toward what Wall Street expects will be the first cut of the year to interest rates by the Federal Reserve.

    The S&P 500 fell 0.1% from its latest all-time high. The Dow Jones Industrial Average dipped 125 points, or 0.3%, while the Nasdaq composite slipped 0.1% from its own record set the day before.

    Stocks have run to records on expectations that the Fed will announce the first of a series of cuts to rates on Wednesday in hopes of giving the economy a boost. The job market has slowed so much that traders believe Fed officials now see it as the bigger danger for the economy than the threat of higher inflation because of President Donald Trump’s tariffs.

    The Fed has been holding off on cuts to rates because inflation has remained above its 2% target, and easier interest rates could give it more fuel.

    A report on Tuesday said shoppers increased their spending at U.S. retailers by more last month than economists expected. A chunk of that could be due to shoppers having to pay higher prices for the same amount of stuff. But it could also indicate solid spending by U.S. households could continue to keep the economy out of a recession.

    The data did little to change traders’ expectations for a cut to interest rates on Wednesday, followed by more through the end of the year and into 2026.

    Such high expectations have sent stocks to records, but they can also create disappointment if unfulfilled. That’s why more attention will be on what Fed Chair Jerome Powell says about the possibility of upcoming cuts in his press conference following Wednesday’s decision than on the decision itself.

    Fed officials will also release their latest projections for where they see interest rates and the economy heading in upcoming years, which could provide another potential flashpoint.

    For now, global fund managers are tilting their portfolios toward stocks at the highest level in seven months, according to the latest survey by Bank of America. That’s even though a record 58% of them are also saying that stocks look too expensive at the moment.

    On Wall Street, Dave & Buster’s fell 16.7% after the entertainment chain reported a weaker profit for the latest quarter than analysts expected.

    New York Times Co. fell 1.6% after Trump filed a $15 billion defamation lawsuit against the newspaper and four of its journalists on Monday. The lawsuit points to several articles and a book written by Times journalists and published in the lead up to the 2024 election as “part of a decades-long pattern by the New York Times of intentional and malicious defamation against President Trump.”

    On the winning end of Wall Street was Steel Dynamics, which climbed 6.1% after it said it’s seeing improved earnings across its three business units. It credited strong demand for steel from the non-residential construction and auto industries, among other things.

    Chipotle Mexican Grill added 1.9% after its board said the company could buy back an additional $500 million of its stock. Such a move can send cash directly to investors and boost per-share results.

    Oracle rose 1.5% on speculation that it could be part of a deal that would keep TikTok operating in the United States.

    All told, the S&P 500 fell 8.52 points to 6,606.76. The Dow Jones Industrial Average dropped 125.55 to 45,757.90, and the Nasdaq composite sank 14.79 to 22,333.96.

    In stock markets abroad, indexes fell in Europe following a mixed showing in Asia.

    Japan’s Nikkei 225 added 0.3% to finish at another record. The rally comes despite political uncertainty after Japanese Prime Minister Shigeru Ishiba said he is stepping down. An election within the ruling Liberal Democratic Party to pick a new leader is expected Oct. 4.

    In the bond market, the yield on the 10-year Treasury eased to 4.03% from 4.05% late Monday.

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    AP Business Writers Yuri Kageyama and Matt Ott contributed.

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  • Unemployment, inflation and GDP growth will be worse this year than projected, budget office says

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    WASHINGTON — President Donald Trump’s tariff policy, immigration crackdowns and sweeping tax and spending law are expected to increase jobless rates and inflation and lower overall growth this year before they improve next year, according to a new report from the nonpartisan Congressional Budget Office.

    The CBO on Friday released new economic projections for the next three years, updating the outlook it originally released in January, before Trump’s inauguration.

    The latest figures, which compare fourth quarter changes, show the unemployment rate, inflation and overall growth are expected to be worse this year than initially projected, while the economic picture is expected to steady in subsequent years.

    The CBO outlooks attempt to set expectations for the economy in order to help choices made by congressional and executive branch policymakers. It does not forecast economic downturns or recessions, with its estimates generally reverting back to an expected average over time.

