Business

How the spike in gas prices is jolting California’s giant economy

Published

3 months ago

March 15, 2026

How the spike in gas prices is jolting California’s giant economy

With crude oil topping $100 a barrel, and the average price of gas in the state approaching $5.50 a gallon, every touch of the nozzle is painful for California drivers.

Now, with the Iran war nearing its third week, the soaring costs of energy are rippling through the world’s fourth-largest economy.

While economists say it‘s too early to gauge the long-term impacts on the state, one thing is clear: The higher cost to fill gas tanks is eating into Californians’ disposable incomes — what’s spent to buy food and other necessities, or to go out and have fun — while reducing the income of businesses, also facing higher fuel costs.

“Inflation and affordability have been a big concern for the American public, and the longer this goes on, the greater risk there is of increasing overall inflation,” said Trevor Higgins, senior vice president for energy and the environment at the Center for American Progress. The group released a report this week documenting the inflationary impacts of the war and past conflicts.

The price of a gallon of gas hit $5.37 on Thursday, up 82 cents from a month ago, according to AAA. The state consistently has the highest prices in the nation due to taxes, clean air rules and supply constraints.

Before the start of the war, the California economy seemed poised for strong growth despite a lagging jobs market that has seen multiple employers — including several major tech companies such as Google, Block and Autodesk — slash payrolls by the thousands.

The state’s economy grew at a robust 3.8% annualized rate in the fourth quarter, driven by artificial intelligence investment, the burgeoning aerospace industry and other high-productivity sectors, according to the UCLA Anderson Forecast released early this month.

The report predicted a possible pickup in employment this year, but any prolonged conflict in the Middle East means all bets are off.

The $4.1-trillion state economy is highly diverse, with large logistics, manufacturing and agriculture industries, just to name a few sectors having to absorb higher fuel costs — though defense contractors could well benefit from the war.

Just as the state’s more than 25 million registered drivers are experiencing pain at the pump, the rising cost of diesel fuel is hitting Southern California’s large logistics industry, including truckers reliant on diesel fuel.

The average price of a gallon of diesel was up to $6.21 on Thursday, up $1.17 from a month earlier.

The twin ports of Los Angeles and Long Beach are the epicenter of the region’s logistics industry, supporting more than 200,000 jobs and contributing $28 billion to the regional economy in 2022. Some 9,000 truckers visit the ports at least once weekly.

“Diesel fuels all supply chains, and so it will affect the truckers who are servicing the ports immediately. This is going to upset a lot of business plans,” said economist Jock O’Connell, international trade advisor at L.A.’s Beacon Economics.

“There’s every hope that it will be wrapped up within a few weeks at most and will return to normal. But for the time being, there’s going to be a war tax imposed on the entire transportation system of the United States,” he said.

The war also has doubled the costs of bunker fuel that powers ships calling on the local ports with goods from Asia, said Ronald Widdows, chief executive of FlexiVan, a chassis supplier for the logistics industry, during a Port of Los Angeles media briefing Thursday.

That is adding $2 million to the costs of every round trip, which is passed on to the importers here in the United States, he said. Importers include big U.S. toy, apparel and other retailers that can pass on the costs to consumers.

It’s also expected that the disruption in Middle East shipping lanes could slow goods bound for Southern California as they back up in Southeast Asian ports — though for now it’s expected to be minimal, Widdows said.

“That will have some knock-on effect on cargo volume if this goes on for very much longer,” he said.

The state’s $61-billion agricultural industry, the largest in the nation, is highly sensitive to diesel costs too.

“The agricultural industry here in California, as well as the rest of the country, uses a lot of diesel. There’s lots of big equipment, whether it’s an almond harvester or some big tractor in a rice field,” said Daniel Sumner, a professor of agriculture at UC Davis.

While diesel costs are already affecting farmers, another threat on the horizon is higher fertilizer costs due to the rising costs of natural gas, a key feedstock in making it, he said.

Sumner noted the new challenges arrive as the industry is still grappling with President Trump’s tariffs, which — though a majority have been struck down by the Supreme Court — prompted retaliatory actions by longtime trading partners.

The surge in fuel prices comes as the state is experiencing what the Anderson report called a “bifurcated” state economy, with the tech and aerospace industries making up for the lagging construction, retail and segments of the leisure and hospitality industries.

