Jobs report shows US unexpectedly lost jobs in July
Federal Reserve Chair Kevin Warsh speaks during a news conference at Federal Reserve Headquarters on July 29, 2026, in Washington, D.C. (Win McNamee/Getty Images)
(WASHINGTON) — The U.S. economy unexpectedly lost jobs in July, demonstrating a wobbly labor market as shoppers continued to withstand a surge of inflation set off by the Iran war.
The U.S. lost 23,000 jobs in July, according to the federal government’s monthly jobs report, which marked a decline from 57,000 jobs added in June.
The unemployment rate fell slightly from 4.2% in June to 4.1% in July, the Bureau of Labor Statistics (BLS) said. Unemployment remains low by historical standards.
The lackluster figure recorded in July departs from largely resilient performance for the labor market so far in 2026, despite a historic oil shock that has driven up fuel prices and hiked supply-chain costs for a host of other goods.
A government report issued last week showed a steeper slowdown in gross domestic product than expected over three months ending in June, however, suggesting strain in the underlying economy over the early months of the war.
The U.S. added an average of 92,000 jobs per month over the first half of 2026, U.S. Bureau of Labor Statistics data showed. That pace marks an improvement from an average of about 7,000 jobs lost per month over the second half of 2025.
The Iran war drove up gasoline prices and catapulted inflation to a three-year high in May. A preliminary peace agreement in June offered up some relief, but a burst of on-again, off-again fighting in recent weeks caused crude prices to rise again.
The combination of elevated inflation and a resilient labor market has raised the chances of an interest rate hike, futures markets show. Investors peg the odds of a quarter-point rate hike next month at about 56%, according to the CME Group’s FedWatch Tool, a measure of market sentiment.
The Fed opted to hold interest rates steady at its meeting last week, but central bankers appeared divided over the move. Three of the 12 members on the Fed’s policymaking board voted in favor of a rate hike, marking the largest number of dissenters casting ballots in the same direction since 2016.
A rate increase, however, could risk a slowdown in hiring and economic growth over the coming months as corporations face the prospect of higher borrowing costs.
The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
Fed Chair Kevin Warsh, who took the helm of the central bank this summer, has repeatedly vowed to dial back inflation.
“The committee remains resolute — you’ve heard this before — that we will deliver price stability,” Warsh told reporters in Washington, D.C., last week.
Ships are anchored along the shoreline of the Persian Gulf and Strait of Hormuz, April 22, 2026 in Bandar Abbas, Iran. (Getty Images)
(NEW YORK) — Thousands of canceled flights in Europe over a spike in jet fuel prices. An energy emergency declaration in the Philippines. A two-week school holiday in Pakistan to conserve fuel used by commuters.
The U.S.-Israeli war with Iran triggered dramatic steps in a slew of countries bent on weathering one of the worst oil shocks in history, stoking concern by some about a possible global recession.
Economists disagree about whether the standoff in the Strait of Hormuz will ultimately drive the world’s economy into a downturn, in part because the duration of the waterway’s effective closure remains murky. The outcome holds implications for the livelihoods of billions of people and the performance of companies big and small across the globe.
Some analysts said they fear the oil shortage will soon become so dire that crude prices could rise sharply driving up costs for an array of goods and hammering shoppers. The fallout could squeeze businesses and shrink growth, they said.
Others proved more optimistic, pointing to a smaller rise in oil prices than some feared and a recent track record of economic resilience in the face of trade wars and other turmoil. A worldwide downturn, they said, would require a much more prolonged closure of the strait.
“The longer this drags on, the costlier it becomes,” Ryan Sweet, chief global economist at Oxford Economics, told ABC News.
Still, Sweet added: “Whether or not this will cause a global recession, it’s premature to say.”
The conflict, which began on Feb. 28, prompted Iran’s effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the global supply of oil and natural gas.
The vast majority of oil that passes through the strait is bound for Asian markets. But since oil prices are set on a global market, prices have climbed for just about everyone as buyers chase fewer barrels of crude.
On Tuesday, Trump extended a ceasefire with Iran, averting a resumption of wide hostilities, although the move left the strait under Iran’s effective control. The U.S., meanwhile, has mounted a blockade of Iranian ports in the strait, squeezing a key source of government funds derived from oil exports, while exacerbating the global petroleum shortage.