    But Friday’s outlook showed the degree to which Trump’s choices are altering the path of the U.S. economy, suggesting that growth has been hampered in the near term by choices that have yet to show the promised upside of more jobs and lower budget deficits.

    Kush Desai, a White House spokesperson, told The Associated Press, “Americans heard similar doom-and-gloom forecasts during President Trump’s first term, when the President’s economic agenda unleashed historic job, wage, and economic growth and the first decline in wealth inequality in decades.”

    “These same policies of tax cuts, tariffs, deregulation, and energy abundance are set to deliver — and prove the forecasters wrong — again in President Trump’s second term,” he said.

    Overall, the CBO expects real GDP growth to decrease from 2.5% in 2024 to 1.4% this year, a downgrade from the initial projection of 1.9%. The CBO attributes the projected decline to a slowdown in consumer spending stemming from new tariffs and a decrease in immigration, which would also impact consumer spending.

    The tariffs “raise prices for consumer goods and services, thereby eroding the purchasing power of households; they also increase costs for businesses that use imported and import-competing inputs in production,” the report says.

    However, GDP is set to grow to 2.2% in 2026, which is higher than the CBO’s January prediction of 1.8%. GDP would then level off to 1.8% in 2027 and 2028, the CBO says in its latest report.

    Additionally, unemployment is expected to hit 4.5% in 2025, higher than the 4.3% initially expected, according to the CBO. The jobless rate is expected to reach 4.2% in 2026 — slightly lower than the 4.4% originally anticipated — and even out at 4.4% in 2027 and 2028.

    And inflation is now expected to hit 3.1% for the rest of 2025, according to the CBO, up from its 2.2% projection in January. Inflation would then lower to 2.4% in 2026, higher than the initial expectation of 2.1%, before leveling off at 2% the next two years.

    The CBO on Wednesday issued a report that shows Trump’s plans for mass deportations and other hard-line immigration measures will result in roughly 320,000 people removed from the United States over the next ten years.

    Coupled with a lower fertility rate in the U.S., the reduction in immigration means that the CBO’s projection of the U.S. population will be 4.5 million people lower by 2035 than the nonpartisan office had projected in January.

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    Associated Press writer Josh Boak in New York contributed to this report.

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  • Asian shares track Wall Street rallies as a US interest rate cut next week looks more certain

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    MANILA, Philippines — Asian shares rose on Friday, tracking Wall Street’s record-setting run the previous after a mixed set of U.S. data bolstered expectations that the Federal Reserve will cut interest rates to boost the economy.

    Japan’s Nikkei 225 set another intra-day high, rising for the third day and adding 0.9% to 44,781.09. Shares in semiconductor company Tokyo Electron, Sony Group and Fast Retailing were among the movers.

    In Chinese markets, Hong Kong’s Hang Seng index rose 1.5% to 26,484.65, lifted by a report that Beijing may order state banks to help cover unpaid bills of local governments. The Shanghai Composite index inched 0.2% to 3,877.38

    In Seoul, the Kospi climbed 1.3% to 3,387.02 while Australia’s S&P/ASX 200 added 0.7% to 8,867.90. India’s BSE Sensex rose 0.3% while Taiwan’s Taiex was up 0.6%.

    “What’s moving markets now isn’t just another rally — it’s the unmistakable shift of a dovish Fed tide, the kind that doesn’t rise in isolation but swells across oceans, lifting virtually every boat in every harbour,” Stephen Inness of SPI Asset Management said in a market commentary.

    Wall Street’s record-setting run kept rolling on Thursday, and stocks climbed after a mixed set of U.S. data kept the path clear for the Federal Reserve to cut interest rates to boost the economy.

    The S&P 500 rose 0.8% and set an all-time high for the third straight day. The Dow Jones Industrial Average rallied 617 points, or 1.4%, and the Nasdaq composite gained 0.7%. Both also hit records.

    Treasury yields eased in the bond market following the economic reports, which were some of the final data releases left that could sway the Federal Reserve’s thinking before its meeting next week. The unanimous expectation on Wall Street is that it will cut its main interest rate for the first time this year.