Also lagging has been the kind of hiring expected from a growing economy, exacerbated by thousands of job cuts in Silicon Valley, which firms say have been prompted by artificial intelligence investment and disruption.

Hollywood studios have also laid off thousands because of a slowdown in filming, with the recent Paramount-Warner Bros. Discovery deal stirring fears of more.

Just last week, Oakland fintech Block, the parent of Cash App and payment services company Square, cut more than 4,000 workers citing AI.

The national jobs picture isn’t much better. Last week, the Labor Department reported that employers cut 92,000 jobs in February, a month economists had expected would see a 60,000 gain. The unemployment rate rose to 4.4%.

California’s unemployment rate was 5.5% in December, the most recent available data. That is the highest in the nation, but down a tenth of a point since November.

Michael Bernick, a former director of California’s Employment Development Department, said that although it has been too soon for the war to affect employment, the inflationary pressures brought by higher fuel costs don’t help.

“California’s job market today is among the most competitive and difficult job markets to find a job in that I’ve seen in over 47 years in the field. So it is not like the California economy is in good position in any case,” he said.

As with any war, though, there’s money to be made, and particularly by the defense industry — a sector of the economy in which California holds an advantage over much of the rest of the nation.

Although multiple legacy defense contractors have moved their headquarters out of the state, it retains significant operations of companies such as Boeing, Lockheed Martin, Northrop Grumman and RTX, formerly Raytheon.

Some defense stocks have surged since the start of the war, while the broader Standard & Poor’s 500 index is down about 3%, including a 1.5% drop on Thursday following threats from Iran’s new leader.

Southern California also has seen a resurgence of the industry in recent years, with dozens of aerospace, defense tech and weapons startups planting their headquarters here.

Among them is Anduril Industries, a Costa Mesa startup that builds drone and other autonomous weapons and last year received a $2.5-billion funding round.

Economist Jim Doti, a professor at Chapman University in Orange, said that despite the negative effects of rising fuel costs and inflation, the state economy should benefit from the war.

“The major reason is that one of the most expensive aspects of the war is the use of missiles that are largely produced in California,” he said. “When you look at the macro impact of a war, generally, wars have positive effects on the economy.”

The university forecast in December that the nation’s real gross domestic product would grow 2% this year — a figure that it is now being revised to 2.2%. That is due to the stimulus effect of an expected $100 billion in additional government spending.

How the war affects the overall state and national economies remains to be seen, with economists not in agreement.

This week, the government reported that inflation rose 0.3% in February, and 2.4% over the last 12 months, higher than the Federal Reserve’s 2% target rate. That lessens the likelihood the central bank will cut interest rates and, coupled with the recent jobs report, raises the prospect of “stagflation” — weak growth and higher inflation.

Oxford Economics this week stayed with its 2.8% growth projection for the U.S. GDP.

The forecast noted that higher energy prices will push up inflation that will weigh on disposable incomes, but that would be offset by larger tax refunds due to Trump’s tax-and-spending bill passed last year.

O’Connell, the trade economist, said California’s defense industry will benefit “to the extent we’ve managed to shoot off a large part of our inventory of our arsenal, and we’ll need to replenish that.”

But, he added, “It’s a narrowly focused benefit.”

Business

Read Nick Bilton’s Letter to Scott Pelley

Published

7 hours ago

June 3, 2026

Press Room

Read Nick Bilton’s Letter to Scott Pelley

Dear Mr. Pelley:

I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.

Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.

Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.

Sincerely,

Nick Bilton

Executive Producer, 60 Minutes

Business

Aspiration co-founder sentenced to 14 years for fraud

Published

9 hours ago

June 2, 2026

Press Room

Aspiration co-founder sentenced to 14 years for fraud

The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.

The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.

Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.

Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.

Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.

In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.

The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.

Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.

The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.

The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.

Business

Monterey Park takes landmark vote on banning data centers

Published

19 hours ago

June 2, 2026

Press Room

Monterey Park takes landmark vote on banning data centers

Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.

If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.

Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.

As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.

Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.

“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”

The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.

The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.

While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.

The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.

In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.

The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.

“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”

The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”

While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.

“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”

The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.

As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.

Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.

Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”

While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.

“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”

Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.

Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.

“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”