(NEW YORK) — Wholesale prices unexpectedly dropped in August, clocking in lower than economists expected and defying concerns about a tariff-induced spike in costs suffered by suppliers.
Producer prices fell 0.1% in August, rolling back some of a sharp increase in wholesale prices that took hold in the previous month, the U.S. Bureau of Labor Statistics said on Wednesday.
Since President Donald Trump began escalating tariffs earlier this year, the monthly wholesale-price measure has drawn close attention as an indicator of a potential pass through to consumer prices.
In July, producer prices rose 0.9%, exceeding economists’ expectations and stoking fear of an eventual hike in prices paid by shoppers. The downshift in wholesale prices last month could ease some of those worries, though analysts will gain further clarity from consumer price data scheduled to be released on Thursday.
The wholesale price data on Wednesday held some cause for concern, however. A measure of core producer prices – which strips out volatile prices for food and energy – jumped 0.3% in August, which marked the fourth consecutive month of increases for that measure.
Overall, wholesale prices climbed 2.8% over a year ending in August, which marked the largest one-year jump in the index since March.
The fresh data arrives at a challenging time for the nation’s economy. In recent months, inflation has picked up while hiring has slowed, posing a risk of an economic double-whammy known as “stagflation.”
Fed Chair Jerome Powell recently hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than for rising prices. Investors widely expect a quarter-point interest rate cut when Fed policymakers meet later this month.
(NEW YORK) — U.S. employers added far fewer jobs in 2024 and early 2025 than previously thought, indicating the labor market may have been significantly weaker than initial estimates had suggested.
The U.S. economy added 911,000 fewer jobs over the 12 months ending in March than previously estimated, the U.S. Bureau of Labor Statistics (BLS) said on Tuesday. The figure, which exceeded economists’ expectations, marks the largest revision ever recorded.
The revision, a routine step in the compilation of government labor statistics, assesses monthly survey estimates alongside state unemployment data. The fresh data comes weeks after President Donald Trump fired BLS Commissioner Erika McEntarfer in response to a weak monthly jobs report.
The scale of the revision announced on Tuesday exceeds a downward reduction in hiring estimates last year that has drawn criticism from Trump in recent weeks.
In that case, the BLS said in August 2024 that U.S. employers had hired 818,000 fewer workers over a previous year-long period. When Trump fired McEntarfer last month hours after the release of monthly jobs data, he mentioned frustration with the annual revision issued in 2024.
“I believe the numbers were phony just like they were before the election, and there were other times,” Trump said, pointing to the revision in the jobs numbers last year that he claimed, without evidence, was an attempt to benefit Democrats heading into the election.
The BLS, a government agency within the Department of Labor, tracks a host of key economic indicators, including widely anticipated hiring and inflation reports released each month.
The BLS releases an initial estimate of its jobs report based on an initial tranche of data, but the agency often revises the figure in subsequent months as households and businesses return additional data. After a slow-moving process of compiling state unemployment data, the agency releases an additional revision teasing out accurate findings.
McEntarfer, a Biden appointee who was confirmed by the Senate in 2024, had served in the federal government for two decades.
“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”
William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned McEntarfer’s dismissal.
“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.
McEntarfer did not respond to an earlier ABC News request for comment.
Treasury Secretary Scott Bessent speaks alongside President Donald Trump during a press availability in the Oval Office of the White House, Sept. 5, 2025. (Kevin Dietsch/Getty Images)
(NEW YORK) — Employers in nearly every industry have cut back on hiring, according to the latest data, leaving job seekers with fewer places to turn.
A recent jobs report extended a lackluster run of labor data that stretches back to the beginning of the summer. While the unemployment rate stands at a historically low level, millions of out-of-work Americans face stiff conditions.
Nearly two million job seekers have been out of the workforce for more than 27 weeks, which amounts to about a quarter of all unemployed people, the U.S. Bureau of Labor Statistics said on Friday.
