Business
U.S. hiring cools in January; California's outlook is dimmed by looming cuts in government and aid
WASHINGTON — U.S. job growth slowed at the start of the year, the government said Friday, as business services, manufacturing and other major industries held back on adding jobs amid increased uncertainty about the economy.
The Los Angeles-area wildfires, which began Jan. 7, didn’t have a material effect on the nation’s employment numbers, the Bureau of Labor Statistics noted. But analysts said it remains to be seen what the fires’ effect on jobs will be for California and beyond. Thousands of Californians affected by the fires already have filed for unemployment benefits. The state’s jobs and unemployment numbers for January won’t be reported until next month.
Although the national jobs report Friday was modestly below expectations, a separate national survey on consumer confidence was more concerning: It showed many people foresee increasingly higher prices in the months ahead. That, coupled with strong wage gains last month, sent stocks falling.
Investors and economists worry about tariffs and other Trump administration policies reigniting inflation — which not only would put the kibosh on near-term interest rate cuts but also could force the Federal Reserve to reverse course and raise rates.
“Uncertainty makes it more likely that something could tip us into recession,” said Erica Groshen, an economist and former commissioner of the Bureau of Labor Statistics, which produces the monthly jobs report. “A lot of it is going to depend on confidence,” she added. “Are we going to have a price shock?”
The jobs report Friday showed that the nation’s unemployment rate ticked back down to just 4%, from 4.1% in December. At the same time, hourly wages rose a strong 0.5% in January from the prior month, for an annual growth rate of 4.1%.
Thus far, experts believe that labor costs haven’t spurred inflation, but with the unemployment rate already near historical lows and U.S. birth rates down, plans for mass deportations of unauthorized foreign workers, combined with higher tariffs, probably would add to overall inflationary pressures.
The national jobs report included significant upward revisions to the adult and workforce populations, taking into account the large growth in foreign migration in recent years, although Southwest border crossings have slowed sharply since last summer.
The new population estimates “show clearly that the surge in net immigration was a key factor in boosting U.S. labor supply in the last couple of years, in turn alleviating the labor shortages that were so prevalent in 2022,” said Brian Coulton, chief economist at Fitch Ratings.
The University of Michigan’s consumer sentiment report said people’s expectations for inflation over the next 12 months jumped from 3.3% earlier this year to 4.3% in February, the highest since November 2023.
The Fed’s effort to curb inflation further to its target 2% level has stalled in recent months. Consumer price inflation in the fourth quarter was between 2.6% and 2.9%.
Higher inflation and weaker consumer confidence would weigh on spending and job creation. Last month, nearly all of the 143,000 net gain in payrolls came from healthcare, retail and government. That’s still healthy growth, but lower than the 170,000 that economists were expecting.
And both government and healthcare employers could soon feel the effects of the Trump administration’s moves to pare federal payrolls and public aid that is crucial for health services and social assistance.
That presents challenges especially for states like California, said Michael Bernick, an employment lawyer for Duane Morris in San Francisco. “California has lived off of heightened government spending in the post-pandemic period, but that is coming to an end,” said Bernick, former director of the state’s Employment Development Department.
“Also, California’s main sectors of job growth — healthcare and government — have been targeted for reform and employment reductions by the new administration.”
On the positive side, rebuilding after the wildfires should give a lift to the L.A.-area economy, although it may take some time for employment to bounce up after the disruption of normal economic activity caused by the disaster, which destroyed more than 16,000 structures, most of them houses.
California’s EDD reported that as of Tuesday, workers seeking relief had filed about 5,300 unemployment benefit claims linked to the fires. That’s about 10% of the total new claims filed statewide in the most recent week. Data on federal Disaster Unemployment Assistance for self-employed people weren’t yet available.
For months now, California has been lagging behind the nation in job growth, with hiring weakness in major sectors such as tech and entertainment. The state’s unemployment rate for December was 5.5%, the second-highest in the country, behind Nevada, which was 5.7%. Los Angeles County’s jobless rate was 6% at the end of last year.
The EDD said the statewide jobs report for January won’t be released until March 17, later than usual for most months, because of a yearly review of the statistics using a wider array of information.
Friday’s national jobs report also showed that the U.S. added about 600,000 fewer jobs last year than previously reported. The adjusted figures show that the U.S. economy created, on average, 166,000 additional jobs a month last year, down from 216,000 in 2023.