    The hope on Wall Street has been for a slowdown, but a precisely measured one. The job market has to be weak enough to get the Fed to cut interest rates, which can give a kickstart to the economy and to prices for investments, but not so much that it causes a recession.

    The Fed has been hesitant to cut interest rates throughout 2025 because of the threat that President Donald Trump’s tariffs could make inflation worse. Lower interest rates can push inflation even higher.

    A report on inflation Thursday showed that prices are continuing to rise faster for U.S. households than the Fed’s 2% target, but no more than economists expected. Consumers paid prices for food, gasoline and other costs of living that were 2.9% higher in August than a year earlier, a slight acceleration from July’s 2.7% inflation rate.

    Traders believe the Fed will see the slowing job market as the bigger problem than inflation.

    Stocks of companies that could benefit from lower interest rates rallied on Wall Street, including owners of real estate and homebuilders.

    In other dealings on Friday, benchmark U.S. crude shed 53 cents to $61.84 per barrel. Brent crude, the international standard, slipped 51 cents to $65.86 per barrel.

    The U.S. dollar rose to 147.51 yen from 147.15 yen. The euro slid to $1.1729 from $1.1740.

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    AP Business Writer Stan Choe contributed.

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  • Japan’s economy grew at faster rate in fiscal Q1 than initially thought

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    Japan’s economy expanded at a stronger rate in the fiscal first quarter than previously estimated, despite worries about U.S. tariffs and domestic political uncertainty, according to government data

    TOKYO — Japan’s economy expanded at a stronger rate in the fiscal first quarter than previously estimated, despite worries about U.S. tariffs and domestic political uncertainty, according to government data released Monday.

    The Cabinet Office said Japan’s real gross domestic product, the sum value of a nation’s goods and services, grew at a seasonally adjusted 2.2% annualized rate in the April-June quarter from the previous quarter.

    That was better than the preliminary estimate for 1.0% growth, which came out last month, as solid consumer spending and inventories lifted growth more than previously thought.

    Quarter-on-quarter, Japan’s GDP grew 0.5%, up from the initial estimate for a 0.3% rise, which was also what analysts projected, according to RaboResearch.

    That marked the fifth straight quarter of growth. The annualized number shows what the growth, or contraction, would have been if the quarterly rate continued for a year.

    U.S. President Donald Trump’s move to raise tariffs on Japanese imports is a major worry for the export-dependent economy, especially auto exports, which now face a 15% tariff, up from 2.5%.

    Another concern is the looming political uncertainty after Prime Minister Shigeru Ishiba announced Sunday he is stepping down as head of the ruling party. A party election will follow over the next weeks.

    Private consumption rose 0.4%, according to the latest government data, better than the initial estimate for 0.2% growth, raising domestic demand growth into positive territory at 0.2% growth, instead of contracting 0.1%, as in the earlier data.

    Japan’s benchmark Nikkei rose in morning trading, despite Ishiba’s announcement on resigning, as the move was somewhat expected, and the market appeared to welcome the action as a step forward.

    But analysts say uncertainty remains because it’s still unclear what parties might be brought in to form a coalition with the ruling party.

    ___

    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

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  • Trump’s job market promises fall flat as hiring collapses and inflation ticks up

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    WASHINGTON — The U.S. job market has gone from healthy to lethargic during President Donald Trump’s first seven months back in the White House, as hiring has collapsed and inflation has started to climb once again as his tariffs take hold.

    Friday’s jobs report showed employers added a mere 22,000 jobs in August, as the unemployment rate ticked up to 4.3%. Factories and construction firms shed workers. Revisions showed the economy lost 13,000 jobs in June, the first monthly losses since December 2020, during the COVID-19 pandemic.

    The new data exposed the widening gap between the booming economy Trump promised and the more anemic reality of what he’s managed to deliver so far. The White House prides itself on operating at a breakneck speed, but it’s now asking the American people for patience, with Trump saying better job numbers might be a year away.

    “We’re going to win like you’ve never seen,” Trump said Friday. “Wait until these factories start to open up that are being built all over the country, you’re going to see things happen in this country that nobody expects.”

