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Warner Bros. Discovery to split into two companies, dividing cable and streaming services

SUMMARY:

  • will split into two separate companies.
  • Streaming & Studios will include HBO, Max, and Warner Bros. films.
  • Global Networks will handle , TNT Sports, Discovery, and more.
  • The move follows industry losses from years of cord-cutting.

NEW YORK (AP) — Warner Bros. Discovery will calve off cable operations from its streaming service, creating two independent companies as the number of people “cutting the cord” brings with it a sustained upheaval in the entertainment industry.

HBO, and , as well as Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, will become part of the streaming and studios company, Warner Bros. said Monday.

The cable company will include CNN, TNT Sports in the U.S., and Discovery, top free-to-air channels across Europe, and digital products such as the Discovery+ streaming service and Bleacher Report.

Shares jumped 11% at the opening bell.

Warner Bros. Discovery CEO will become serve as CEO of the company that for right now is called Streaming & Studios. Gunnar Wiedenfels, chief financial officer of Warner Bros. Discovery, will be CEO of the cable-focused entity, for now known as Global Networks.

“By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav said in a statement.

Just days ago Warner Bros. Discovery shareholders in a vote that was symbolic as it’s nonbinding, rejected the 2024 pay packages of some executives, including Zaslav, who will make more than $51 million.

Warner Bros. Discovery said in December that it was implementing a plan in which Warner Bros. Discovery would become the parent company for two operating divisions, Global Linear Networks and Streaming & Studios. That was seen as a preview of the separation announced Monday.

Warner Bros. Discovery was created just three years ago when AT&T spun off WarnerMedia and it was merged with Discovery Communications in a $43 billion deal.

The cable industry has been under assault for years from like Disney, Netflix, Amazon and Warner Bros. own HBO Max. The industry is also being pressured by internet plans offered by mobile phone companies. Comcast, which is of nearly equal size to Charter, spun off many of its cable television networks in November, seeing so many customers swap out their cable TV subscriptions for streaming platforms.

Last month Charter Communications offered to acquire Cox Communications, a $34.5 billion merger that would combine two of the top three cable companies in the U.S.

So-called “” has cost the industry millions of customers and left them searching for ways to successfully compete.

The Warner Bros. Discovery split is expected to be completed by the middle of next year. It still needs final approval from the Warner Bros. Discovery board.

Navy, Dominion sign power agreement for Naval Weapons Station Yorktown

Leaders from the Naval Weapons Station Yorktown, which provides weapons and munitions support for the U.S. Navy, and signed an agreement Friday to explore the construction of a “reliable, resilient and responsible” energy source at the base.

The power generated would serve the installation and the surrounding community, according to a spokesperson for the Naval Weapons Station Yorktown. The types of energy sources that could be considered run the gamut from solar facilities to a natural gas power plant to a small modular nuclear reactor, according to a news release received Sunday from the weapons station.

Ed Baine, president of Dominion Energy Virginia, stated Friday that the company will look at sites on or near Navy property for a new power generation asset to maximize land use and infrastructure, the news release stated.

“The men and women of our armed forces have never let this country down, and Dominion … will never let them down,” Baine said at the signing, according to the release. “Together we will build a stronger, more resilient future.”

Last year, Dominion Energy signed a similar agreement with Fort Gregg-Adams, a U.S. Army garrison located near Petersburg. A spokesperson for Dominion Energy did not immediately respond to a request for comment.

The Virginia Department of Energy announced in October that four of seven locations being considered by the Navy for potential shore-based sites are in Virginia. Those sites under consideration are: Naval Air Station Oceana, Naval Support Activity South Potomac, Naval Weapons Station Yorktown and Marine Corps Base Quantico.

Last week, the Board of Supervisors approved a resolution to study possible amendments to its code regarding small modular nuclear reactors. Currently, there are no land use regulations for those facilities.

In October, Amazon.com and Dominion Energy Virginia entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Station in Louisa County.

Naval Weapons Station Yorktown is the largest employer in York County. More than 2,400 active duty service members, 1,100 U.S. Department of Defense civilian employees and 530 contractors work at the base, according to the spokesperson. 