At the same time, worker confidence in their ability to find a new job has hit a record low, according to a survey released by the New York Federal Reserve on Monday.
Analysts who spoke to ABC News attributed the tepid job market in part to economic uncertainty hanging over employers as a result of President Donald Trump’s tariff and immigration policies. The recent adoption of artificial intelligence tools has also diminished prospects for jobs in some entry-level roles, some analysts added.
“New hiring has really slowed to a crawl,” Mark Hamrick, senior economic analyst at Bankrate, told ABC News.
In a note to clients Friday, Joseph Brusuelas, global economist at RSM, described the U.S. as a “slow hire, slow fire economy,” saying that a sharp increase in tariffs has burdened some importers with higher taxes and cast doubt over the nation’s economic outlook.
“The impact of tariffs on hiring is undeniable,” Brusuelas said in the note, adding that the levies had “pushed economic uncertainty to the highest level in years.”
Restrictive immigration policies, meanwhile, have reduced the supply of available workers and threatened employers with higher labor costs, deepening a sense of uncertainty, some analysts said.
The Trump administration has pursued an immigration policy that features the detention of undocumented immigrants at work sites and the revocation of Temporary Protected Status – a form of temporary legal status – for hundreds of thousands of immigrants.
“We’re deporting lots and lots of working immigrants. That just stirs the pot even further in terms of employers feeling, ‘We don’t know what’s going on here,’” Michelle Holder, a labor economist at John Jay College of Criminal Justice, told ABC News.
For its part, the Trump administration downplayed the weaker-than-expected jobs report late last week, voicing expectations of an upward revision of the data and predicting better job performance.
A tax-cut measure enacted by Trump earlier this year will boost business investment and drive up hiring, Kevin Hassett, director of the National Economic Council, told reporters on Friday.
“President Trump knows that we’re super optimistic about the future of the jobs numbers, because we’re seeing a massive blowout in capital spending,” Hassett said.
The hiring cooldown has hit nearly every industry, including leisure and hospitality and the federal government, BLS data shows.
The manufacturing sector has suffered a net loss of 78,000 jobs this year in the midst of a tariff policy that the Trump administration has said is aimed at reviving domestic production. Construction, another key sector dependent on long-term investment, has incurred a net loss of 10,000 jobs over the past three months.
“This has to do with producers’ uncertainties about the future,” Holder said.
In response to the flagging labor market, the Fed is expected to cut interest rates when policymakers meet later this month. Investors peg the chances of a quarter-point rate cut this month at about 88% and the odds of a half-point cut at nearly 12%, according to CME FedWatch Tool, a measure of market sentiment.
In theory, a reduction of interest rates could boost hiring as borrowing expenses fall and businesses encounter more favorable conditions for new investment. However, the Fed’s incremental approach is unlikely to yield major improvement for job seekers anytime soon, Hamrick said.
“It will have a marginal impact for people,” Hamrick added. “I don’t see that producing a sea change in the environment anytime soon.”
(WASHINGTON) — Fresh jobs data on Friday showed a continued hiring slowdown in the first such release since a dismal jobs report last month prompted President Donald Trump to fire the top official tasked with compiling labor statistics. The reading fell well short of economists’ expectations.
The U.S. added 22,000 jobs in August, according to data from the U.S. Bureau of Labor Statistics. That figure showed a sharp decrease from 79,000 jobs added in the previous month. The unemployment rate ticked up to 4.3%, but it remained at a historically low level.
A previous jobs report showed a sharp slowdown of hiring over the summer, eliciting concern among some economists about a possible recession.
The U.S. added an average of about 28,000 jobs over three months ending in July, which marked a major cooldown from the roughly 196,000 jobs added on average over the previous three-month period, U.S. Bureau of Labor Statistics (BLS) data showed.
The jobs report on Friday included a downward revision for the month of June, saying the U.S. labor market had lost 13,000 jobs that month, much lower than a previous estimate of 14,000 jobs added. It marked the first monthly job loss since December 2020.
