After a near-textbook campaign to rein in inflation by raising interest rates, the head of the Federal Reserve, Jerome H. Powell, all but promised Friday to start lowering rates next month — with fingers crossed that it’s not too late to avoid a recession.

From the beginning of the inflationary surge triggered more than three years ago by the economic disruptions of the pandemic, it was clear that raising interest rates could tame price hikes. It was also clear that, if rates stayed too high too long, they could choke the economy into recession.

And few states are showing stronger signs of a possible downturn than California, which has felt the impact of high interest rates more severely than others. Not only has its unemployment rate been among the highest in the land while its job creation rate lagged, but pillar industries such as entertainment and tech have also gone through major disruption and many residents and businesses have left the state.

“Overall, the economy continues to grow at a solid pace,” Powell said in a widely anticipated speech at the annual summer symposium of central bankers in Jackson Hole, Wyo. “But the inflation and labor market data show an evolving situation. The upside risks to inflation have diminished. And the downside risks to employment have increased.

“The time has come for policy to adjust,” he said, giving the strongest signal yet of an imminent rate cut.

Investors cheered the news. Major stock indexes rose almost immediately after he began speaking.

Powell did not tip his hand on the size of the coming rate cut, but most analysts widely expect a small quarter-point move next month and a succession of similar reductions over the next year.

But Powell’s emphasis on doing “everything we can to support a strong labor market” gave some economists reason to think that the Fed could make a half-point move next month. Powell said that the pace of policy actions would “depend on incoming data, the evolving outlook, and the balance of risks.”

Whatever the initial size may be, it should fairly quickly nudge down interest rates on credit cards, auto loans and other consumer financing, but the broader economic effects of Fed policy are likely to take hold only gradually.

And with the political climate at a boil and the U.S. unemployment rising significantly since the start of the year, the Fed may find itself behind the curve in reversing course after what has been, up to now, a successful run of lowering inflation while preventing the economy from falling into a recession — the so-called soft landing.

“They’ve got to get going,” said Mark Zandi, chief economist at Moody’s Analytics, who for months has been calling on the Fed to start lowering rates.

Barring major economic changes or extreme volatility in markets, most economists see two to three quarter-point cuts this year and several more over the course of 2025, eventually bringing the Fed’s benchmark rate from the current two-decade high of 5.3% down to around 3%.

Financial markets have already priced in a September quarter-point cut, with stocks having mostly recovered from a big jolt a couple of weeks ago when investors feared the economy was turning down quickly and that it was already too late for the Fed.

Interest rates for a conventional 30-year mortgage were down to a hair below 6.5% this week, from more than 7% as recently as May. Lower rates should also help with auto purchases. Zandi said car sales have slowed as consumers have been waiting for better rates. The average interest rate on a five-year new auto loan was 8.2% in the second quarter, the highest since the Fed’s record keeping began in 2006.

The overriding question with the economy is jobs, both for workers and for political leaders facing a national election in November. And jobs are one of the two basic elements of the Fed’s responsibility. The other is price stability.

Powell acknowledged on Friday that the Fed initially misjudged the inflation spike in spring 2021, thinking that the pandemic-related surge in prices would be “transitory” and one that the Fed could look past.

Most analysts criticized Fed officials for waiting too long to raise rates, but Powell noted that they were hardly alone. “The good ship Transitory was a crowded one,” he said, adding in impromptu remarks, “I think I see some former shipmates out there today,” prompting a moment of laughter from the audience during his 15-minute speech.

It wasn’t until March 2022 when the Fed began raising rates. And, until recently, Powell and his colleagues focused squarely on consumer price inflation, which peaked in June 2022 at 9.1% and has since dropped to just under 3%. With inflation now trending toward the Fed’s 2% target, the central bank’s attention has turned to employment, which has become more worrisome in recent weeks.

First-time unemployment claims have moved up while the number of job openings has shrunk. The nation’s unemployment rate, 4.3% in July, is up from 3.7% in January, and new reports this week indicate that job growth from March 2023 to March 2024 was considerably smaller than previously estimated, though still healthy.

“The cooling in labor market conditions is unmistakable,” Powell said, adding, “We do not seek or welcome further cooling in labor market conditions.”

California’s unemployment rate has held steady in the last three months at 5.2%, but that’s still the second-highest in the country after Nevada. (California earlier in the year had the highest jobless figure.) More recently the pace of job growth in California has picked up, but the July report from the state’s Employment Development Department shows workers in California on average are putting in fewer hours of work.

That may not be a bad thing if more workers are opting for a better work-life balance, something that has become more important since the pandemic, said Erica Groshen, an economist and former commissioner of the U.S. Bureau of Labor Statistics. And, longer term, it could mean companies are more productive if they’re producing as much or more with less labor input.

But the decline in work hours, she said, could signal weakening demand and pending layoffs if business conditions persist or worsen.

The latest data from the state EDD show average weekly hours of work for all private-sector employees was down to 33.4 hours in July, from 34.5 a year ago. That may not seem like much, but it means a significant corresponding drop in average weekly earnings, which turned negative in July compared with a year earlier. Workers in information, education and health services, professional and business services, and the leisure sector, posted fewer hours of work.

“The softening job market tends to go with reduced hours,” said Sung Won Sohn, professor of economics and finance at Loyola Marymount University. “Typically, firms start cutting back hours before shedding jobs.”

That is likely even more true now because over the past several years many employers have had trouble finding new workers when they needed them.

Tom Trujillo, president of a family-owned business that operates eight Wienerschnitzel restaurants in the Southland, has held on to his staff of about 140. But like many other fast-food franchisees, Trujillo said he has cut back on overtime and some part-time employees’ hours as a result of the $20 minimum wage that took effect in April for his industry.