 

Molina Healthcare to close Henrico office, laying off 268 workers

Molina , a Fortune 500 company that manages services for and Medicare recipients, is closing its office and laying off 268 workers, it said in a letter notifying the state.

According to the Virginia Works website’s WARN notice page, California-based Molina notified the state May 13 that it will close its facility at 3829 Gaskins Road on June 30 and that all of its staffers there will be laid off as of July 14. The company provides managed health care services under Medicaid and Medicare programs and through state marketplaces, and in Virginia, Molina is one of five managed care organizations (), health plans that include providers that accept Medicaid.

After June 30, will no longer be one of Virginia Medicaid’s MCOs, according to the state Department of Medical Assistance Services. In a memo sent May 29, DMAS’ director noted that the state’s new managed care contract starting July 1 will include existing plans associated with Aetna, Anthem, Sentara and UnitedHealthCare, as well a new plan from Humana. Molina enrollees will be switched to the Humana plan, according to the memo, and will have a 90-day window to change plans if they wish.

The Henrico office’s closing is due to the non-renewal of Molina’s contract with the state, the company’s letter to Virginia Works states. Among the affected employees are care managers, medical directors, analysts, community engagement workers and others. Employees were notified of the office’s May 14, according to the letter.

has been a major topic of conversation on Capitol Hill, as President Donald ‘s “One Big Beautiful Bill” budget reconciliation bill, which has passed the U.S. House of Representatives and is under negotiation in the U.S. Senate, would restructure Medicaid and the health insurance marketplaces, leading to 16 million people nationwide losing their health insurance, according to a nonpartisan Congressional Budget Office report issued last week.

According to U.S. Sens. Mark Warner and Tim Kaine, citing the Joint Economic Committee’s May findings, 262,440 Virginians stand to lose health care coverage under the budget bill, including 161,614 Medicaid recipients.

Molina Healthcare referred to the DMAS memo when contacted Monday for comment.

NASA Langley could lose 672 jobs under Trump’s proposed budget

SUMMARY:
• White House’s proposed FY 2026 budget cuts funding by $6 billion
• 672 jobs could be eliminated at in
• NASA may mothball five of its 12 national wind tunnels
• NASA Langley oversees seven wind tunnels

‘s proposed fiscal year 2026 budget would put 672 civil servants at NASA Langley Research Center in Hampton out of work.

If approved by Congress, the White House’s suggested budget would cut the civilian workforce by about 32% across the entire agency, according to a technical supplement released last week.

The president’s suggested budget would cut NASA’s funding from $24.8 billion to $18.8 billion, a roughly 25% decrease. It would be NASA’s smallest budget since FY 1961, according to The Planetary Society, a California-based space advocacy organization.

For FY 2025, NASA Langley has a civilian workforce that’s estimated to be 1,730 employees. The proposed budget would dial that back to 1,058 workers in FY 2026, according to the technical document. Brittny McGraw, a spokesperson for Langley, said Langley does not have information to share outside of budget documents.

If the budget is approved, NASA’s centers, like NASA Langley, will “explore cross-mission retraining opportunities for employees whenever possible, offer targeted buyouts in selected surplus skill areas, and continue to identify, recruit and retain a multi-generational workforce of employees who possess skills critical to the agency,” the document stated.

Additionally, the administration’s proposal aims to take the ax to 41 NASA science projects, according to The Planetary Society, which also noted that cut would equal one-third of NASA’s science portfolio.

, Virginia’s senior Democratic senator, called the cuts “dreadful news” during a Wednesday media call.  “Cutting research, cutting that kind of innovation, is not only bad for Hampton Roads, but is also, candidly, bad for Americans’ competitiveness,” he said.

, D-Newport News, agreed.

“NASA provides invaluable research and resources to explore the planets in our solar system and help us better understand our oceans, weather and climate,” he said in a statement. “And much of this work is being done in Hampton Roads at NASA Langley. The cuts to NASA’s funding and staff proposed by the Trump administration will put the United States behind in our pursuit to advance science and protect our communities from threats like climate change and sea level rise.”

