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The U.S. labor market probably started 2025 the way it spent most of last year: generating decent, but unspectacular, job growth.When the Labor Department releases January employment numbers Friday, they’re likely to show that companies, government agencies, and nonprofits added 170,000 jobs last month, according to a survey of economists by the data firm FactSet. That would be a respectable performance but also a downshift from 2024, which averaged 186,000 new jobs a month, including a surge of 256,000 in December. The unemployment rate is expected to remain low at 4.1%.The first monthly jobs report of Donald Trump’s second presidency is likely to confirm that he inherited a solid economy, one in which consumers enjoy job security and rising wages that give them the confidence and financial wherewithal to spend freely.“The economy is kicking off 2025 in good shape,” said Bill Adams, chief economist at Comerica Bank.The future is cloudier.A federal judge on Thursday temporarily blocked President Donald Trump’s plan to push out federal workers by offering them financial incentives, yet a federal hiring freeze that Trump imposed January 20 is a “negative for employment growth,” Bradley Saunders, an economist at Capital Economics, wrote in a commentary last week. The freeze came after the Labor Department collected the January jobs numbers, so any impact would be revealed in upcoming employment data.Likewise, a cold snap that probably increased seasonal layoffs in the Midwest and Northeast occurred late in January and won’t register in government jobs data until the February numbers come out, Saunders wrote.Economists are also worried about Trump’s threat to wage a trade war against other countries. He’s already imposed a 10% tax on imports from China.Canada and MexicoAmerica’s two largest trading partnersremain in his crosshairs, though he gave them a 30-day reprieve from the 25% tariffs he was planning to sock them with on Tuesday, allowing time for negotiations. Trump says that America’s two neighbors and allies haven’t done enough to stem the flow of undocumented immigrants and fentanyl into the United States. Trump is also itching to slap tariffs on the European Union; pointing to America’s deficit in the trade of goods with the EU, which came to $236 billion last year, he says that Europe treats U.S. exporters unfairly.The tariffs, which are paid by U.S. importers who generally try to pass along the cost to customers, could rekindle inflationwhich has fallen from the four-decade high it reached in mid-2022 but is still stuck above the Fed’s 2% target. If the tariffs push prices higher, the Fed may cancel or postpone the two interest-rate cuts it had forecast for this year. And that would be bad for economic growth and job creation.The job market has already cooled from the red-hot days of 20212023. American payrolls increased by 2.2 million last year, down from 3 million in 2023, 4.5 million in 2022, and a record 7.2 million in 2021 as the economy roared back from COVID-19 lockdowns. The Labor Department also reports that employers are posting fewer jobs. Monthly job openings have tumbled from a record 12.2 million in March 2022, to 7.6 million in Decemberstill a decent number by historical standards.As the labor market cools, American workers are losing confidence in their ability to find better pay or working conditions by changing jobs. The number of people quitting has fallen from a record 4.5 million near the height of the hiring boom in April 2022, to December’s 3.2 million, which is below pre-pandemic levels.Still, layoffs remain below pre-pandemic levels, creating an unusual situation: If you are employed, you probably enjoy job security. If you’re looking for one, things have gotten tougher.The Labor Department is also expected to report annually released revisions Friday that will show job creation from April 2023 through March 2024 wasn’t as strong as originally reported.A preliminary version of the revisions, released in August, showed that 818,000 fewer jobs were created over those 12 monthslowering average monthly hiring during that span from 242,000 to 174,000. Because they are not final, the August estimates have not yet been added to the official government payroll numbers. The revisions out Friday will become official and part of the historic data. Paul Wiseman, AP Economics Writer
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E-Commerce
OpenAI is scouring the U.S. for sites to build a network of huge data centers to power its artificial intelligence technology, expanding beyond a flagship Texas location and looking across 16 states to accelerate the Stargate project championed by President Donald Trump.The maker of ChatGPT put out a request for proposals for land, electricity, engineers and architects and began visiting locations in Oregon, Pennsylvania, and Wisconsin this week.Trump touted Stargate, a newly formed joint venture between OpenAI, Oracle and Softbank, shortly after returning to the White House last month.The partnership said it is investing $100 billionand eventually up to $500 billionto build large-scale data centers and the energy generation needed to further AI development. Trump called the project a “resounding declaration of confidence in America’s potential” under his new administration, though the first project in Abilene, Texas, has been under construction for months.Elon Musk, a Trump adviser and fierce rival of OpenAI who is in a legal fight with the company and its CEO Sam Altman, has publicly questioned the value of Stargate’s investments.After Trump’s announcement, a number of states reached out to OpenAI about welcoming additional data centers, Chris Lehane, OpenAI’s vice president of global affairs, told reporters Thursday.The company’s request for proposals calls for sites with “proximity to necessary infrastructure including power and water.”AI uses vast amounts of energy, much of which comes from burning fossil fuels, which causes climate change. Data centers also typically draw in large amounts of water for cooling. Some tech giants have started financing nuclear power to plug into their data centers.OpenAI’s proposal makes no mention of whether it intends to prioritize renewable energy sources such as wind or solar to power the data centers. But it says electricity providers should have a plan to manage carbon emissions and water usage.“There’s some sites we’re looking at where we want to help be part of the process that brings new power to that site, either from new gas deployment or other means,” said Keith Heyde, who directs OpenAI’s infrastructure strategy.The first Texas project is in a region Abilene Mayor Weldon Hurt has described to The Associated Press as rich in multiple energy sources, including wind, solar and gas. Also describing it that way is the company that began building the AI data center campus there in Junethe same two “big, beautiful buildings” that Altman showed off in a recent drone video posted on social media.Crusoe CEO Chase Lochmiller said that wind power is central to the project his company is building, though it will also have a gas-fired generator for backup power.