The Brent futures price, the benchmark index for global oil trading, registered at about $106 a barrel on Friday. That price stood about 50% higher than its pre-war level.
Higher oil and gasoline prices risk a pinch at the pump, as well as additional costs for just about every product delivered across the globe on trucks or ships that run on diesel fuel.
“Oil feeds into inflation, which reduces raw purchasing power — how much bang for their buck people have,” Sweet said. “That slows the economy.”
Still, oil prices remain below the highs reached after some previous economic shocks. In 2022, the price of Brent crude surged above $139 per barrel in March, just weeks after the Russian invasion of Ukraine. During the 2008 financial crisis, U.S. gasoline prices shot up as high as $147 a barrel.
Some economic forecasts issued in recent weeks projected that global economic growth could escape the crisis relatively unscathed, as long as the war reaches a resolution in short order and oil prices avoid a steeper climb.
The Organisation for Economic Co-operation and Development (OECD) last month predicted that global gross domestic product (GDP) growth would “remain broadly stable” at 2.9% in 2026. That forecast matched projections issued by the OECD in December, before the war.
The OECD touted strong tech investment and lower-than-expected tariffs, citing “carry-over from robust outcomes in 2025.”
Earlier this month, the International Monetary Fund (IMF) projected that GDP growth would register at a solid pace of 3.1% in 2026, noting that the global economy had withstood “higher trade barriers and elevated uncertainty last year.”
The forecasts from the OECD and IMF worked under the assumption of a resolution to the conflict by the middle of this year, acknowledging the impact could worsen if it stretches on for longer.
Some economists, by contrast, consider the economic threat a more urgent risk.
Paul Krugman, an economics professor at the City University of New York Graduate Center and a former columnist at the New York Times, criticized the IMF projection on Substack on Monday, faulting the group for “seriously underestimating how badly the global economy could be hit.”
“In my view, a full-on global recession is more likely than not if the Strait remains closed for, say, another three months, which seems all too possible,” he said.
Rosier forecasts fail to adequately factor in the risk of a significant rise in oil prices over the near term, Krugman said, warning of widespread “demand destruction” as oil becomes increasingly scarce. Under such a scenario, a surge in oil prices would make it unaffordable for many buyers, forcing them to find alternatives or forgo energy use altogether.
Technical definitions vary about what constitutes a global recession, but the gist is a period of sluggish or negative economic growth. For the World Bank, a global recession amounts to a contraction in global per capita GDP; while the IMF considers GDP growth below 2% sufficient to warrant the label of a recession.
A six-month impasse in the strait could push global oil prices as high as $190 in August, Oxford Economics said in a blog post last month. That price shock would send global inflation to 7.7%, near its peak in 2022, the independent economic advisory firm said.
“But unlike 2022, when the global economy kept growing through the price shock, the severity of this disruption tips the world into outright contraction,” Oxford Economics added.
In addition to its optimistic baseline projection, the IMF issued a downbeat prediction in the event of a more severe disruption of oil markets that stretches into next year. Under those circumstances, the global economy “would come close to experiencing a recession,” the IMF said, noting that it defines a global recession as annual GDP growth below 2%.
Growth below 2% has happened four times since 1980, the group said.
Across the board, economists acknowledged a high degree of uncertainty as the Iran war unfolds. Plus, some said, the negative effects will be unevenly distributed, hitting harder in low-income countries as well as those who depend on oil that passes through the strait.
While the full extent of economic wreckage remains unknown, the prospect of an extended global impact is all but certain, Sweet said.
“This will take a long time to get back up to resembling anything close to normal,” he added.
U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, April 29, 2026. (Photo by Li Rui/Xinhua via Getty Images)
(NEW YORK) — A global pandemic that put millions of Americans out of work within days. The highest inflation in four decades. An unprecedented federal criminal investigation.
Fed Chair Jerome Powell faced a succession of crises over his 8-year tenure atop the central bank, which ends on Friday. Powell’s decisions along the way held stakes as concrete as the budgets of everyday Americans and as heady as the political independence of a pillar institution.
President Donald Trump’s Fed Chair nominee Kevin Warsh is set to take the helm, inheriting a resilient economy by some measures, though one suffering from a renewed bout of inflation.