Additionally, the technical document noted NASA Langley will replace its 84-year-old vertical spin tunnel with a new flight dynamics research facility in 2026. In 2022, Langley held a groundbreaking event for what was then a $43 million project.

NASA Langley currently manages seven wind tunnels, located in Hampton, within NASA’s Aerosciences Evaluation and Test Capabilities (AETC) portfolio. Of NASA’s 12 wind tunnels, the proposed budget if passed would put five tunnels into stand-by mode, meaning they would receive minimal maintenance and workforce resources. The locations of the tunnels are not specified in the document.

promised to fight the suggested NASA cuts tooth and nail.

“Why would you hobble NASA programs unless you are trying to advantage Russian and Chinese space programs?” he said in a statement. “These proposed cuts, if the House and Senate pass them, would destroy NASA as we know it, and have a devastating impact on the region’s community and .”

During his call with journalists, Warner noted the job cuts at NASA Langley come following news that Jefferson Science Associates are operating on a temporary contract to manage and operate the in Newport News. Their contract was set to expire in May. However, in March, U.S. Energy Secretary Chris Wright approved a 12-month extension. Officially known as The Thomas Jefferson National Accelerator Facility, the Jefferson Lab is a nuclear physics research facility.

“You’ve got the attack at NASA Langley, you’ve got at least a pause of what’s happening at Jeff Labs,”  Warner said. “That is a double whammy for a community that has already experienced other cuts, some of them cuts that are kind of across the board from the DOGE efforts,” he said.  “Remember, Hampton Roads, next to Northern Virginia, has the highest number of both federal employees and government contractors of virtually any place in the country. And this is bad policy. It’s bad for innovation. And it could be a disaster for Hampton Roads.”

The U.S. space program was housed at Langley from 1958 to 1963 until the Johnson Space Center in Houston opened in 1963. In the 1970s, Langley was in charge of the Viking lander missions, which transmitted the first photos and chemical data taken from the surface of the Red Planet.

Kings Dominion has new manager after Six Flags layoffs

SUMMARY:

Kings Dominion has a new head amid a wave of by parent company Six Flags Entertainment.

Jennifer Schofield started as park manager and vice president of in-park revenue for the on May 31, according to Sydney Snow, regional manager of public relations for Kings Dominion and Six Flags New England.

The park’s former head was Bridgette C. Bywater, who had the title vice president and general manager of Kings Dominion. Bywater assumed leadership of the park in January 2021, when former VP and GM Tony Johnson retired. She worked at Cedar Fair Entertainment, the park’s former parent, for 24 years before she came to .

Six Flags and Cedar Entertainment completed an $8 billion merger in July 2024. The combined company bills itself as North America’s largest regional amusement-resort operator. It has 27 amusement parks, 15 water parks and nine resort properties across the United States, Canada and Mexico.

Six Flags President and CEO Richard Zimmerman announced a cost reduction plan that included a workforce reduction in the company’s first quarter earnings call.

“As part of our cost reduction plan,” Zimmerman said on the call, “we are engaged in a corporate restructuring process designed to flatten our organizational structure, streamline decision-making and drive cost efficiencies. … Once this initiative is completed, we will have reduced our full-time headcount by more than 10%.”

The company reported $202 million in net revenues in the first quarter, of which $111 million related to the legacy Six Flags operations added in the merger. It had a net loss of $220 million in the first quarter, which included $134 million of net loss from legacy Six Flags operations added in the merger.

Nevertheless, the company expects to reach $120 million in merger cost synergies by the end of the year, six months earlier than previously expected, according to Zimmerman. Six Flags expects its reorganization plan to deliver an additional $60 million in cost savings.

“Our operating plan anticipated some consumer caution given heightened macroeconomic uncertainty,
Zimmerman said in a statement. “Accordingly, we have been taking proactive steps to mitigate these impacts — including refinements to our operating calendars, targeted cost reductions and more aggressive yield management on tickets and in-park products.”

On the earnings call, Zimmerman said the company’s strategy for 2025 included minimizing lower-value operating days, particularly in the first and fourth quarters, and maximizing operating days in the second and third quarters.