    The plea for patience has done little to comfort Americans, as economic issues that had been a strength for Trump for a decade have evolved into a persistent weakness. Approval of Trump’s economic leadership hit 56% in early 2020 during his first term, but that figure was 38% in July of this year, according to polling by The Associated Press-NORC Center for Public Affairs Research.

    The situation has left Trump searching for others to blame, while Democrats say the problem begins and ends with him.

    Trump maintained Friday that the economy would be adding jobs if Federal Reserve Chair Jerome Powell had slashed benchmark interest rates, even though doing so to the degree that Trump wants could ignite higher inflation. Investors expect a rate cut by the Fed at its next meeting in September, although that’s partially because of weakening job numbers.

    Senate Minority Leader Chuck Schumer, D-N.Y., said Trump’s tariffs and freewheeling policies were breaking the economy and the jobs report proved it.

    “This is a blaring red light warning to the entire country that Donald Trump is squeezing the life out of our economy,” Schumer said.

    By many measures, Trump has dug himself into a hole on the economy as its performance has yet to come anywhere close to his hype.

    — Trump in 2024 suggested that deporting immigrants in the country illegally would protect “Black jobs.” But the Black unemployment rate has climbed to 7.5%, the highest since October 2021, as the Trump administration has engaged in aggressive crackdowns on immigration.

    — At his April tariffs announcement, Trump said, “Jobs and factories will come roaring back into our country and you see it happening already.” Since April, manufacturers have cut 42,000 jobs and builders have downsized by 8,000.

    — Trump said in his inaugural address that the “liquid gold” of oil would make the nation wealthy as he pivoted the economy to fossil fuels. But the logging and mining sectors — which includes oil and natural gas — have shed 12,000 jobs since January. While gasoline prices are lower, the Energy Information Administration in August estimated that crude oil production, the source of the wealth promised by Trump, would fall next year by an average of 100,000 barrels a day.

    — At 2024 rallies, Trump promised to “end” inflation on “day one” and halve electricity prices within 12 months. Consumer prices have climbed from a 2.3% annual increase in April to 2.7% in July. Electricity costs are up 4.6% so far this year.

    The Trump White House maintains that the economy is on the cusp of breakout growth, with its new import taxes poised to raise hundreds of billions of dollars annually if they can withstand court challenges.

    At a Thursday night dinner with executives and founders from companies including Apple, Google, Microsoft, OpenAI and Meta, Trump said the facilities being built to develop artificial intelligence would deliver “jobs numbers like our country has never seen before” at some point “a year from now.”

    But Michael Strain, director of economic policy studies at the American Enterprise Institute, noted that Trump’s promise that strong job growth is ahead contradicts his unsubstantiated claims that recent jobs data was faked to embarrass him. That accusation prompted him to fire the head of the Bureau of Labor Statistics last month after the massive downward revisions in the July jobs report.

    Strain said it’s rational for the administration to say better times are coming, but doing so seems to undermine Trump’s allegations that the numbers are rigged.

    “The president clearly stated that the data were not trustworthy and that the weakness in the data was the product of anti-Trump manipulation,” Strain said. “And if that’s true, what are we being patient about?”

    The White House maintained that Friday’s jobs report was an outlier in an otherwise good economy.

    Kevin Hassett, director of the White House National Economic Council, said the Atlanta Federal Reserve is expecting annualized growth of 3% this quarter, which he said would be more consistent with monthly job gains of 100,000.

    Hassett said inflation is low, income growth is “solid” and new investments in assets such as buildings and equipment will ultimately boost hiring.

    But Daniel Hornung, who was deputy director of the National Economic Council in the Biden White House, said he didn’t see evidence of a coming rebound in the August jobs data.

    “Pretty broad based weakening,” Hornung said. “The decline over three months in goods producing sectors like construction and manufacturing is particularly notable. There were already headwinds there and tariffs are likely exacerbating challenges.”

    Stephen Moore, an economics fellow at the conservative Heritage Foundation and supporter of the president, said the labor market is “definitely softening,” even as he echoed Trump’s claims that the jobs numbers are not reliable.