In response , he said he’s raised prices and that some of his stores are opening a little later and some dining rooms closing an hour or two earlier.

“I have a reserve credit line, with a zero balance,” Trujillo said. “The lower interest rates would be nice if I have to draw on that.”

But what he said he needs most today are more customers and for them to come more often.

Whether lower interest rates could help drive greater sales at Trujillo’s and other businesses remains to be seen.

Workers at a company that delivered packages for Amazon are considered employees of the e-commerce giant, the National Labor Relations Board said Thursday, rejecting Amazon’s claim that it is not responsible for the subcontractor’s staff.

The finding, issued by a regional director of the NLRB in Los Angeles, determined there was merit to accusations by the delivery workers that Amazon unlawfully refused to recognize their decision to unionize and failed to negotiate with the union over workplace issues. The NLRB also found Amazon had threatened employees, inappropriately required workers to attend meetings meant to disparage union activity, and failed to provide information requested by the union.

The delivery company, Battle-Tested Strategies, operated out of Amazon’s DAX8 fulfillment center in Palmdale. The company’s owner, Johnathon Ervin, voluntarily recognized the decision by drivers to organize and join a local chapter of the Teamsters union. Amazon ended the company’s contract last year, effectively terminating the jobs of the 84 drivers who delivered Amazon packages.

The findings marked a win for Teamsters officials who challenged a stance long held by Amazon, that it does not exercise control over its subcontracted drivers and so bears no legal responsibility for their working conditions. It could open the door to delivery drivers elsewhere unionizing and demanding Amazon come to the bargaining table.

“Amazon drivers have taken their future into their own hands and won a monumental determination that makes clear Amazon has a legal obligation to bargain with its drivers over their working conditions,” Teamsters General President Sean M. O’Brien said in a statement Thursday. “This strike has paved the way for every other Amazon worker in the country to demand what they deserve and to get Amazon to the bargaining table.”

The NLRB did not find merit to all of the Teamsters’ allegations, however. It dismissed, for example, a claim that Amazon’s decision to end its contract with Battle-Tested Strategies was retaliatory.

Amazon spokesperson Eileen Hards said the NLRB had dismissed “most of the Teamsters’ more significant claims.”

“As they have been for over 15 months, the Teamsters continue to misrepresent what is happening here,” Hards said. “As we have said all along, there is no merit to the Teamsters’ claims. If and when the agency decides it wants to litigate the remaining allegations, we expect they will be dismissed as well.”

Since the Battle-Tested Strategies drivers were terminated in June 2023, the Teamsters have held protests at the Palmdale facility as well as at other Amazon warehouses across the country.

In a statement released by the union, Jessie Moreno, a driver in Palmdale, said: “Amazon can no longer dodge responsibility for our low wages and dangerous working conditions, and it cannot continue to get away with committing unfair labor practices.”

“We are uniting Amazon workers across the country like never before,” Moreno said.

The NLRB’s finding represents a first step in the board’s process for litigating allegations of wrongdoing and comes after an investigation into the workers’ claims that Amazon was engaging in unfair labor practices, NLRB spokesperson Kayla Blado said in an email.

Blado said that if Amazon and the Teamsters do not now reach a settlement in the case, the labor agency would issue a formal complaint based on its findings. After that, the case would be heard by an administrative law judge, who could order the company to implement remedies. The judge’s decision could then be appealed to the labor board in Washington.

After losing its California operating license last year over safety concerns, the autonomous vehicle company Cruise will soon partner with Uber to offer driverless transportation through the popular ride-hail app.

Cruise and Uber announced a multiyear partnership that will begin in 2025 and allow Uber customers to select a driverless Cruise vehicle for qualified trips. The partnership will begin in a single, unspecified city and will rely on Chevy Bolt-based autonomous vehicles.

Cruise grounded its entire fleet in October after California regulators revoked the company’s license to provide driverless rides, alleging that the company mishandled a safety incident in which a pedestrian was struck and dragged by a Cruise vehicle in San Francisco.

The pedestrian, who was in the street after being struck by a car with a driver, was pinned under a Cruise vehicle and sent to the hospital with injuries. In 2018, a self-driving car from Uber hit and killed a pedestrian in Arizona, causing the company to halt its driverless program in several cities.

Driverless Cruise vehicles remain banned in California, but autonomous cars operated by the Google spinoff Waymo are serving customers in San Francisco. Waymo is expanding into cities around the Bay Area and Southern California, the Associated Press reported, and announced that its robotaxis are completing more than 100,000 paid rides per week. Both Cruise and Uber are based in San Francisco.

Cruise, founded in 2013 and owned by General Motors, is providing trips with a driver behind the wheel in Phoenix, Houston and Dallas. The Uber partnership probably will be launched in one of those cities, the company said, and will rely on autonomous vehicles with no driver.

“Cruise is on a mission to leverage driverless technology to create safer streets and redefine urban life,” Cruise Chief Executive Marc Whitten said in a statement announcing the partnership. “We are excited to partner with Uber to bring the benefits of safe, reliable, autonomous driving to even more people.”

Whitten began leading the company after founder and CEO Kyle Vogt stepped down after the California license suspension. The partnership with Uber is the company’s latest move under Whitten to regain public trust and establish a reliable revenue stream.

GM has not made any money off Cruise, instead seeing $5.8 billion in losses on the robotaxi service from 2021 to 2023, according to the AP. The automaker had an operating loss of $900 million on Cruise in the first half of this year.

Despite financial woes and safety missteps, Uber Chief Executive Dara Khosrowshahi said his company is excited about the partnership.

“We believe Uber can play an important role in helping to safely and reliably introduce autonomous technology to consumers and cities around the world,” Khosrowshahi said in a statement.