A few days prior to the earnings call, on May 1, Six Flags announced it would close Six Flags America and Hurricane Harbor in Bowie, Maryland, after the 2025 operating season.

“The vice president and general manager position at Kings Dominion was eliminated, along with the general manager and park president positions at all Six Flags Entertainment Corp. parks” as part of the workforce reduction effort, Bywater said in a statement to Virginia Business.

“I was offered the opportunity to continue my employment in a different role but declined,” Bywater said. “I wish nothing but success for the company and look forward to joining the Kings Dominion season passholder community.”

Kristin Fitzgerald, corporate director of public relations for Six Flags, said in a statement: “Six Flags Entertainment recently moved to a new regional operating structure,” which included centralizing corporate functions and making “some changes to the roles and responsibilities of park leaders, sharpening the parks’ focus on execution, the guest experience and associates.

“Some park general managers and presidents had an opportunity to move into different roles, while others left the company to pursue other opportunities or retire. These and other changes underway have created new opportunities for the next generation of leaders within the company,” she continued.

Schofield has 34 years of experience in the industry, according to Fitzgerald.

Schofield was most recently vice president of retail at Cedar Point Amusement Park in Ohio, according to her LinkedIn profile. Before that, she was director of merchandise and games at Kings Dominion. Schofield previously served as director of merchandise and games for Worlds of Fun in Missouri, and prior to that, as merchandise manager at Carowinds, which straddles the state line between the Carolinas.

2025 marks Kings Dominion’s 50th anniversary. In January, the park announced a lineup of events to celebrate the milestone, including new live shows and a street party. “A Golden Summerbration” is running from late May to early August.

Kings Dominion is not holding its annual December-long WinterFest season. The theme park did not include the season in its 50th anniversary events list, released in January.

AESC halts $1.6B EV battery plant over policy fears

SUMMARY:

  • paused construction on $1.6B EV battery factory
  • Plant was planned to supply batteries for electric BMWs
  • Gov. McMaster cites federal EV incentive and tariff issues
  • Project promised 1,600 jobs in Florence, S.C.
  • Company pledges to restart, but gives no timeline

COLUMBIA, S.C. (AP) — A Japanese company has halted construction on a $1.6 billion factory in to help make batteries for electric BMWs, citing “policy and market uncertainty.”

While Automotive Energy Supply Corp. didn’t specify what those problems are, South Carolina’s Republican governor said the company is dealing with the potential loss of federal tax breaks for electric vehicle buyers and incentives for EV businesses as well as tariff uncertainties from President Donald ‘s administration.

“What we’re doing is urging caution — let things play out because all of the these changes are taking place,” Gov. Henry McMaster said.

AESC announced the suspension in construction of its plant in Florence on Thursday,

“Due to policy and market uncertainty, we are pausing construction at our South Carolina facility at this time,” the company’s statement said.

AESC promised to restart construction, although it didn’t say when, and vowed to meet its commitment to hire 1,600 workers and invest $1.6 billion. The company said it has already invested $1 billion in the Florence plant.

The battery maker based in Japan also has facilities in China, the United Kingdom, France, Spain and Germany. In the U.S., AESC has a plant in Tennessee and is building one in Kentucky. The statement didn’t mention any changes with other plants.

The South Carolina plant is supposed to sell battery cells to , which is building its own battery assembly site near its giant auto plant in Greer. BMW said the construction pause by AESC doesn’t change its plans to open its plant in 2026.

AESC has already rolled back its South Carolina plans. They announced a second factory on the Florence site, but then said earlier this year that their first plant should be able to handle BMW’s demand. That prompted South Carolina officials to withdraw $111 million in help they planned to provide.

The company is still getting $135 million in grants from the South Carolina Department of Commerce and $121 million in bonds and the agency said a construction pause won’t prompt them to claw back that offer.

South Carolina is investing heavily in . Volkswagen-owned Scout Motors plans to invest $2 billion and hire 4,000 people for a plant to build its new electric SUVs scheduled to open in 2027.