The latest jobs data holds implications for a widely expected interest rate cut when top Federal Reserve policymakers gather in two weeks.
Fed Chair Jerome Powell recently said the central bank would “proceed carefully” but he hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than rising prices.
The lower-than-expected reading on Friday could cement a potential interest rate cut, which would amount to the first interest-rate adjustment since last year.
Late Thursday, investors pegged the chances of a quarter-point rate cut this month at 97%, according to CME FedWatch Tool, a measure of market sentiment. As of Friday morning, the odds of a a quarter-point cut had risen to 99%.
Hours after the release of the weak jobs report last month, Trump removed BLS Commissioner Erika McEntarfer. The jobs report featured downward revisions, prompting Trump to suggest without evidence that the job statistics had been “manipulated.” The BLS routinely revises estimates of jobs added in previous months.
McEntarfer, a Biden appointee who was confirmed by the Senate in 2024, had served in the federal government for two decades.
“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”
William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned McEntarfer’s dismissal.
“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.
McEntarfer did not respond to an earlier ABC News request for comment.
As a replacement for McEntarfer, Trump nominated E.J. Antoni, chief economist at the conservative-leaning Heritage Foundation. Antoni is a longtime critic of the BLS and a contributor to the conservative policy blueprint Project 2025.
“Our Economy is booming, and E.J. will ensure that the Numbers released are HONEST and ACCURATE,” Trump said of Antoni in a social media post.
A 500 gram gold bar is seen in a gold shop window on April 17, 2025 in Istanbul, Turkey. Chris McGrath/Getty Images
(NEW YORK) — The price of gold topped $3,500 per ounce for the first time ever on Tuesday, reaching toward new record highs as trading stretched into midday.
Gold prices have soared 35% so far this year, far outpacing a 9% gain in the S&P 500. Over that period, the Dow Jones Industrial Average has jumped 6% and the tech-heavy Nasdaq has climbed 10%.
The rush toward gold reflects heightened economic uncertainty, experts said. The safe-haven asset offers investors a hedge against an uneasy financial environment as a sharp hiring slowdown coincides with a steady uptick of inflation, according to analysts. Stress in long-term bond markets and a devaluation of the U.S. dollar have unsettled alternative assets typically viewed as low-risk investments, they added.
“The probability of an economic slowdown has greatly increased and people naturally look for a safe haven asset,” Campbell Harvey, a professor at Duke’s Fuqua School of Business who studies gold prices, told ABC News.
However, gold prices carry volatility of their own, especially when buyers enter the market at a high point, risking losses instead of a security blanket.
The run-up in gold prices comes after a steep drop-off in monthly hiring and a gradual rise in inflation.
The U.S. added an average of about 35,000 jobs over three months ending in July, which marked a major cooldown from roughly 196,000 jobs added on average over the previous three-month period, U.S. Bureau of Labor Statistics data showed.
Meanwhile, a measure of underlying inflation stands at its highest level since February, in part due to tariff-induced price increases.
Investors widely expect the Federal Reserve to cut interest rates this month in an effort to counteract the labor market slowdown. Markets peg the chances of a quarter-point interest rate cut at 91%, according to CME FedWatch Tool, a measure of investor sentiment.
The expectation of an interest rate cut establishes financial conditions marked by low interest rates for short-term U.S. bonds alongside persistently elevated interest rates for long-term bonds, since many investors fear a return of inflation amid ongoing tariffs, Aakash Doshi, head of gold strategy at State Street Investment Management, told ABC News.
Those dynamics reflect a favorable environment for gold, Doshi added. On the one hand, a near-term interest rate cut would reduce competition from short-term U.S. bonds, since the interest payments on such products will fall.
Meanwhile, elevated interest rates for long-term bonds reflect flagging demand for such investments as inflation fears mount and President Donald Trump pressures the Fed to dramatically lower interest rates. By comparison, gold appears a relatively safe long-term investment.
