By MATT OTT, Associated Press Business Writer

WASHINGTON (AP) — The number of Americans filing for unemployment benefits fell last week to the lowest level in three months, a sign that the U.S. labor market remains sturdy despite fears over the impact of widespread U.S. tariffs.

The Labor Department reported Thursday that jobless claims for the week ending July 12 fell by 7,000 to 221,000, the fewest since mid-April. Last week’s number was also lower than the 232,000 that analysts forecast. Applications for unemployment aid are viewed as representative of layoffs.

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Earlier this month, the Labor Department reported that U.S. employers added a surprising 147,000 jobs in June, adding to evidence that the American labor market continues to show resilience despite uncertainty over President Donald Trump’s economic policies. The job gains were much bigger than expected and the unemployment rate ticked down 4.1% from 4.2% in May. Analysts were expecting the unemployment to rise to 4.3%.

Though the job market is broadly healthy by historical standards, some weakness has surfaced as employers contend with fallout from Trump’s policies, especially his aggressive tariffs, which raise prices for businesses and consumers. Most economists believe the import duties make the economy less efficient by reducing competition. They also invite retaliatory tariffs from other countries, hurting U.S. exporters and potentially driving businesses to freeze hiring or cut staff.

The deadline on most of Trump’s stiff proposed taxes on imports were extended again until Aug. 1. Unless Trump reaches deals with other countries to lower the tariffs, economists fear they could act as a drag on the economy and trigger another bout of inflation.

Companies that have announced job cuts this year include Procter & Gamble, Workday, Dow, CNN, Starbucks, Southwest Airlines, Microsoft, Google and Facebook parent company Meta.

The Labor Department’s report Thursday said that the four-week average of claims, which smooths out some of the weekly ups and downs, fell by 6,250 to 229,500.

The total number of Americans collecting unemployment benefits for the week of July 5 remained stable, ticking up by just 2,000 to 1.96 million.

By ANNE D’INNOCENZIO, Associated Press Business Writer

WASHINGTON (AP) — After an earlier pullback, consumers picked up their spending in June despite anxiety over tariffs and the state of the U.S. economy.

Retail sales rose a better-than-expected 0.6% in June after declining 0.9% in May, the Commerce Department said Thursday. Sales in April fell 0.1%, pulled down by a steep drop in auto sales, after Americans ramped up their car-buying in March to get ahead of President Donald Trump’s 25% duty on imported cars and car parts.

Excluding autos and automotive parts, sales rose 0.5%, according to the Commerce Department.

FILE – Shoppers leave Macy’s in Boston, Nov. 29, 2019. (AP Photo/Michael Dwyer, file)

There was broad-based strength across the board. Clothing and accessories stores posted a 0.9% sales increase, while restaurants had a 0.6% increase. Online retailers saw a 0.4% gain.

The retail sales report arrives amid a whipsaw frenzy of on and off again tariffs have that jolted businesses and households. For businesses, that has made it harder to manage supply and inventories. Americans are focusing more on necessities, when they do shop.

The latest government report showed that inflation rose last month to its highest level since February as Trump’s sweeping tariffs push up the costs of everything from groceries and clothes to furniture and appliances.

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Consumer prices rose 2.7% in June from a year earlier, the Labor Department said Tuesday, up from an annual increase of 2.4% in May. On a monthly basis, prices climbed 0.3% from May to June, after rising just 0.1% the previous month.

Trump insists that the U.S. effectively has no inflation as he has attempted to pressure Federal Reserve Chair Jerome Powell into reducing short-term interest rates.

Yet the new inflation numbers make it more likely that the central bank will leave rates where they are. Powell has said that he wants to measure the economic impact of Trump’s tariffs before reducing borrowing costs.

Americans have continued to spend, but they appear to be growing cautious.

A big litmus test was Amazon’s four-day Prime event along with competing retail sales from the likes of Walmart and Target that kicked off last week. Adobe Digital Insights, which tracks online sales, reported that the sales events drove $24.1 billion in online spending, a 30.3% increase compared with the same period last year.

But those buying prioritized lower priced essentials like dish soap and paper products over big-ticket purchases, according to consumer data provider Numerator, based on its analysis of Amazon Prime orders.

Deborah Weinswig, founder and CEO of Coresight Research, said she’s becoming more optimistic about the financial health of the consumer after the Amazon Prime events. She said inventories are at a healthy level, and she didn’t’ see these big fire sales.

”People aren’t buying things that they don’t need,” she said. “I think it’s a healthier retail environment.”

Retailers are now turning their attention to the back-to-school shopping season, which is the second largest shopping period behind the winter holidays. Coresight Research estimates that total U.S. back-to-school spending will increase by 3.3% year compared with the year-ago period, to $33.3 billion. And it predicts that shoppers will do a big chunk of their shopping before August to get ahead of tariffs.