The state has for decades made big bets on foreign manufacturers like BMW, Michelin and Samsung that have paid off with an economic boom this century, but there is uneasiness that Trump’s flirtation with high might stagger or even ruin those important partnerships.

McMaster told people to relax as state and business leaders are talking to Trump’s administration and things will work out.

“I think the goal of the president and the administration is to have robust economic growth and prosperity and there is no doubt there has to be changes made in our international trade posture and President Trump is addressing that,” McMaster told reporters Thursday.

Elon Musk pulls back on threat to withdraw Dragon spacecraft

SUMMARY:

  • Musk initially threatened to retire ‘s
  • Clash with sparked concern over federal contracts
  • Dragon is ‘s only current U.S. to
  • Musk later reversed course, saying capsule will remain
  • Unclear how serious the initial threat was

As and argued on social media on Thursday, the world’s richest man threatened to decommission a space capsule used to take astronauts and supplies to the International Space Station.

A few hours later, Musk said he wouldn’t follow through on the threat.

After Trump threatened to cut given to Musk’s SpaceX rocket company and his Starlink internet satellite services, Musk responded via X that SpaceX “will begin decommissioning its Dragon spacecraft immediately.”

It was unclear how serious Musk’s threat was, but several hours later — in a reply to another X user — he said he wouldn’t do it.

The capsule, developed with the help of government contracts, is an important part of keeping the space station running. NASA also relies heavily on SpaceX for other programs including launching science missions and, later this decade, returning astronauts to the surface of the moon.

The Dragon capsule
SpaceX is the only U.S. company capable right now of transporting crews to and from the space station, using its four-person Dragon capsules.

Boeing’s Starliner capsule has flown astronauts only once; last year’s test flight went so badly that the two NASA astronauts had to hitch a ride back to Earth via SpaceX in March, more than nine months after launching last June.

Starliner remains grounded as NASA decides whether to go with another test flight with cargo, rather than a crew.

SpaceX also uses a Dragon capsule for its own privately run missions. The next one of those is due to fly next week on a trip chartered by Axiom Space, a Houston company.

Cargo versions of the Dragon capsule are also used to ferry food and other supplies to the orbiting lab.

NASA’s other option: Russia
Russia’s Soyuz capsules are the only other means of getting crews to the space station right now.

The Soyuz capsules hold three people at a time. For now, each Soyuz launch carries two Russians and one NASA astronaut, and each SpaceX launch has one Russian on board under a barter system. That way, in an emergency requiring a capsule to return, there is always someone from the U.S. and Russia on board.

With its first crew launch for NASA in 2020 — the first orbital flight of a crew by a private company — SpaceX enabled NASA to reduce its reliance on Russia for crew transport. The Russian flights had been costing the U.S. tens of millions of dollars per seat, for years.

NASA has also used Russian spacecraft for cargo, along with U.S. contractor Northrup Grumman.

SpaceX’s other government launches
The company has used its rockets to launch several science missions for NASA as well as military equipment.

Last year, SpaceX also won a NASA contract to help bring the space station out of orbit when it is no longer usable.

SpaceX’s Starship mega rocket is what NASA has picked to get astronauts from lunar orbit to the surface of the moon, at least for the first two landing missions. Starship made its ninth test flight last week from Texas, but tumbled out of control and broke apart.

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.

Wall Street gains ground following a solid jobs report

SUMMARY:

  • rose 0.9%, Dow added 344 points
  • climbed 1.2% after solid jobs report
  • U.S. added 139,000 jobs despite trade tensions
  • Lululemon dropped after cutting profit forecast
  • 10-year Treasury yield increased to 4.49%

NEW YORK (AP) — Stocks rose on Wall Street Friday following a better-than-expected report on the U.S. job market.

The S&P 500 index rose 0.9% in afternoon trading. The benchmark index remains on track to notch a second consecutive winning week.

The Industrial Average added 344 points, or 0.8% as of 1:22 p.m. Eastern. The Nasdaq composite rose 1.2%

The gains were broad, with nearly every sector in the benchmark S&P 500 rising. Technology stocks, with their outsized values, gave the market its biggest boost. Chipmaker Nvidia jumped 1.6% and iPhone maker Apple rose 1.4%.