“The Fed is cutting because of a weak labor market but inflation is still elevated. That supports alternative fiat assets like gold,” Doshi told ABC News.
The flight away from some long-term bonds has coincided with a depreciation in the value of the U.S. dollar. Its value against other currencies plunged about 11% over the first half of 2025, the biggest decline in more than 50 years, a Morgan Stanley report last month found.
The decline in the U.S. dollar’s value reflects a shift away from global dependence on the dollar as a global reserve currency, Harvey said. As a replacement for the dollar, some investors have sought out gold, boosting the asset’s price, he added.
“Countries and institutions are diversifying their portfolios, which are heavily weighted to U.S. dollar assets. They’re adding something else – and that something else is in part gold,” Harvey said.
(WASHINGTON) — A tariff loophole for low-cost shipments helped fuel an explosion of U.S. consumers purchasing shoes, sunglasses and a host of other items directly from sellers overseas. The Trump administration closed that exemption on Friday, bringing the era of duty-free online buying to an end.
President Donald Trump closed what’s known as the “de minimis” loophole, which allowed for duty-free import of goods valued at less than $800. Now, such imports will face tariffs based on the relevant rates for a given country of origin or product.
Peter Navarro, senior counselor to the president for trade and manufacturing, said on Thursday that the move would add up to $10 billion in tax revenue and help “save thousands of American lives by restricting the flow of narcotics and other dangerous and prohibited items.”
Analysts who spoke to ABC News predicted delays and price increases for shoppers, though the precise impact remains uncertain as retailers and customers adapt to the new tariffs.
Here’s what to know about how the closure of the de minimis loophole could impact consumers:
What is happening with the de minimis loophole?
The Trump administration on Friday closed the de minimis loophole, meaning imported packages below $800 will be subject to tariffs.
In May, the exemption expired for shipments from mainland China and Hong Kong, prompting e-commerce companies Shein and Temu to warn of price increases. The move on Friday extends the policy to imports from all other countries.
Low-cost imports brought via delivery services like FedEx and DHS will face country-specific tariff rates, which range from 10% to 50%. Tariffs targeting product types, such as steel and aluminum, may also be applied.
Packages delivered by a foreign postal service will be subject to tariffs levied under the International Emergency Economic Powers Act, which depend on a given country of origin.
Over the past 10 years, the number of shipments to the U.S. claiming the de minimis exemption soared 600%, U.S. Customs and Border Protection, or CBP, said in January. Last fiscal year, there were more than 1.36 billion such shipments, which amounts to almost 4 million per day, CBP said.
A small loophole remains in the policy. Gifts valued at $100 or less will continue to be duty-free.
Will closure of the de minimis loophole cause shipping delays?
Yes, the closure of the de minimis loophole is expected to delay low-cost shipments from overseas, especially over the coming months as foreign sellers adjust to the rules, analysts told ABC News.
Postal service operators in more than 30 countries have limited or halted shipments to the U.S. in anticipation of the policy adjustment. The list includes significant trade partners like India, Mexico and Japan.
Under the new policy, foreign postal services are required to calculate the tariff cost prior to sending a parcel bound for the U.S., Henry Jin, a professor of supply chain management at Miami University, told ABC News.
“The administrative burden is tremendous,” Jin said.
Packages previously shipped in five to 10 days may take as long as 20 days to reach customers, Jin added.
“If you absolutely need something by a certain deadline, buy it well before,” Jin said. “Or else you will run the risk of not getting it in time.”
Will closure of the de minimis loophole raise prices?
Yes, analysts who spoke to ABC News expect closure of the loophole to raise prices.
The policy change essentially amounts to a new tariff applied to low-cost items, meaning importers will face an additional tax. Importers typically pass along a share of the tariff-related tax burden onto consumers in the form of price hikes.