Economists will also dissect quarterly financial reports next month from major retailers like Walmart, Target and Macy’s, both for consumer behavior and to gauge how businesses are navigating a chaotic period of global trade due to fluid U.S. policies.

Levi Strauss & Co. said last week that it was cutting back on making styles that aren’t selling and making targeted price increases as it moves production away from China due to tariffs.

By STEPHEN GROVES, Associated Press

WASHINGTON (AP) — Federal Reserve Chair Jerome Powell is gaining some key backing on Capitol Hill from GOP senators who fear the repercussions if President Donald Trump follows through with threats to try and remove the politically independent central banker.

As Trump seemingly waffled back and forth this week on trying to dismiss the Fed chair, some Republicans in Congress began to speak up and warn that such a move would be a mistake. Trump would potentially obliterate the Fed’s independence from political influence and inject uncertainty into the foundations of the U.S. economy if he fires Powell.

“If anybody thinks it would be a good idea for the Fed to become another agency in the government subject to the president, they’re making a huge mistake,” GOP North Carolina Sen. Thom Tillis said in a floor speech.

The measure of support from GOP members of the Senate Committee on Banking, Housing, and Urban Affairs showed how traditional Republicans are carefully navigating a presidency in which Trump often flirts with ideas — like steep tariffs or firing the Fed chair — that threaten to undermine confidence in the U.S. economy.

Tillis, who recently decided not to seek reelection after clashing with Trump, later told The Associated Press that the economic fallout from Powell’s firing would mostly hurt “little guys like me that grew up in trailer parks that may have a few thousand dollars in a 401k.”

Sen. Thom Tillis, R-N.C., a member of the Senate Banking Committee, tells reporters that it would be a mistake for President Donald Trump to fire Federal Reserve Chair Jerome Powell, during a vote in the Senate, at the Capitol in Washington, Wednesday, July 16, 2025. (AP Photo/J. Scott Applewhite)

He also pointed out that the underlying complaint that Trump has with the Fed — its reluctance to cut interest rates — is not controlled by Powell alone, but instead a 12-member committee.

“The markets expect an independent, central bank,” said GOP South Dakota Sen. Mike Rounds, who cautioned against firing Powell. “And if they thought for a minute that he wasn’t independent, it would cast a spell over the forecasts and the integrity of the decisions being made by the bank.”

Still, plenty of other Republicans think that dismissing Powell is a fine idea.

“The most incompetent, worst Federal Reserve chairman in American history should resign,” said GOP Ohio Sen. Bernie Moreno.

Trump said he was also encouraged to fire Powell during a meeting with about a dozen far-right House members Tuesday evening.

Do presidents have authority to fire the Fed chair?

House Speaker Mike Johnson, R-La., told reporters that he was “unhappy with the leadership” at the Fed, but added “I’m honestly not sure whether that executive authority exists” to fire Powell.

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House Financial Services Committee chair French Hill has underscored that presidents don’t have the authority to fire the Fed chair, yet has also been sympathetic to Trump’s complaints about Powell’s leadership. He and other Republicans have also noted that Powell’s term as chair is ending next year anyway, and Trump will have an opportunity to name a new chair then.

When Congress started the Federal Reserve over 100 years ago, it insulated it from political pressure by stipulating that its governors and chair could only be fired “for cause” — a higher bar than most political appointees. However, the Trump administration has maneuvered to meet that standard by accusing Powell of mishandling a $2.5 billion renovation project at the Fed’s headquarters.

“When his initial attempts to bully Powell failed, Trump and Republicans in Congress suddenly decided to look into how much the Fed is spending on building renovations,” Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, said in a speech Wednesday. “Independence does not mean impunity and I have long pushed for more transparency and accountability at the Fed. But give me a break.”

After Powell sent Congress a letter detailing parts of the renovation project, Sen. Tim Scott, the Senate Banking Committee chair, released a short statement saying Scott “has continued to call for increased transparency and accountability at the Federal Reserve, and this letter is consistent with improving the communication and transparency he is seeking.”

Avoiding a protracted legal battle

Regardless, it would be legally dubious to fire Powell over the renovation.

“That would be litigated and I don’t see a reason, for cause or otherwise, to remove him,” Sen. John Kennedy, a Republican member of the Senate committee that oversees the Fed, told reporters this week.

He added that he understood the president’s “frustration” with the Fed’s reluctance to lower interest rates as it tries to tamp down inflation, saying, “I get that, but I think it’s very important the Federal Reserve remains independent.”

Even those Republicans who argued that the president has grounds to fire Powell and piled criticism on the central banker conceded that it would still be a painful step.

“That’s a decision the president will make, and he’s being very deliberate about it,” said Moreno, the Ohio senator who called for Powell’s resignation. “But I don’t think we should put the country through any of that.”

By OLGA R. RODRIGUEZ, Associated Press

A U.S. Army veteran who was arrested during an immigration raid at a Southern California marijuana farm last week said Wednesday he was sprayed with tear gas and pepper spray before being dragged from his vehicle and pinned down by federal agents who arrested him.