Tesla rose 5.5%, regaining some the big losses it suffered on Thursday when Trump and Musk sparred feverishly on social media.

Circle Internet Group, the U.S.-based issuer of one of the most popular cryptocurrencies, rose 43%. That adds to its 38.7% gain from Thursday when it debuted on the New York Stock Exchange at $60 per share.

U.S. employers slowed their hiring last month, but still added a solid 139,000 jobs amid uncertainty over ‘s . The closely-watched monthly update reaffirmed that the job market remains resilient, despite worries from businesses and consumers about the impact of on goods going to and coming from the U.S. and its most important trading partners.

“It looks like, for now, everything is kind of running smoothly,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management. “Investors see that as a positive, but we also haven’t seen the full effect of tariffs yet.”

President Donald Trump’s on-again-off-again tariffs continue to weigh on companies. Lululemon Athletica plunged 20.2% after the maker of yoga clothing cut its profit expectations late Thursday as it tries to offset the impact of tariffs while being buffeted by competition from start-up brands.

Lululemon joins a wide range of companies, from retailers to airlines, who have warned investors about the potential hit to their revenue and profits because of tariffs raising costs and consumers potentially tightening their spending.

Hopes that Trump will lower his tariffs after reaching trade deals with other countries have been among the main reasons the S&P 500 has rallied back so furiously since dropping roughly 20% from its record two months ago. It’s now back within 2.5% of its all-time high.

The is already absorbing the impact from tariffs on a wide range of goods from key trading partners, along with raw materials such as steel. Heavier tariffs could hit businesses and consumers in the coming months.

The U.S. economy contracted during the first quarter. Recent surveys by the Institute for Supply Management, a trade group of purchasing managers, found that both American and services businesses contracted last month. On Tuesday, the Organization for Economic Cooperation and Development forecast 1.6% growth for the U.S. economy this year, down from 2.8% last year.

The uncertainty over tariffs and their economic impact has put the in a delicate position.

“All things being equal, you can clearly see they are on hold,” Zaccarelli said.

The central bank is holding its benchmark interest rate steady as it worries about tariffs reigniting inflation. It fought hard, using interest rate increases, to ease inflation rates back toward its target of 2% and rates have been hovering just above that level.

The Fed has been hesitant to cut interest rates in 2025 after trimming rates three times late last year. While lower interest rates can give the economy a boost, they can also push inflation higher. That could be especially damaging if import taxes are also raising costs for businesses and consumers.

Wall Street expects the central bank to hold rates steady at its June meeting, but traders are forecasting that it will have to cut interest rates later this year in an effort to prop up the economy.

In the bond market, made significant gains. The yield on the 10-year Treasury rose to 4.49% from 4.39% late Thursday. The two-year Treasury yield, which more closely tracks traders’ expectations for what the Federal Reserve will do with overnight interest rates, rose to 4.04% from 3.92% late Thursday.

Markets in Asia were mixed and markets in Europe were were mostly higher.

U.S. adds 139K jobs amid trade war uncertainty


SUMMARY:

  • U.S. added 139,000 jobs, down from 147,000 in April
  • held steady at 4.2%
  • fears weigh on hiring and economic outlook
  • No clear recession signals in current

WASHINGTON (AP) — U.S. employers slowed hiring last month, but still added a solid 139,000 jobs amid uncertainty over President Donald ‘s trade wars.

Hiring fell from a revised 147,000 in April, the Department of Labor said Friday. The job gains last month were above the 130,000 that economists had forecast.

companies added 62,000 jobs and bars and restaurants 30,000. The shed 22,000 jobs, however, the most since November 2020, as Trump’s job cuts and hiring freeze had an impact. And factories lost 8,000 jobs last month.

Average hourly wages rose 0.4% from April and 3.9% from a year earlier – a bit higher than forecast.

There were a few signs of potential weakening. Labor Department revisions shaved 95,000 jobs from March and April payrolls. The number of people in the U.S. labor force – those working or looking for work – fell by 625,000 last month, biggest drop since December 2023. And the percentage of those who had jobs fell last month to 59.7%, lowest since January 2022.