In the case of imports shipped directly to customers, foreign retailers will retain a choice of whether to eat the added cost or slap it onto the bill paid by shoppers, Jin said. Suppliers may swallow some of the added cost by selling their goods at lower wholesale prices, Jin added, but such relief is likely to be minimal.
Additional compliance costs faced by retailers will also likely be passed along to consumers, analysts said.
“It will significantly raise the transportation cost on top of the cost of the tariffs, which will ultimately raise prices for consumers,” said Raymond Robertson, professor for trade, economics and public policy at Texas A&M University.
(WASHINGTON) — Federal Reserve Governor Lisa Cook sued President Donald Trump on Thursday over his move to fire her, saying she should retain her position as a top policymaker at the central bank.
The lawsuit, filed in U.S. District Court for the District of Columbia, describes Trump’s effort as “illegal and unprecedented,” claiming Cook’s ouster violates the independence of the Fed, a cornerstone of the nation’s economy.
Trump’s action violates Cook’s constitutional right to due process, as well as her right to notice and a hearing under the Federal Reserve Act, the lawsuit says.
Hours after Cook filed the lawsuit, a judge granted a hearing for Friday morning. The case has been assigned to Judge Jia M. Cobb, who was nominated to the court in 2021 by former President Joe Biden.
Federal law allows the president to remove a member of the Fed board “for cause,” though no president has attempted such a removal in the 112-year history of the central bank.
In a letter posted on social media earlier this week, the president moved to fire Cook over allegations lodged by a Trump administration official, who claimed she had committed mortgage fraud. Trump pointed to a “criminal referral” from Federal Housing Finance Agency Director William Pulte. Cook has not been charged for the alleged misconduct.
In a previous statement, Cook’s attorney rebuked Trump’s social media post.
“President Trump has taken to social media to once again ‘fire by tweet’ and once again his reflex to bully is flawed and his demands lack any proper process, basis or legal authority. We will take whatever actions are needed to prevent his attempted illegal action.”
Cook has not directly addressed the substance of the allegations against her. In a statement last week, Cook said she would seek out her financial documents to answer “any legitimate questions and provide the facts.”
The move came after Trump railed for months against the Federal Reserve and its Chair Jerome Powell for declining to heed his call for lower interest rates.
In the lawsuit, Cook’s attorney rebuked the allegations as a pretext aimed at removing her for political reasons. Cook has repeatedly voted against interest rate cuts, the lawsuit notes.
“That the President says he has found (or created) some basis for removing a Governor does not magically make such a basis grounds for a ‘for cause’ removal,” the filing says. “The President had no ’cause’ to remove Governor Cook.”
“President Trump has indicated his desire to impede the independence of the Federal Reserve since he assumed office in January 2025,” the lawsuit adds.
The lawsuit names Powell and the Federal Reserve Board of Governors as co-defendants. The Federal Reserve Board, its governors and Powell are sued in their official capacities “to the extent that any individual Governor has the ability to take any action to effectuate President Trump’s purported termination of Governor Cook,” the lawsuit says.
Cook’s lawsuit urged a judge to find her attempted firing “unlawful and void,” adding that Cook seeks “immediate declaratory and injunctive relief to confirm her status as a member of the Board of Governors.”
The lawsuit also asked the judge to issue a declaration outlining the definition of “cause” — which Cook’s lawsuit says includes only “instances of inefficiency, neglect of duty, malfeasance in office, or comparable misconduct.”
In a statement to ABC News, the White House rebutted Cook’s claims, saying Trump’s move to fire Cook is permitted under federal law.
“The President exercised his lawful authority to remove a governor on the Federal Board of Governors for cause under 12 U.S.C. 242. The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions. The removal of a governor for cause improves the Federal Reserve Board’s accountability and credibility for both the markets and American people,” White House spokesperson Kush Desai said.
The Federal Reserve declined to comment. In a previous statement, the Fed affirmed the independence of the central bank and vowed to abide by a court ruling on the matter.
