Fresh jobs report to offer snapshot of US economy under Trump
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(WASHINGTON) — A fresh jobs report to be released on Friday will offer a snapshot of U.S. economic performance over the first full month under President Donald Trump.
Economists expect employers to have hired 170,000 workers in February. That figure would mark a slight uptick from 143,000 jobs added in January, and it would nearly match the average number of jobs added each month last year.
The unemployment rate is expected to hold steady at 4%, a historically low reading.
The data release is set to coincide with a turbulent period for U.S. stocks and trade relations in the aftermath of tariffs issued by the Trump administration earlier this week.
Despite the temporary withdrawal of some tariffs on Thursday, stocks dropped as fallout from the policy continued to roil markets.
The Dow Jones Industrial Average tumbled about 425 points, or 1%, while the S&P 500 fell 1.7%. The tech-heavy Nasdaq sank 2.6%.
The tariffs stand among a flurry of economy-related directives issued since Trump took office, including spending cuts and an assault on diversity, equity and inclusion initiatives.
The Trump administration has also terminated tens of thousands of federal employees, though such cuts are not expected to appear in the February report, in part due to the timing of surveys conducted by officials who collect the data.
Meanwhile, the economy is weathering a bout of resurgent inflation that stretches back to the final months of the Biden administration.
Consumer prices rose 3% in January compared to a year ago, registering a percentage point higher than the Federal Reserve’s target of 2%.
Egg prices, a closely watched symbol of rising costs, soared 53% in January compared to a year ago. BIrd flu has decimated the egg supply, lifting prices higher.
In February, a key gauge of consumer confidence registered its largest monthly drop since August 2021, the nonpartisan Conference Board said last month.
The share of consumers who expect a recession within the next year surged to a nine-month high, the data showed. A growing portion of consumers believe the job market will worsen, the stock market will fall and interest rates will rise, the report added.
Still, some measures of consumer sentiment improved. Consumers’ assessment of current business conditions moved higher, while an uptick in purchasing plans for a home extended a monthslong recovery.
Mortgage rates have dropped for seven consecutive weeks, FreddieMac data showed. The average rate for a 30-year fixed mortgage stands at 6.63%, its lowest level since December.
(NEW YORK) — While Elon Musk has vaulted into a powerful role overhauling government agencies and upending Washington, the world’s richest person has suffered a $106 billion drop in wealth due to steep decline in shares of his Tesla electric car company.
Tesla’s stock price has plummeted 30% from its all-time high in December, including a 21% selloff since Inauguration Day. The losses have sent Musk’s net worth tumbling from a peak of $486 billion on Dec. 17 to its current level of about $380 billion, according to Bloomberg.
The stock woes have divided current and former Tesla shareholders. Critics of Musk fault his new role and polarizing reputation, blaming recent reports showing lackluster sales in some regions on his foray into politics. They say Musk must step away from the Trump administration for the company to thrive. Supporters, on the other hand, say Musk’s role in the White House has little to do with the selloff, noting that Tesla shares remain higher than where they stood on Election Day. Instead, some say, the company is suffering growing pains as it weathers stiff competition in electric vehicles and pursues new ventures like self-driving taxis.
“I don’t have a problem if Elon wants to save a bunch of money for America. I say, ‘Where’s the good part in this for Tesla'” Ross Gerber, a prominent Tesla investor, told ABC News, referring to cost-cutting efforts undertaken by Musk’s Department of Government Efficiency. Tesla representatives did not respond to ABC News’ request for comment.
Despite disagreement over the effect of Musk’s government role, both current and former Tesla shareholders who spoke to ABC News broadly acknowledged the company’s recent business hiccups.
Tesla sold fewer cars in 2024 than it did the year prior, marking the company’s first year-over-year sales decline in more than a decade, earnings released in January showed. As rivals have challenged Tesla’s dominance over the electric vehicle market, the company has promised a future revenue stream from autonomous taxis, also known as robotaxis.
Musk announced in late January that the company would roll out its robotaxi test program in Austin, Texas, in June. But within days, China-based competitor BYD unveiled advances in self-driving technology, which the company said was set to be included in models costing as little as $9,600. Gary Black, managing partner of The Future Fund, which manages $100 million in assets, including Tesla shares, said the recent selloff of Tesla is primarily the result of investor jitters about whether the company can dominate self-driving technology the way it did electric vehicles.
“Over time, you will see Teslas and other cars self-drive. But Tesla is not going to be the only one,” Black told ABC News’ Elizabeth Schulze.