    He said the economy was adjusting to the Trumpian shift of higher tariffs and immigration reductions that could lower the pool of available workers.

    “The problem going forward is a shortage or workers, not a shortage of jobs,” Moore said. “In some ways, that’s a good problem to have.”

    But political consultant and pollster Frank Luntz took the contrarian view that the jobs report won’t ultimately matter for the political fortunes of Trump and his movement because voters care more about inflation and affordability.

    “That’s what the public is watching, that’s what the public cares about,” Luntz said. “Everyone who wants a job has a job, for the most part.”

    From the perspective of elections, Trump still has roughly a year to demonstrate progress on improving affordability, Luntz said. Voters will generally lock in their opinions about the economy by Labor Day before the midterm elections next year.

    In other words, Trump still has time.

    “It’s still up for grabs,” he said. “The deciding point will come Labor Day of 2026.”

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  • What the end of Federal Reserve independence could mean

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    WASHINGTON — President Donald Trump’s attempt to fire a member of the Federal Reserve’s governing board has raised alarms among economists and legal experts who see it as the biggest threat to the central bank’s independence in decades.

    The consequences could impact most Americans’ everyday lives: Economists worry that if Trump gets what he wants — a loyal Fed that sharply cuts short-term interest rates — the result would likely be higher inflation and, over time, higher borrowing costs for things like mortgages, car loans and business loans.

    Trump on Monday sought to fireLisa Cook, the first Black woman appointed to the Fed’s seven-member governing board. It was the first time in the Fed’s 112-year history that a president has tried to fire a governor.

    Trump said he was doing so because of allegations raised by one of his appointees that she has committed mortgage fraud.

    Cook has argued in a lawsuit seeking to block her firing that the claims are a pretext for Trump’s true goal: Gaining more control over the Fed. A court may decide next week whether to temporarily block Cook’s firing while the case makes its way through the legal process.

    Cook is accused of claiming two homes as primary residences in July 2021, before she joined the board, which could have led to a lower mortgage rate than if one had been classified as a second home or an investment property. She has suggested in her lawsuit that it may have been a clerical error but hasn’t directly responded to the accusations.

    Trump and members of his administration have made no secret about their desire to exert more control over the Fed. Trump has repeatedly demanded that the central bank cut its key rate to as low as 1.3%, from its current level of 4.3%.

    Before trying to fire Cook, Trump repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting the short-term interest rate and threatened to fire him as well.

    “We’ll have a majority very shortly, so that’ll be good,” Trump said Tuesday, a reference to the fact that if he is able to replace Cook his appointees will control the Fed’s board by a 4-3 vote.

    “The particular case of Governor Cook is not as important as what this latest move shows about the escalation in the assaults on the Fed,” said Jon Faust, an economist at Johns Hopkins and former adviser to Powell. “In my view, Fed independence really now hangs by a thread.”

    Some economists do think the Fed should cut more quickly, though virtually none agree with Trump that it should do so by 3 percentage points. Powell has signaled the Fed is likely to cut by a quarter point in September.

    The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls — which it typically does when the economy falters — the Fed can make borrowing cheaper and encourage more spending, growth, and hiring. When it raises the rate to combat the higher prices that come with inflation, it can weaken the economy and cause job losses.

    Most economists have long preferred independent central banks because they can take unpopular steps that elected officials are more likely to avoid. Economic research has shown that nations with independent central banks typically have lower inflation over time.

    Elected officials like Trump, however, have much greater incentives to push for lower interest rates, which make it easier for Americans to buy homes and cars and would boost the economy in the short run.

    Douglas Elmendorf, an economist at Harvard and former director of the nonpartisan Congressional Budget Office, said that Trump’s demand for the Fed to cut its key rate by 3 percentage points would overstimulate the economy, lifting consumer demand above what the economy can produce and boosting inflation — similar to what happened during the pandemic.

    “If the Federal Reserve falls under control of the president, then we’ll end up with higher inflation in this country probably for years to come,” Elmendorf said.

    And while the Fed controls a short-term rate, financial markets determine longer-term borrowing costs for mortgages and other loans. And if investors worry that inflation will stay high, they will demand higher yields on government bonds, pushing up borrowing costs across the economy.