Powell said last month that he would take the unusual step of staying on at the central bank’s 12-person board of governors after his term expires. The move grants Powell a role in interest-rate policy that could last until 2028, though he says he will step down once a Fed inspector general’s investigation into a renovation of the central bank headquarters is closed.
The transition offers an opportunity to look back at Powell’s tenure, which spanned two presidents, three Treasury secretaries and 66 interest-rate decisions.
“You don’t choose your challenges, but you do choose how you respond,” Claudia Sahm, chief economist at New Century Advisors and a former Fed official, told ABC News. “In the end, Powell’s legacy will be judged by those outcomes.”
When Trump nominated Powell to become Fed chair, Trump described him as a “consensus builder” who “understands what it takes for our economy to grow.”
Powell, a former investment banker and Treasury official under President George H.W. Bush, assumed the role in 2018. At the time, the economy was humming, the unemployment rate clocked in at a historically low level and inflation stood just a tick above the Fed’s target rate of 2%.
Powell hiked interest rates four times in his first year, putting strain on the stock market but leaving the Fed in position to stimulate the economy with rate cuts in the event of a slowdown. Policymakers wouldn’t have to wait long.
In the early months of 2020, the COVID-19 pandemic put tens of millions of Americans into lockdown, halting business across industries like restaurants and hospitality, while putting a large swathe of the labor force out of work.
At an emergency meeting in March 2020, Powell slashed interest rates to near-zero levels in an effort to stimulate a battered economy.
“Families, businesses, schools, organizations, and governments at all levels are taking steps to protect people’s health. These measures, which are essential for containing the outbreak, will nonetheless understandably take a toll on economic activity in the near term,” Powell told reporters at the time.
The unemployment rate soared from 4.4% in March to 14.7% in April, U.S. Bureau of Labor Statistics data showed.
To supercharge the recovery, Trump and President Joe Biden enacted economic stimulus meant to support people who’d lost their jobs or faced other hardship. Alongside low interest rates, that spending helped bring about a speedy economic recovery from the downturn.
The COVID-19 recession lasted only two months, making it the shortest in U.S. history, according to the National Bureau of Economic Research.
The speedy recovery vindicated the Fed’s decision to slash interest rates, though it hadn’t been a particularly difficult choice, Alan Blinder, a professor of economics at Princeton University and former vice chairman of the Federal Reserve, told ABC News.
“The dropping of rates to the floor was both necessary and appropriate, and in a real sense, obvious,” Blinder said.
A bout of acute inflation soon took hold, however, emerging as a result of a supply shortage imposed by the COVID-19 pandemic and exacerbated by the Russia-Ukraine war. Powell initially downplayed the price increases, describing them as “transitory.” It proved a consequential mistake — and Powell would later admit his error.
Annual inflation peaked at a 40-year high of 9.1% in June 2022. By then, Powell had begun to ratchet up interest rates and it would continue over the following year. The aggressive series of rate hikes put the central bank’s benchmark rate at its highest level since 2001. The move sent mortgage and credit card rates soaring.
By June 2023, annual inflation had plummeted to 3%, but Americans remained widely dissatisfied with price increases long afterward. Many economists forecast a recession and the type of job losses it typically entails. Fortunately, the downturn never came to pass.
“Inflation stayed high for too long but once it came down, it came down really fast. It came down without creating unnecessary pain in the labor market,” Wendy Edelberg, director of the Hamilton Project and senior fellow in economic studies at the Brookings Institution, told ABC News.
In September 2024, less than two months before the presidential election, the Fed cut interest rates by 0.5%. The decision drew criticism from allies of Trump, who considered the move a potential boost for the economy that would benefit incumbent Democrats. Trump went on to win the election.
Within weeks of his return to the White House, in early 2025, Trump voiced public criticism of Powell, urging him to cut interest rates. The attacks intensified criticism of Powell that had begun in Trump’s first term.
Over the ensuing months, Trump began to slam Powell for cost overruns in a renovation project at the Fed’s headquarters in Washington, D.C. Last July, Trump made the first official trip to the Fed by a sitting president in almost 20 years, donning a hard hat as he toured the renovation with Powell.