“The Federal Reserve will continue to carry out its duties as established by law,” the Fed said. “The Federal Reserve reaffirms its commitment to transparency, accountability, and independence in the service of American families, communities, and businesses.”
Two Fed governors appointed by Trump — Michelle Bowman and Christopher Waller — already sit on the seven-member board. A third appointee — Stephen Miran, chair of the White House Council of Economic Advisors — has been nominated as a replacement for Adriana Kugler, who retired this month. If Trump were to replace Cook, his appointees would make up a majority of the Fed board.
Five meetings and eight months have elapsed since the Fed last adjusted interest rates.
Last week, Federal Reserve Chair Jerome Powell said the central bank faces a “challenging situation” as a hiring slowdown coincides with tariff-driven price increases, putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.
Powell said the Fed would “proceed carefully” but he hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than rising prices.
The policy shift may align the Fed with Trump’s desire for lower interest rates, though the central bank is expected to opt for a modest quarter-point reduction rather than the larger cut Trump has sought.
The Federal Open Market Committee (FOMC), a 12-member body responsible for setting interest rates, is made up of the seven members of the Fed board as well as a rotating set of five Federal Reserve bank presidents.
In February, the members of the Fed board will oversee the appointment of presidents of the Federal Reserve banks, meaning a potential Trump-appointed majority on the board could aim to install allies.
Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show at the Parc des Expositions de la Porte de Versailles on June 11, 2025, in Paris. (Chesnot/Getty Images, FILE)
(NEW YORK) — Chip giant Nvidia delivered more revenue than expected over a recent three-month period, the company said on Wednesday, defying concern among some prominent figures about a possible bubble in the artificial intelligence industry.
The California-based company recorded $46.7 billion in sales over three months ending in July, which exceeded analyst expectations of $46.2 billion. The jump in revenue marked 56% growth compared to the same quarter a year earlier.
The fresh data offered the latest window into the health of the artificial intelligence (AI) industry, which in recent years has become a key engine for stock market gains and economic growth.
Nvidia, the $4 trillion company behind many of the chips fueling AI products, has expanded at a breakneck pace since an AI boom set off by the release of OpenAI’s ChatGPT in 2022. The California-based company saw its stock price soar nearly 700% over the ensuing two years.
Alongside continued growth, the company is weathering new challenges. President Donald Trump barred the sale of chips to China earlier this year, before revoking the ban in July. A month later, Trump struck an agreement with Nvidia allowing the company to sell chips in China if the firm hands over 15% of revenue generated by the exports to the U.S.
Speaking at the White House earlier this month, the president recounted the agreement with Nvidia.
“I said, ‘If I’m going to do that, I want you to pay us as a country something, because I’m giving you a release,'” Trump said.
In May, the company said it expected to suffer an $8 billion loss as result of restrictions imposed upon chip exports. Earnings released on Wednesday said the company did not sell any H20 chips in China over the most recent quarter, but the firm did not mention any losses related to the policy.
In recent weeks, some prominent figures have warned of an AI bubble, casting doubt on the sustainability of the sector’s gangbusters growth. Torsten Sløk, chief economist at Apollo, said last month that the AI bubble may exceed the dot-com bubble of the 1990s, suggesting that the top firms are overvalued.
In an interview earlier this month, OpenAI CEO Sam Altman also said the AI industry had become a bubble.
“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” Altman told tech publication The Verge.
Still, the AI sector remains a bright spot for the U.S. economy. AI-related spending added a 0.5 percentage point boost to annualized gross domestic product growth over the first half of 2025, Pantheon Macroeconomics found.
Co-founder and chief executive officer of Nvidia Corp., Jensen Huang attends the 9th edition of the VivaTech trade show at the Parc des Expositions de la Porte de Versailles on June 11, 2025, in Paris. (Chesnot/Getty Images, FILE)
(NEW YORK) — An earnings report to be released by chip giant Nvidia on Wednesday will offer a window into the health of the artificial intelligence (AI) industry, which in recent years has become a key engine for stock market gains and economic growth.