The rates of new job openings and people quitting their jobs, both of which jumped in 2021 and 2022, have since fallen below pre-pandemic levels. And the labor market outlook has become more cloudy as the new administration has promised to implement a range of policies, some positive and some negative for growth. These include increasing tariffs, cutting taxes and government regulations and implementing mass deportations of immigrants who are in the country illegally.
“The job market still looks solid — and the largest threats to its steadiness are Trump’s plans to deport immigrants and raise tariffs,” said Harry Holzer, a labor economist and public policy professor at Georgetown University.
Early in April, Ruben Hallali got an unusual alert on his phone: The evening temperature at Paris Charles de Gaulle International Airport had jumped about 6 degrees Fahrenheit in seconds.
Mr. Hallali, the chief executive of the weather risk company Sereno, had set up notifications for extreme weather swings. Then, nine days later, it happened again.
“It was an isolated jump, at one single station, early in the evening,” said Mr. Hallali, who added that he noticed another strange coincidence about the spikes: The timing was just right for somebody to reap a windfall on the betting site Polymarket.
He wasn’t the only one who sensed a problem. Météo-France, the country’s national meteorological service, filed a complaint last week with the police and local prosecutors, saying it had evidence that a weather sensor at Charles de Gaulle, the country’s largest airport, may have been tampered with.
The temperature swings, experts said, coincided with a period of unusual activity on Polymarket, one of the leading online prediction markets, which allow users to wager on the outcome of virtually anything.
One increasingly popular area is weather betting, where speculators can make real-time wagers on temperature readings, rainfall totals, the number of Atlantic hurricanes in a year and much more — with payouts in the thousands of dollars and higher.
As the stakes rise, so has the temptation to tamper with the instruments used to generate weather readings in hopes of engineering a lucrative outcome. Experts warn that this could have dangerous ripple effects, like degrading the information that underpins safe air travel.
Temperature data is used in a host of calculations at airports, helping determine correct takeoff distance, climb rate and whether crews need to apply frost treatment to planes. It’s crucial to airport safety, Mr. Hallali said.
“The Charles de Gaulle incident is not an isolated curiosity,” Mr. Hallali said. “It is what happens when financial incentives meet fragile data infrastructure.”
On April 6, the temperature reading at Charles de Gaulle jumped from 64 degrees Fahrenheit to 70 degrees at 7 p.m., before slowly falling over the next hour, according to data from Météo-France.
On April 15, the recorded temperature climbed even more sharply, from 61 degrees at 9 p.m. to 72 at 9:30 p.m., then dropping back to 61 a half-hour later.
In both instances, the spikes set the high temperature for the day, the metric on which some Polymarket wagers rest.
Laurent Becler, a spokesman for Météo-France, said the service contacted the police after noticing the discrepancies in temperature data. He declined to comment further on the case, saying it was under investigation.
Mr. Hallali said that after the first instance, experts and commenters on the French weather forum Infoclimat began to search answers. Theories were floated, including user error. But after the second spike, commenters zeroed in on the unusual Polymarket wagers, which totaled nearly $1.4 million over the two days, according to the company’s data.
The sums bet on April 6 and 15 were hundreds of thousands of dollars higher than on typical days this month.
It is not the first time that strange bets on prediction markets have raised accusations of insider trading.
On Thursday, a U.S. Army special forces soldier who helped capture President Nicolás Maduro of Venezuela in January was charged with using classified information to bet on outcomes related to Venezuela, making more than $400,000 on Polymarket. Late last year, another trader on the site made roughly $300,000 betting on last-minute pardons from President Joseph R. Biden Jr. before he left office.
Polymarket did not immediately respond to a request for comment. While the site used to tie some bets to temperature readings at Charles de Gaulle, this week, after Météo-France filed its complaint, the platform began using temperatures taken at another airport near the city, Paris-Le Bourget, according to recent bets on the site.
Representatives for Charles de Gaulle airport declined to comment beyond saying that the case was under investigation. The airport police also declined to comment. The Bobigny Public Prosecutor’s Office, which is handling the case, declined to answer questions about the investigation but said that no complaint had been filed against Polymarket.
As to how the instruments could have been tampered with, a number of theories have been offered online, including by use of a hair dryer or a lighter. Mr. Hallali said that the precision of the spike on April 15 suggested the use of a calibrated portable heating device, although he declined to speculate about what kind.
“Markets are expanding into every domain where an outcome can be observed, measured, and settled,” he said. “As these markets multiply, so does the surface area for manipulation.”
As the war in Iran strangles the flow of oil around the globe, California’s jet fuel reservoirs are running low.