“We try to build data centers in locations where we can access low-cost, clean and abundant energy resources,” Lochmiller said. “West Texas really fits that mold where it’s one of the most consistently windy and sunny places in the United States.”Lochmiller said he expects the Trump administration, despite the president’s opposition to wind farms, to be pragmatic in supporting wind-powered data centers when it is “actually the cheapest way to access energy.”Data centers consumed about 4.4% of all U.S. electricity in 2023 and that’s expected to increase to 6.7% to 12% of total U.S. electricity by 2028, according to the Lawrence Berkeley National Laboratory.The other states where OpenAI is actively looking include Arizona, California, Florida, Louisiana, Maryland, Nevada, New York, Ohio, Utah, Virginia, Washington, and West Virginia. Heyde said the company only plans to build “somewhere between five to 10” campuses in total, depending on how large each one is.OpenAI previously relied on business partner Microsoft for its computing needs. But the two companies recently amended their partnership to enable OpenAI to pursue data center development on its own.-Associated Press writer Jamey Keaten contributed to this report.-The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives. Matt O’Brien, AP Technology Writer
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E-Commerce
Volkswagen-backed Scout Motors is making a massive bet in the electric SUV market with a carefully cultivated experience that will allow some customers to buy the company’s vehicle in minutes on an app and then use it to handle everything after from repairs to updates and upgrades.But without some help from lawmakers, that will be impossible in South Carolina, where the company is pouring billions into its new auto plant and a Scout Motors experience like BMW’s test track in Greer.In a world where almost everything can be bought online, automobiles remain an exception. Supporters of the dealership model say the experience allows buyers to compare prices across several businesses.Unlike a pair of pants, where color, style and size are about the only concerns, buying a car involves financing, state registration, taxes, regulationsand often a test drive.South Carolina is one of about two dozen states that ban manufacturers from selling vehicles directly to consumers and instead require all new autos be purchased through a dealer. Scout would like to see that practice changed nationwide for all EV makers and figured it could start in its new backyard.South Carolina also bans manufacturers from owning their own service centers, which means anyone who wants to own a Scout SUV must travel to another state to have it repaired or serviced.People who back the dealership structure said online sales could lead to carmakers raising their own prices with less competition.The dealership structure requires local business owners to back what they sell and assure buyers get quality service on their vehicles. Auto dealers often have close ties to their communities and cities could lose one of their biggest businesses and heftiest taxpayers.“If for some reason the car is a lemon or the job isn’t getting done, they are the folks who live there, who pay their taxes and send their kids to school,” said Republican Sen. Larry Grooms, who runs the Senate Transportation Committee where any bill changing the rules would likely end up.Scout is determined to get the law changed to help them as well as other EV makers like Tesla and Rivian. They have gone on a media blitz that includes stories in local outlets. They are also trying to secure support in a Republican-dominated state with an argument that consumers should be free to buy whatever they wish directly, without a middleman.Scout also is armed with a 2000 Attorney General’s Office opinion on the bill which would weeks later would become law and serve as the most recent major overhaul to South Carolina’s laws on new car buying.“If a manufacturer cannot sell his own product, but must constitutionally pass that product through a ‘middle man,’ then our understanding of the free market system is way off base. The Internet is a worldwide web for trade, not a local instrument for protectionism,” wrote then-Republican state Attorney General Charlie Condon in the opinion, which is not binding and an educated guess on what a judge might do if someone sued over the law.Scout officials say using a dealership-only business model would make the vehicles aimed at the under-$60,000 market too expensive and complicate what the company wants to be a seamless experience, from start to finish.Gov. Henry McMaster touts the Scout plant in Blythewood as one of his biggest economic development scores The Republican has been to both the February 2024 groundbreaking of the massive facility and this month’s ceremony to mark work starting on a new $150 million interstate interchange the state is paying for to help get workers, parts and new SUVs in and out.McMaster recently said he wants to protect dealers, but wants to let Scout sell directly, too.“Over the last few years with the Internet and Amazon and all the others customers are looking for their freedom and that ability to order things direct without a middleman,” McMaster said.Scout is trying to find a niche in a growing but uncertain U.S. electric vehicle market. President Donald Trump’s election could threaten the industry, both through ending tax credits and tariffs that could raise prices.The original Scout Motors made gasoline-powered vehicles for about 20 years when it was owned by International Harvester. Production ended in 1980, but their shape and features continue to influence modern SUVs. Scouts have had a niche fanbase of collectors ever since.The new Scout Motors is trying to tap into a mix of nostalgia and technology. Key to Scout’s success will be its app, Scout Vice President of Growth Cody Thacker said.He envisions a Scout buyer scrolling through types and colors, performance and comfort options and hundreds of other choices. Financing, titling, and paperwork would all be handled in minutes instead of the hours it takes at dealerships. That custom SUV could then be delivered to the buyer’s door.“You see the point of contention and the huge opportunity,” Thacker said.Scout’s plant in Blythewood, about 20 miles (32 kilometers) north of Columbia, is expected to open in 2027 and employ up to 4,000 people if the company can hit its goal of making and selling 200,000 vehicles per year.Scout also wants to build by its plant a center where people could test drive vehicles on a company-owned track and take tours. For it to work, the company wants to be able to sell someone a vehicle after they zoom around the site, Thacker said.South Carolina agreed in 2023 to give Scout more than $1 billion in incentives to land the plant. At the time, the dealership law wasn’t on their radar. It came up as executives started looking at their business model, Thacker said.The company doesn’t regret choosing South Carolina and still believes it gave them the best workforce, economic climate and infrastructure. And it will move forward if the law isn’t changed selling its vehicles through other states where it can get national licenses sending the money and tax benefits out of the state, Thacker said. Jeffrey Collins, Associated Press
Category:
E-Commerce
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