    In Turkey, for example, President Recep Tayyip Erdogan forced the central bank to keep interest rates low in the early 2020s, even as inflation spiked to 85%. In 2023, Erdogan allowed the central bank more independence, which has helped bring down inflation, but short-term interest rates rose to 50% to fight inflation, and are still 46%.

    Other U.S. presidents have badgered the Fed. President Lyndon Johnson harassed then-Fed Chair William McChesney Martin in the mid-1960s to keep rates low as Johnson ramped up government spending on the Vietnam War and antipoverty programs. And Richard Nixon pressured then-Chair Arthur Burns to avoid rate hikes in the run-up to the 1972 election. Both episodes are widely blamed for leading to the stubbornly high inflation of the 1960s and ’70s.

    Trump has also argued that the Fed should lower its rate to make it easier for the federal government to finance its tremendous $37 trillion debt load. Yet that threatens to distract the Fed from its congressional mandates of keeping inflation and unemployment low.

    Presidents do have some influence over the Fed through their ability to appoint members of the board, subject to Senate approval. But the Fed was created to be insulated from short-term political pressures. Fed governors are appointed to staggered, 14-year terms to ensure that no single president can appoint too many.

    Jane Manners, a law professor at Fordham University, said there is a reason that Congress decided to create independent agencies like the Fed: They preferred “decisions that are made from a kind of objective, neutral vantage point grounded in expertise rather than decisions are that are wholly subject to political pressure.”

    Yet some Trump administration officials say they want more democratic accountability at the Fed.

    In an interview with USA Today Vice President JD Vance said, “What people who are saying the president has no authority here are effectively saying is that seven economists and lawyers should be able to make an incredibly critical decision for the American people with no democratic input.”

    And Stephen Miran, a top White House economic adviser, wrote a paper last year advocating for a restructuring of the Fed, including making it much easier for a president to fire governors.

    The “overall goal of this design is delivering the economic benefits” of an independent central bank, Miran wrote, “while maintaining a level of accountability that a democratic society must demand.” Trump has nominated Miran to the Fed’s board to replace Adriana Kugler, who stepped down unexpectedly Aug. 1.

    Trump has personally insulted Powell for months, but his administration now appears much more focused on the Fed’s broader structure.

    The Fed makes its interest rate decisions through a committee that consists of the seven governors, including Powell, as well as the 12 presidents of regional Fed banks in cities such as New York, Kansas City, and Atlanta. Five of those presidents vote on rates at each meeting. The New York Fed president has a permanent vote, while four others vote on a rotating basis.

    While the reserve banks’ boards choose their presidents, the Fed board in Washington can vote to reject them. All 12 presidents will need to be reappointed and approved by the board in February, which could become more contentious if the board votes down one or more of the 12 presidents.

    “The nuclear scenario is … the reappointment of the reserve bank presidents and interfering with that, (which) would be the signal that things are truly going off the rails,” said Adam Posen, president of the Peterson Institute for International Economics.

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  • Average rate on a 30-year mortgage slips to 10-month low

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    MCLEAN, Va. — The average rate on a 30-year U.S. mortgage slipped this week to its lowest level in 10 months, but remains close to where it’s been in recent weeks.

    The long-term rate eased to 6.56% from 6.58% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.35%.

    Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, were unchanged from last week. The average rate held steady at 5.69%. A year ago, it was 5.51%, Freddie Mac said.

    Elevated mortgage rates have added to a slump in the U.S. housing market that began in early 2022, when rates began climbing from pandemic lows.

    For much of the year, the average rate on a 30-year mortgage has hovered relatively close to its 2025 high of just above 7%, set in mid-January. It’s has mostly trended lower six weeks in a row and is now at the lowest level since Oct. 24, when it averaged 6.54%.

    The recent downward trend in mortgage rates bodes well for prospective homebuyers who have been held back by stubbornly high home financing costs. But it has yet to translate into a turnaround for home sales, which have remained sluggish this year after sinking in 2024 to their lowest level in nearly 30 years.