George Retes, 25, who works as a security guard at Glass House Farms in Camarillo, said he was arriving at work on July 10 when several federal agents surrounded his car and — despite him identifying himself as a U.S. citizen — broke his window, peppered sprayed him and dragged him out.

“It took two officers to nail my back and then one on my neck to arrest me even though my hands were already behind my back,” Retes said.

Massive farm raids led to hundreds being detained

The Ventura City native was detained during chaotic raids at two Southern California farms where federal authorities arrested more than 360 people, one of the largest operations since President Donald Trump took office in January. Protesters faced off against federal agents in military-style gear, and one farmworker died after falling from a greenhouse roof.

The raids came more than a month into an extended immigration crackdown by the Trump administration across Southern California that was originally centered in Los Angeles, where local officials say the federal actions are spreading fear in immigrant communities.

California Gov. Gavin Newsom spoke on the raids at a news conference Wednesday, calling Trump a “chaos agent” who has incited violence and spread fear in communities.

“You got someone who dropped 30 feet because they were scared to death and lost their life,” he said, referring to the farmworker who died in the raids. “People are quite literally disappearing with no due process, no rights.”

Retes was taken to the Metropolitan Detention Center in downtown Los Angeles, where he said he was put in a special cell on suicide watch and checked on each day after he became emotionally distraught over his ordeal and missing his 3-year-old daughter’s birthday party Saturday.

In this image taken from video provided by United Farm Workers, George Retes speaks about being arrested at an immigration raid at a Southern California marijuana farm during a press conference held over Zoom in Oxnard, Calif., Wednesday, July 16, 2025. (United Farm Workers via AP)

He said federal agents never told him why he was arrested or allowed him to contact a lawyer or his family during his three-day detention. Authorities never let him shower or change clothes despite being covered in tear gas and pepper spray, Retes said, adding that his hands burned throughout the first night he spent in custody.

On Sunday, an officer had him sign a paper and walked him out of the detention center. He said he was told he faced no charges.

Retes met with silence when seeking explanation

“They gave me nothing I could wrap my head around,” Retes said, explaining that he was met with silence on his way out when he asked about being “locked up for three days with no reason and no charges.”

Tricia McLaughlin, assistant secretary of the Department of Homeland Security, confirmed Retes’ arrest but didn’t say on what charges.

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“George Retes was arrested and has been released,” she said. “He has not been charged. The U.S. Attorney’s Office is reviewing his case, along with dozens of others, for potential federal charges related to the execution of the federal search warrant in Camarillo.”

A federal judge on Friday ordered the Trump administration to halt indiscriminate immigration stops and arrests without warrants in seven California counties, including Los Angeles. Immigrant advocates accused federal agents of detaining people because they looked Latino. The Justice Department appealed on Monday and asked for the order to be stayed.

The Pentagon also said Tuesday it was ending the deployment of 2,000 National Guard troops in Los Angeles. That’s roughly half the number the administration sent to the city following protests over the immigration actions. Some of those troops have been accompanying federal agents during their immigration enforcement operations.

Retes said he joined the Army at 18 and served four years, including deploying to Iraq in 2019.

“I joined the service to help better myself,” he said. “I did it because I love this (expletive) country. We are one nation and no matter what, we should be together. All this separation and stuff between everyone is just the way it shouldn’t be.”

Veteran pledges to sue federal authorities for his ordeal

Retes said he plans to sue for wrongful detention.

“The way they’re going about this entire deportation process is completely wrong, chasing people who are just working, especially trying to feed everyone here in the U.S.,” he said. “No one deserves to be treated the way they treat people.”

Retes was detained along with California State University Channel Islands professor Jonathan Caravello, also a U.S. citizen, who was arrested for throwing a tear gas canister at law enforcement, U.S. Attorney Bill Essayli posted on X.

Milk is poured on a protester’s face after federal immigration agents tossed tear gas at protesters during a raid in the agriculture area of Camarillo, Calif., Thursday, July 10, 2025. (AP Photo/Michael Owen Baker)

The California Faculty Association said Caravello was taken away by agents who did not identify themselves nor inform him of why he was being taken into custody. Like Retes, the association said the professor was then held without being allowed to contact his family or an attorney.

Caravello was attempting to dislodge a tear gas canister that was stuck underneath someone’s wheelchair, witnesses told KABC-TV, the ABC affiliate in Los Angeles.

A federal judge on Monday ordered Caravello to be released on $15,000 bond. He’s scheduled to be arraigned Aug. 1.

“I want everyone to know what happened. This doesn’t just affect one person,” Retes said. “It doesn’t matter if your skin is brown. It doesn’t matter if you’re white. It doesn’t matter if you’re a veteran or you serve this country. They don’t care. They’re just there to fill a quota.” ___ Associated Press writer Jamie Ding contributed from Los Angeles.