Trump’s aggressive and unpredictable policies – especially his sweeping taxes on imports – have muddied the outlook for the and the job market and raised fears that the American economy could be headed toward recession. But so far the damage hasn’t shown up clearly in government economic data.

“The job market is still standing tall even as some of these headwinds start to blow,” said Daniel Zhao, lead economist at the jobs website Glassdoor. “But ultimately we’re all still waiting for the other shoe to drop. It’s still much too early for tariff impacts to be a significant drag on the economy.”

The U.S. economy and job market have proven surprisingly resilient in recent years. When the inflation fighters at the Federal Reserve raised their benchmark interest rate 11 times in 2022 and 2023, the higher borrowing costs were widely expected to tip the United States into a recession. They didn’t.

Still, the job market has clearly decelerated. So far this year, American employers have added an average of less than 124,000 a month. That is down 26% from last year, down almost 43% from 2023, and a down whopping 67% compared with 2022.

The modest job gains and steady unemployment rate are likely to keep the Fed on the sidelines for at least the next few months, economists said. The central bank Fed has kept its key short-term interest rate unchanged this year, after cutting it three times last year.

Fed chair Jerome Powell and most other Fed policymakers have voiced concern that Trump’s could push up inflation later this year, which they would seek to counter by raising rates. The Fed is only likely to accelerate interest rate cuts if the job market sharply deteriorates. But so far hiring is holding up.

Investors still expect just two cuts by the Fed this year, starting in September. Jim Lebenthal, chief equity strategist at Cerity Partners, said the central bank will likely stay on hold as it waits to see whether the sweeping tariffs that Trump imposed April 2, then delayed until July 9, return in some form. Those duties are also being challenged in court.

“They need to see the effects of the tariffs before they make any moves,” Lebenthal said.

Recent economic reports have sent mixed signals.

The Labor Department reported Tuesday that U.S. job openings rose unexpectedly to 7.4 million in April — seemingly a good sign. But the same report showed that ticked up and the number of Americans quitting their jobs fell, a sign they were less confident they could find something better elsewhere.

Surveys by the Institute for Supply Management, a trade group of purchasing managers, found that both American and services businesses were contracting last month.

And the number of Americans applying for unemployment benefits rose last week to the highest level in eight months, though jobless claims remain low by historical standards.

The job market has clearly decelerated. So far this year, American employers have added an average of less than 124,000 a month. That is down 26% from last year, down almost 43% from 2023, and a down whopping 67% compared with 2022.

Trump’s tariffs — and the erratic way he rolls them out, suspends them and conjures up new ones — have already buffeted the economy.

“Employers have been hoarding labor in the face of massive corrosive uncertainty,” said Carl Weinberg, chief economist at High Frequency Economics. “We believe firms have been reluctant to lay off workers until they saw the extent of the Trump tariffs. Now that the tariffs are out in the open, we believe most firms see the writing on the wall and will start workforce reductions right now.”

Steel Horse Leather is a Brooklyn company that makes handmade leather bags imports some of its material and production from China.

Owner Dave Heaton says rapidly evolving tariff rules have made it difficult to manage the business day to day – let alone build on his staff of four. “With the current volatility, hiring really isn’t something at the top of our list, unfortunately,” he said.

Heaton’s company has also begun to supplement sea freight with air shipments to secure products in time for the fall and holiday seasons. He’s raised prices 10% to 15% on some products to cover higher shipping fees and some of the tariffs, the first price hikes in in three years.

“The real challenge is the uncertainty,” Heaton said. “It’s not just about the price hikes — it’s that we can’t plan ahead like we used to.”

Fed’s Fifth District expands slightly amid uncertainty

SUMMARY:

  • In recent weeks, ‘s Fifth District saw modest employment growth with mixed hiring plans, continued modest wage growth
  • Latest reports moderate year-over-year price growth expected to increase more quickly
  • Cargo volumes surged due to frontloading to pre-empt ; imports warehoused near ports

The in the Federal Reserve’s Fifth District — encompassing Virginia, Maryland, North Carolina, , Washington, D.C., and most of West Virginia — continued to expand mildly in recent weeks, according to the latest edition of the Fed’s Beige Book, released Wednesday.