The Fed attributed spending overruns to unforeseen cost increases, saying that its building renovation would ultimately “reduce costs over time by allowing the Board to consolidate most of its operations,” according to the central bank’s website.
By January, the Department of Justice had opened a criminal investigation into Powell, ratcheting up an extraordinary clash between the White House and the Fed. It was the first criminal probe of a Fed chair in the 113-year history of the central bank.
The probe centered on Powell’s testimony to Congress last year about the cost overruns. Powell issued a rare video message rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.
“No one — certainly not the chair of the Federal Reserve — is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Trump previously denied any involvement in the criminal investigation. The DOJ moved to drop its criminal probe into Powell last month. Washington U.S. Attorney Jeaninne Pirro said the investigation into the office renovation would be taken up by the Fed’s inspector general.
“The attack on the Fed chair was appalling,” Rebel Cole, a professor of finance at Florida Atlantic University who formerly worked at the Federal Reserve, told ABC News. “Powell stood up to it.”
Warsh, a former Fed official, will serve a 4-year term as chair. He is set to lead the Fed in a challenging period for central bank policymakers.
Inflation rose for a second consecutive month as the U.S.-Israeli war with Iran continued to send gasoline prices surging in April, government data on Tuesday showed. Annual inflation jumped to its highest level in three years, according to the U.S. Bureau of Labor Statistics.
Despite the disruption, some measures of economic health have proven resilient.
The unemployment rate held steady at a historically low level of 4.3% in April, leaving it little changed from when Powell began his tenure in 2018.
“The economy is pretty good but far from perfect,” Blinder said, faulting Powell in part for elevated inflation, while attributing much of the blame to the Iran war. At the same time, Blinder praised Powell for his commitment to the independence of the Fed.
“That’s the legacy that Warsh is inheriting,” Blinder said.
A Spirit Airlines aircraft prepares to depart from the Austin-Bergstrom International Airport on November 13, 2024 in Austin, Texas. (Photo by Brandon Bell/Getty Images)
(NEW YORK) — The Department of Transportation said on Saturday the majority of airlines will be capping tickets prices for Spirit Airlines travelers who need to rebook their canceled flights.
Some carriers have even reduced fares on high volume routes where Spirit used to operate.
Spirit began winding down operations early Saturday morning after talks between the airline and the federal government over a $500 million rescue deal stalled.
Spirit said that travelers who booked their tickets with a credit or debit card will be automatically refunded.
United, Delta, JetBlue and Southwest said they are capping ticket prices specifically for Spirit customers who need to rebook cancelled flights.
To access these special prices, individuals will need to provide at least a Spirit flight confirmation number and proof of payment, the airlines said.
These fares will only be available for a short period:
JetBlue: Available for 72 hours Southwest: Available for 72 hours; only in person at an airport ticket counter Delta: Available for five days United: Available for two weeks online American Airlines and Delta Air Lines are offering reduced fares on high-volume Spirit routes.
United Airlines said for the next two weeks, customers who were booked on Spirit can get one-way tickets on United flights from most cities where Spirit previously operated, including Atlanta, Chicago, Fort Lauderdale, Houston, Las Vegas, Miami, Newark, New Orleans and Orlando.
The airline said it has capped most of its fares at $199, though exceptions apply with longer flights not priced higher than $299.
Travelers will need to enter their Spirit confirmation number and verify they were scheduled to travel between May 2 through May 16 in order to be qualify for these special fares.
American Airlines said it has also launched a page on its website that displays rescue fares to and from a range of domestic and international destinations for Spirit customers needing to rebook travel.
The airline said it’s also reviewing adding additional capacity, including flying bigger planes and adding more flights on routes Spirit used to fly, to accommodate as many passengers as possible.
Allegiant Air has also committed to freezing fare prices across routes that overlap with Spirit. To support impacted travelers, Frontier Airlines is offering up to 50% off base fares across its network until May 10.
To help Spirit employees, the Department of Transportation said most major U.S. carriers are extending travel pass benefits and spare jump seats so employees can return to their homebases.
Airlines are also offering Spirit team members preferential employment interviews to ensure they jump the queue. American and United said they’re creating microsites for Spirit employees looking to continue a career in aviation, per the federal agency.