The state — which refines much of its own fuel in El Segundo and elsewhere but still relies on crude oil imports — has seen its jet fuel stock decline by more than 25% from last year’s peak to a level not seen since 2023, according to data from the California Energy Commission.
The supply is shrinking as a global shortage is already affecting travelers’ summer plans with canceled flights and higher fares. It could even affect plans for people coming to Los Angeles for the 2026 World Cup, which starts in June, said Mike Duignan, a hospitality expert and professor at Paris 1 Panthéon-Sorbonne University.
“People don’t know exactly how this is going to escalate,” he said. “There’s a huge black cloud over the sea for the World Cup and the travel slump that we’re seeing is all linked to this oil shortage.”
As fuel supplies shrink, flight prices are rising. Airlines are adding baggage surcharges to cover fuel costs. Several routes leaving from smaller California hubs, including Sacramento and Burbank, have already been canceled.
Air Canada has suspended flights for this summer, cutting routes from JFK to Toronto and Montreal.
“Jet fuel prices have doubled since the start of the Iran conflict, affecting some lower profitability routes and flights which now are no longer economically feasible,” the airline said in a statement last week.
Europe had just more than a month’s supply of jet fuel left last week, the International Energy Agency said. In an effort to cut costs, the German airline Lufthansa slashed 20,000 flights from its summer schedule this week.
Without a fresh oil supply flowing through the Strait of Hormuz, the situation is unlikely to improve, experts said. The oil reserves countries and companies have in storage are helping fill shortfalls, but the squeezed supply chain could still wreak economic havoc.
“When there’s a shortage somewhere, everything is affected,” said Alan Fyall, an associate dean of the University of Central Florida Rosen College of Hospitality Management. “Airlines are being cautious, and I would say that is a very wise strategy at the moment.”
California’s jet fuel stock reached its lowest levels in two and a half years at 2.6 million barrels last week, down from a peak of more than 3.5 million barrels last year.
The California Energy Commission, which tracks fuel inventory, said the state’s current jet fuel stock is sill sufficient.
“Current production and inventory levels of jet fuel are within historical ranges,” a spokesperson said. “Although supply is tight, no structural deficit has emerged yet. The present tightness reflects short‑term global market stress. As long as refinery operations remain stable, California is positioned to meet regional jet fuel needs.”
Europe has been affected more directly because it relies on the Middle East for the vast majority of its crude oil and many refined products, experts said. California gets crude oil from the Middle East but also from Canada, Argentina and Guyana.
The state has the capacity to refine around 200,000 barrels of jet fuel per day, most of it from refineries in El Segundo and Richmond.
The amount of crude oil originating in the state has been declining since the early 2000s, as state regulations and drilling costs have led to more imports.
California has become particularly vulnerable to supply-chain shocks like the war in Iran, says Chevron, one of the companies that provides jet fuel in the state.
“The conflict in the Mideast Gulf has exposed the danger of California’s decision to offshore energy production,” said Ross Allen, a Chevron spokesperson. “Taxes, red tape and burdensome regulations cost the state nearly 18% of its refinery capacity in just the past year, and we urge policymakers to protect the remaining manufacturing capacity.”
In 2025, 61% of crude oil supply to California’s refineries came from foreign sources, according to the California Energy Commission. Around 23% came from inside the state, down from 35% five years ago.
The state’s refining capacity has also been declining, said Jesus David, senior vice president of Energy at IIR Energy. The West Coast region’s refining capacity has decreased from 2.9 million to 2.3 million barrels a day since 2019, he said.
“California’s had issues prior to the war,” David said. “Nothing new has been built over the past 30 years, and California has closed a lot of capacity.”
The result is higher prices for both gasoline and jet fuel in the state. Jet fuel at LAX costs close to $15 per gallon this week, compared with almost $10 at Denver International Airport and $11 at Newark International Airport.
Gasoline prices have also been hit hard by the global conflict. Average gas prices in California are close to $6 a gallon, around $2 higher than the national average.
The West Coast is a “fuel island” because it’s not connected by pipelines to the rest of the country, United Airlines chief executive Scott Kirby said in an interview last month. That means oil and refined products have to be brought in by ships.
“Fuel price is more susceptible to supply weakness on the West Coast than anywhere else in the country,” Kirby said.
Some airlines might not survive the turmoil if oil prices don’t level out soon, he said. Spirit Airlines, a budget carrier based in Florida, is reportedly facing imminent liquidation if it isn’t bailed out by the Trump administration.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
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