Published eight times per year, the Beige Book is based on anecdotal information about  gathered from the nation’s 12 Federal Reserve Banks. It is compiled from reports by Fed Bank and branch directors, as well as information gathered from business contacts, community organizations, economists, market experts and other sources. The June edition is an update from the Fed’s April 23 report.

Here’s what the most recent Beige Book edition revealed about the direction the regional economy is taking:

Employment increased slightly in the most recent reporting period. Business contacts had differing hiring plans based on their expectations. While a Maryland fast-casual restaurant decided to add locations, and therefore jobs, a different fast-casual restaurant in the Washington, D.C., region paused all hiring because of local . A business consultant based in Richmond planned to reduce headcount by 20% because of declining revenues and uncertainty about future business.

Fed sources continued to report modest wage increases and pressure to raise wages more because of expected cost-of-living increases.

Despite rising input costs, year-over-year price growth in the Fifth District remained moderate, according to the Fed. Firms reported input costs rising at faster rates, and many business sources attributed the change to tariffs on materials they import. They also expected prices to increase more quickly over the next six months.

Manufacturers reported a slight increase in annual price growth. Non-manufacturers, though, reported a slight decrease. Survey respondents from both sectors saw prices grow in the 2.5-3% range.

activity declined modestly in this reporting period. Multiple Fed sources reported they adjusted their operations because of increased uncertainty. A multinational machine manufacturer, for example, shut down a domestic product line that sold internationally because of tariffs on exports.

Some manufacturers were surprised to see an uptick in new orders, including a cabinetmaker whose clients with office projects wanted to get ahead of tariffs and interest rate changes.

Cargo volumes in the Fifth District increased robustly, according to the Fed, and some ports had record import levels not seen since the post-COVID surge in fall 2023. Fed sources attributed the increase in imports to frontloading of goods from East Asian countries to preempt tariffs. Imports of automobiles and auto parts had notable upticks. Contacts from ports expected import volume to slow later this year because of the frontloading of goods.

Export volumes decreased moderately. Contacts attributed the decrease to tariffs imposed by other countries that shifted demand for U.S. agricultural products like timber, grain and soybeans.

Demand for bonded warehouse space shot up, with shippers seeking space to hold cargo near ports and wait out tariff changes. Trucking demand remained weak because companies were warehousing imports close to ports.

in the Fifth District increased slightly in the most recent reporting period. Most retailers saw steady to increasing sales, although the number of big ticket purchases declined. Hospitality companies also reported an overall increase in activity.

Contacts from both sectors noted consumers were opting for lower-priced alternatives. Conversely, some luxury retailers, hotels and experience providers had strong sales. Many retail and hospitality contacts expect sales to slow in the coming months due to declining consumer sentiment, potentially higher prices and heightened uncertainty.

Fifth District residential flattened in past weeks. Inventory continued to increase, but buyer traffic decreased slightly. Homebuilders expressed frustration with “regulatory ‘red tape’” that adds to costs, as well as the uncertainty tariffs create on future prices for raw materials and home appliances.

Commercial real estate also flattened. Industrial space was most affected as companies tried to assess operating space, tariffs and whether to maintain a U.S. presence. Office space vacancy rates continued to decrease as companies returned to in-person work. The region had a slight uptick in office space upfits. One Virginia agent said government contractors have a motivation to upfit their offices for security reasons.

Financial institutions reported steady demand for most loan types and modest increases in demand for commercial real estate loans. Contacts described increases in demand for consumer real estate loans as seasonal but still at historical lows. Modest increases in delinquency rates continued, although rates are still at low levels overall. Deposit levels remained stable, and competition between institutions eased.

Nonfinancial service providers saw a slight increase in demand but were unsure how long it would last. Multiple consulting firms said they would either reduce staff or, at a minimum, maintain their current workforce until they and their clients have more economic certainty.