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  • US economy grows 3.3% in second quarter, government says, in second estimate of April-June growth

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    WASHINGTON — The U.S. economy rebounded this spring from a first-quarter downturn caused by fallout from President Donald Trump’s trade wars.

    In an upgrade from its first estimate, the Commerce Department said Thursday that U.S. gross domestic product — the nation’s output of goods and services — expanded at a 3.3% annual pace from April through June after shrinking 0.5% in the first three months of 2025. The department had initially estimated second-quarter growth at 3%.

    The first-quarter GDP drop, the first retreat of the U.S. economy in three years, was mainly caused by a surge in imports — which are subtracted from GDP — as businesses scrambled to bring in foreign goods ahead of Trump’s tariffs. That trend reversed as expected in the second quarter: Imports fell at a 29.8% pace, boosting April-June growth by more than 5 percentage points.

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  • German economy shrank by 0.3% in second quarter in worse showing than initially thought

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    BERLIN (AP) — The German economy shrank by 0.3% in the second quarter compared with the previous three-month period, official data showed Friday, a significantly worse showing than was initially reported as tensions with the U.S. over tariffs simmered.

    In a preliminary report at the end of July, the Federal Statistical Office said gross domestic product contracted by 0.1% in April-June compared with the first quarter for Europe’s biggest economy. That contributed to a lackluster showing for the 20-nation eurozone.

    Full data showed output in manufacturing and the construction industry was worse than expected in June and household spending for the quarter also was revised downward, the office said Friday. The decline followed growth of 0.3% in the first quarter.

    The German economy has shrunk for the past two years. Chancellor Friedrich Merz’s administration has made revitalizing it a top priority since taking office May 6.

    It has launched a program to encourage investment and set up a 500 billion-euro ($582 billion) fund to pour money into Germany’s creaking infrastructure over the next 12 years. It is promising to cut red tape and speed up the country’s lagging digitization.

    A group of dozens of companies last month pledged to invest at least 631 billion euros ($731.7 billion) in Germany over the next three years, a figure that included some previously planned investments but was designed to send a signal of confidence in the economy.

    ING economist Carsten Brzeski said “after the surge in economic activity resulting from the U.S. front-loading of German exports in the first quarter, the economy experienced a reversal of the front-loading effect, and the first full-blown impact of U.S. tariffs (implemented in the second quarter) took effect.”

    It could “take until next year before a more substantial recovery starts to unfold,” he said.

    A European Union-U.S. trade deal was reached last month but remains a work in progress.

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  • Powell signals Fed may cut rates soon even as inflation risks remain

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    JACKSON HOLE, Wyo. (AP) — Federal Reserve Chair Jerome Powell on Friday opened the door ever so slightly to lowering a key interest rate in the coming months but gave no hint on the timing of a move and suggested the central bank will proceed cautiously as it continues to evaluate the impact of tariffs and other policies on the economy.

    In a high-profile speech closely watched at the White House and on Wall Street, Powell said that there are risks of both rising unemployment and stubbornly higher inflation. Yet he suggested that with hiring sluggish, the job market could weaken further.

    “The shifting balance of risks may warrant adjusting our policy stance,” he said, a reference to his concerns about weaker job gains and a more direct sign that the Fed is considering a rate cut than he has made in previous comments.

    Still, Powell’s remarks suggest the Fed will proceed carefully in the coming months and will make its rate decisions based on how inflation and unemployment evolve. The Fed has three more meetings this year, including next month, in late October, and in December, and it’s not clear whether the Fed will cut at all those meetings.

    AP AUDIO: Powell signals Fed may cut rates soon even as inflation risks remain

    AP correspondent Ed Donahue reports on prospects of an interest rate cut from the Federal Reserve.

    “The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said. That suggests the Fed will continue to evaluate jobs and inflation data as it decides whether to cut rates.

    The stock market jumped in response to Powell’s remarks, with the broad S&P 500 index rising 1.5% in midday trading.

    “We see Powell’s remarks as consistent with our expectation of” a quarter-point cut to the Fed’s short-term rate at its Sept. 16-17 meeting, economists at Goldman Sachs wrote in a note to clients. The Fed’s rate currently stands at 4.3%.