The stock also faced downward pressure this week when a Musk-led group of investors offered to buy OpenAI for $97.4 billion, making possible a scenario in which Musk would sell some of his Tesla shares to finance the deal, Black said. Black said that, in his opinion, the downturn has nothing to do with Musk’s government role.
“It’s always good to know the president of the United States — to be able to pick up your phone and say, you know, ‘I need this favor, that favor,'” Black said.
A jump in Tesla shares after Trump’s victory suggests many investors viewed the relationship that way. The stock price soared about 85% over a six-week period following Election Day.
But some investors lay the blame for the downturn squarely at Musk’s feet.
Nell Minow, Vice Chair of ValueEdge Advisors and a longtime critic of Musk, said Musk has been “absent” from the company.
“I think that he is a huge drag on the stock right now,” Minow told Schulze. “No question, he’s a problem.”
“Elon Musk is to the Tesla brand what the Green Giant is to corn,” Minow said. “He has made himself the brand and that is always very risky.” Minow, who said she donated nearly all of her Tesla shares to charity last year, also criticized the Tesla board for what she said was a failure to hold Musk to account, or update shareholders and the public about a leadership plan while Musk runs DOGE.
“We don’t know what the board is thinking. They have not spoken out in any way,” Minow said. “They have not made a filing with the SEC about what the impact of this side hustle is, and the employees and the shareholders need some kind of certainty.”
New York City Comptroller Brad Lander echoed concerns about the board’s ability to rein in Musk. Lander, who oversees $1.25 billion in Tesla stock through the city’s five pension systems, said the lack of oversight was a “long-standing problem.”
“Independent governance is designed to provide a voice for shareholders at the table,” Lander, who is running for New York City mayor and has publicly sparred with Musk, said in a statement to ABC News. “When companies are controlled by a set of directors with either family or aligned interests, they lose this.”
For his part, Musk has looked to hype up Tesla’s prospects, saying on an earnings call last month that he believes there is an opportunity for it to be “the most valuable company in the world.”
During the call, AllianceBernstein Research analyst Daniel Roska questioned Musk on how Tesla plans to meet its ambitious projections given its high valuation.
Musk emphasized Tesla’s focus on real-world AI, claiming the company is making significant strides.
“We’re working on perfecting real-world AI and making rapid progress week over week, if not month over month,” Musk said. “I go where the problem is, essentially … I focus where the challenges are the greatest.”
Some Tesla shareholders remain bullish on the company despite its short-term drop. Angel investor Larry Goldberg, known as “Tesla Larry,” posted on X that he supports Musk’s political efforts, even if they impact the company’s stock price.
“If the Trump administration (and DOGE) does not fix the deficit, my Tesla shares — and everyone’s US stocks and bonds will be worthless,” Goldberg wrote.
(WASHINGTON) — Consumer prices rose 2.9% in December compared to a year ago, ticking up from the previous month and extending a resurgent bout of inflation just days before President-elect Donald Trump takes office. The reading matched economists’ expectations.
The fresh data arrives after a jobs report last week showed stronger-than-expected hiring in December, which sent the stock market plummeting and bond yields soaring on fears that the Federal Reserve may delay long-forecasted interest rate cuts.
The Fed may find additional reason to delay those interest rate cuts in Wednesday’s report, since stubborn price hikes may raise concern that inflation would move even higher if interest rates were to be lowered.
The inflation reading in December marks an increase from year-over-year inflation of 2.7% in the month prior.
Core inflation — a closely watched measure that strips out volatile food and energy prices — increased 3.2% over the year ending in December, ticking lower than the previous month, the data showed.
Food prices rose 2.5% in December compared to a year ago, moving higher than the previous month but marking slower price increases than the overall inflation rate.
Prices increased for an array of goods last month, including shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care, the U.S. Bureau of Labor Statistics said. By contrast, prices dropped for personal care products and alcoholic beverages, as well as a host of foods, such as white bread, seafood and ice cream.
Egg prices continued to skyrocket in December due to an avian flu that has decimated supply in recent months. The price of eggs soared 36% compared to a year prior, data showed.
Inflation has slowed dramatically from a peak of more than 9% in June 2022, but price increases remain above the Fed’s target rate of 2%.
The Fed retreated in its fight against inflation over the final months of last year, lowering interest rates by a percentage point. Still, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%. The Fed has already indicated worry about the resurgence of escalating inflation over the latter part of 2024.
Last month, the Fed predicted fewer rate cuts in 2025 than it had previously indicated, suggesting concern that inflation may prove more difficult to bring under control than policymakers thought just a few months ago.