Nvidia, the $4 trillion company behind many of the chips fueling AI products, has expanded at a breakneck pace since an AI boom set off by the release of OpenAI’s ChatGPT in 2022. The California-based company saw its stock price soar nearly 700% over the ensuing two years.
Analysts expect Nvidia to record $46.2 billion in revenue over three months ending in June, which would amount to a 53% jump compared to a year earlier. That would mark robust growth but it would come in well below a 122% spike in revenue enjoyed in the same quarter a year ago.
Alongside continued growth, the company is weathering new challenges. President Donald Trump barred the sale of chips to China earlier this year, before revoking the ban in July. A month later, Trump struck an agreement with Nvidia allowing the company to sell chips in China if the firm hands over 15% of revenue generated by the exports to the U.S.
Speaking at the White House earlier this month, the president recounted the agreement with Nvidia.
“I said, ‘If I’m going to do that, I want you to pay us as a country something, because I’m giving you a release,'” Trump said.
In May, the company said it expected to suffer an $8 billion loss as result of restrictions imposed upon chip exports.
In recent weeks, some prominent figures have warned of an AI bubble, casting doubt on the sustainability of the sector’s gangbusters growth. Torsten Sløk, chief economist at Apollo, said last month that the AI bubble may exceed the dot-com bubble of the 1990s, suggesting that the top firms are overvalued.
In an interview earlier this month, OpenAI CEO Sam Altman also said the AI industry had become a bubble.
“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” Altman told tech publication The Verge.
Still, the AI sector remains a bright spot for the U.S. economy. AI-related spending added a 0.5 percentage point boost to annualized gross domestic product growth over the first half of 2025, Pantheon Macroeconomics found.
Vegetables on display in a grocery store on August 15, 2025 in Delray Beach, Florida. Joe Raedle/Getty Images
(NEW YORK) — Consumer confidence worsened slightly in August, erasing some gains from the previous month and resuming a downward trend suffered at the outset of 2025, the Conference Board said on Tuesday.
The souring of shopper attitudes followed a weak jobs report and a set of sweeping new tariffs issued by President Donald Trump. A lower-than-expected inflation report this month eased some concerns about significant tariff-induced price increases, though a measure of underlying inflation ticked up.
The consumer confidence index declined 1.3 points to 97.4 in August, the Conference Board said. The figure came in higher than economists expected. The index has hovered around the same level over the past three months.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, is a key bellwether for the outlook of the nation’s economy.
The measure of consumer confidence arrived hours after Trump moved to fire Federal Reserve Governor Lisa Cook, alleging that she had committed mortgage fraud.
In a statement to ABC News, Cook said Trump “has no authority” to fire her. Cook said she would not resign, instead vowing to “continue to carry out my duties to help the American economy.”
The Fed is an independent agency established by Congress. Federal law allows the president to remove a member of the Fed board for “cause” — though no precedent exists for such an ouster.
Some recent indicators have suggested the onset of an economic slowdown. A report on gross domestic product late last month indicated average annualized growth of 1.2% over the first half of 2025, well below 2.5% growth last year.
A jobs report released by the U.S. Bureau of Labor Statistics on Aug. 1 revealed a sharp cooldown of the labor market.
Still, some facets of the economy have proven resilient. The overall inflation rate stands at 2.7%, below the 3% rate in January, before Trump took office.
The U.S. has largely averted the type of widespread job losses that often accompany a recession. Consumer spending ticked higher over the three months ending in June. Corporate earnings have remained robust.
Federal Reserve Chair Jerome Powell last week said the central bank faces a “challenging situation” as a hiring slowdown coincides with tariff-driven price increases, putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.
Powell said the Fed would “proceed carefully” but he hinted at the possibility of an interest rate cut, saying “the shifting balance of risks may warrant adjusting our policy stance.”