    Powell spoke with the Fed under unprecedented public scrutiny from the White House, as President Donald Trump has repeatedly insulted Powell and has urged him to cut rates, arguing there is “no inflation” and saying that a cut would lower the government’s interest payments on its $37 trillion in debt.

    Trump also says a cut would boost the moribund housing market. A rate cut by the Fed often leads to lower borrowing costs for mortgages, car loans, and business borrowing, but it doesn’t always.

    While Powell spoke, Trump elevated his attacks, telling reporters in Washington, D.C. that he would fire Federal Reserve Governor Lisa Cook if she did not step down over allegations from an administration official that she committed mortgage fraud.

    If Cook is removed, that would give Trump an opportunity to put a loyalist on the Fed’s governing board. The Fed has long been considered independent from day-to-day politics. The president can’t fire a Fed governor over disagreements on interest rate policy, but he can do so “for cause,” which is generally seen as malfeasance or neglect of duty.

    Later Friday, Trump told reporters, referring to Powell, “We call him too late for a reason. He should have cut them a year ago. He’s too late.”

    Powell spoke at the Fed’s annual economic symposium in Jackson Hole, Wyoming, a conference with about 100 academics, economists, and central bank officials from around the world. He was given a standing ovation before he spoke.

    Cook, who is also attending the conference, declined to comment on the president’s remarks.

    In his remarks, the Fed chair underscored that tariffs are lifting inflation and could push it higher in the coming months.

    “The effects of tariffs on consumer prices are now clearly visible. We expect those effects to accumulate over coming months, with high uncertainty about timing and amounts,” Powell said.

    Inflation has crept higher in recent months though it is down from a peak of 9.1% three years ago. Tariffs have not spurred inflation as much as some economists worried, but they are starting to lift the prices of heavily imported goods such as furniture, toys, and shoes.

    Consumer prices rose 2.7% in July from a year ago, above the Fed’s target of 2%. Excluding the volatile food and energy categories, core prices rose 3.1%.

    Powell added that higher prices from tariffs could cause a one-time shift to prices, rather than an ongoing bout of inflation. Other Fed officials have said that is the most likely outcome and as a result the central bank can cut rates to boost the job market.

    The Fed chair said it is largely up to the central bank to ensure that tariffs don’t lead to sustained inflation.

    “Come what may, we will not allow a one-time increase in the price level to become an ongoing inflation problem,” he said, suggesting deep rate cuts, as Trump has demanded, are unlikely.

    Regarding the job market, Powell noted that even as hiring has slowed sharply this year, the unemployment rate remains low. He added that with immigration falling sharply, fewer jobs are needed to keep unemployment in check.

    Yet with hiring sluggish, the risks of a sharper downturn, with rising layoffs, has risen, Powell said.

    Powell also suggested the Fed would continue to set its interest-rate policy free from political pressure.

    Fed officials “will make these decisions, based solely on their assessment of the data and its implications for the economic outlook and the balance of risks. We will never deviate from that approach.”

    Powell dedicated the second half of his speech to announcing changes to the Fed’s policy framework that was issued in August 2020. The framework, which has been blamed for delaying the Fed’s response to the pandemic inflation spike, provides guidelines on how the Fed would respond to changes in inflation and employment.

    In 2020, after a decade of low inflation and low interest rates following the financial crisis and Great Recession in 2008-2009, the Fed changed its framework to allow inflation to top its 2% target temporarily, so that inflation would average 2% over time.

    And after unemployment fell to a half-century low in 2018, without pushing up inflation, the 2020 framework said that the Fed would focus only on “shortfalls” in employment, rather than “deviations.” That meant it would cut rates if unemployment rose, but wouldn’t necessarily raise them if it fell.

    The Fed reviewed its framework this year and concluded that it was tied too closely to the pre-pandemic economy, which has since shifted. Inflation spiked to a four-decade high in 2022 and the Fed rapidly boosted interest rates afterward.

    “A key objective has been to make sure that our framework is suitable across a broad range of economic conditions,” Powell said.

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