Speaking at a press conference in Washington, D.C., in December, Fed Chair Jerome Powell said the central bank may proceed at a slower pace with future rate cuts, in part because it has now lowered interest rates a substantial amount.
Powell also said a recent resurgence of inflation influenced the Fed’s expectations, noting that some policymakers considered uncertainty tied to potential policy changes under Trump.
“It’s common-sense thinking that when the path is uncertain, you get a little slower,” Powell said. “It’s not unlike driving on a foggy night or walking around in a dark room full of furniture.”
Trump has proposed tariffs of between 60% and 100% on Chinese goods, and a tax of between 10% and 20% on every product imported from all U.S. trading partners.
Economists widely forecast that tariffs of this magnitude would increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers.
(NEW YORK) — Starbucks baristas walked off the job in major cities in Massachusetts, Texas and Oregon on Monday, expanding the dayslong holiday strike to 12 cities nationwide, according to the union Starbucks Workers United.
Workers went out on strike in Boston, Dallas-Fort Worth, Texas, and Portland, Oregon, joining baristas in cities spanning from Los Angeles to Philadelphia.
Striking baristas brought business to a halt in almost 50 stores nationwide on Sunday across multiple cities, Workers United said.
“The holiday season should be magical at Starbucks, but for too many of us, there’s a darker side to the peppermint mochas and gingerbread lattes,”Arloa Fluhr, a longtime Starbucks employee in Illinois, said in a statement to ABC News.
Fluhr, a mother of three, struggles to support her family with the wages received from Starbucks, she said. “That’s why we’re steadfast in our demands for Starbucks to invest in baristas like me,” she added.
Workers United, a union representing 525 Starbucks stores in the U.S., said baristas nationwide launched a strike on Friday. The escalation on Monday is the latest expansion of a strike that has grown each day since it began, the union said.
The holiday season is one of the busiest periods of the year for the coffeehouse giant, the union added.
In February, Starbucks Workers United and Starbucks announced they would work on a “foundational framework” to reach a collective bargaining agreement for stores, something the union says has not come to fruition.
“We were ready to bring the foundational framework home this year, but Starbucks wasn’t,” Lynne Fox, president of Workers United, told ABC News in a statement. “Union baristas know their value, and they’re not going to accept a proposal that doesn’t treat them as true partners.”
Starbucks did not immediately respond to ABC News’ request for comment.
In response to ABC News’ previous request for comment, Starbucks spokesperson Phil Gee said the company has not experienced a significant impact from the strike.
“We are aware of disruption at a small handful of stores, but the overwhelming majority of our U.S. stores remain open and serving customers as normal,” Gee said on Dec. 20.
Starbucks said it remains willing to resume negotiations with the union. “Workers United delegates prematurely ended our bargaining session this week. It is disappointing they didn’t return to the table given the progress we’ve made to date,” the company said. “We are ready to continue negotiations to reach agreements.”
The union and the company remain far apart on the key issue of potential wage increases, according to statements from both sides about the other’s proposal.
Workers United told ABC News in a statement that Starbucks had proposed no immediate wage increases for most baristas and a guarantee of only 1.5% wage increases in future years.
Meanwhile, Starbucks said in a statement that the union had proposed an immediate increase in the minimum wage of hourly partners by 64%, as well as an overall 77% raise over the duration of a three-year contract. “This is not sustainable,” a Starbucks spokesperson told ABC News.
Starbucks United contests those figures as a disingenuous characterization of its proposal, the union told ABC News.
Some local elected officials joined workers on the picket lines on Sunday, including Democratic Pittsburgh Mayor Ed Gainey and Democratic New York City Comptroller Brad Lander, the union said.
Baristas have unionized more than 100 Starbucks stores this year, expanding a union campaign that has spread to hundreds of stores across 45 states since an initial victory three years ago at a location in Buffalo, New York, the union said.
The union has filed hundreds of charges with the National Labor Relations Board alleging illegal anti-union activities carried out by Starbucks, including alleged bad-faith negotiations over a potential union contract setting terms at the unionized locations.
Starbucks has denied wrongdoing and faulted the union for breaking off negotiations. The company offers better pay and benefits than its competitors, Starbucks said.
“We are focused on enhancing the partner (employee) experience, with over $3 billion invested in the last three years. Starbucks offers a competitive average pay of over $18 per hour, and best-in-class benefits,” Starbucks said in a statement to ABC News. “No other retailer offers this kind of comprehensive pay and benefits package.”
ABC News’ Leah Sarnoff contributed to this report.
