By PAUL WISEMAN, AP Economics Writer

WASHINGTON (AP) — U.S. wholesale prices came in hotter than expected last month.

The Labor Department reported Friday that its producer price index, which measures inflation before it hits consumers, rose 0.5% from December and 2.9% from January 2025. Economists had forecast a 0.3% increase for the month and 1.6% year over year, according to a survey by the data firm FactSet.

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Excluding food and energy prices, which bounce around from month to month, so-called core wholesale prices rose 0.8% from December and 3.6% from January 2025 — both higher than forecasters had expected.

Energy prices were down. Wholesale gasoline prices fell 5.5% from December and plunged 15.7% from a year earlier.

Driving the increase was an uptick in the wholesale price of services, led by higher profit margins for retailers and wholesalers.

The producer price report comes two weeks after the Labor Department reported that consumer prices rose just 2.4% last month compared to a year earlier, closing in on the Federal Reserve’s 2% target.

Economists had worried that President Donald Trump’s double-digit taxes on imports would drive inflation higher. Their impact has so far been more modest than expected — although inflation remains higher than the Fed would like.

Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably measures of health care and financial services, flow into the Fed’s preferred inflation gauge — the personal consumption expenditures, or PCE, price index.

By ELAINE KURTENBACH and MATT OTT, AP Business Writers

U.S. futures fell overnight Friday after Block CEO Jack Dorsey said his payment company would lay off 40% of its workforce, citing a shift to artificial intelligence.

Futures for the S&P 500 and Nasdaq each fell 0.4% before the opening bell, while futures for the Dow Jones Industrial Average sank 0.6%.

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Shares in Block, formerly known as Square, shot up more than 20% after markets closed following Dorsey’s comments about laying off about 4,000 of its 10,000 employees.

“We believe Block will be significantly more valuable as a smaller, faster, intelligence-native company. Everything we do from here is in service of that,” Dorsey wrote in a letter to shareholders.

Dorsey “just did what most CEOs have only whispered about in boardrooms,” Stephen Innes of SPI Asset Management wrote in a commentary.

“For years we’ve debated whether AI would dent jobs at the margin. Now we have a public case study where the CEO explicitly says intelligence tools have changed what it means to build and run a company,” he said.

Shares in streaming giant Netflix jumped 7.3% in premarket trading after it walked away from its bid to buy Warner Bros. Discovery’s studio and streaming business. That put Skydance-owned Paramount in a position to take over its Hollywood rival. Paramount Skydance shares climbed 7.9% before trading opened Friday.

Netflix said the price required to buy Warner after its board announced that Paramount’s offer was superior would make it a deal that is “no longer financially attractive.”

Warner Bros. shares fell 1.4% overnight. On Thursday, the entertainment giant reported a $252 million loss for the fourth quarter.

Coming later Friday morning is the latest data on U.S. inflation at the wholesale level.

Elsewhere, in Europe at midday, Germany’s DAX rose 0.3%, while the CAC 40 dipped 0.2%. Britain’s FTSE 100 gained 0.5%.

In Asian trading, Tokyo’s Nikkei 225 edged 0.2% higher to 58,850.27.

In Hong Kong, the Hang Seng jumped 1% to 26,630.54, while the Shanghai Composite index advanced 0.4% to 4,162.88.

South Korea’s Kospi lost 1% to 6,244.13 as traders sold to lock in profits from recent gains.

Australia’s S&P/ASX 200 closed 0.3% higher at 9,198.60, while India’s Sensex lost 0.8%.

In energy markets, U.S. benchmark crude oil gained $1.66 to $66.87 per barrel. Crude prices have been swinging while the United States and Iran held indirect talks about Iran’s nuclear program.

The two sides walked away from the latest talks without a deal. That left the danger of another Mideast war on the table as the U.S. has gathered a massive fleet of aircraft and warships in the region.

A peaceful solution would lessen the threat of war, which could disrupt the global flow of oil and drive prices higher.

Brent crude, the international standard, gained $1.70 early Friday to $72.54 per barrel.

The dollar fell to 155.93 Japanese yen from 156.13 yen. The euro rose to $1.1803 from $1.1796.

The Minnesota Orchestra rang in the Lunar New Year with a celebratory evening of music, culture and a dancing dragon. Featuring both folk and contemporary music from China, Singapore, Taiwan, Korea and beyond, the show emphasized cross-cultural explorations even as it honored musical traditions of countries who mark their calendars by the moon.

Pipa player Gao Hong and the Carleton College Chinese Music Ensemble got things started with a pre-show in the atrium before the concert. Hong performed in group pieces and accompanied soloists throughout the short presentation. An exquisite player herself, Hong mostly let her talented students take the spotlight for the warm-up show.

After the pre-show, the evening began in earnest in the auditorium, where guest conductor Chia-Hsuan Lin led a crowd-pleasing program, thanks in part to principal bassoon Fei Xie, who was artistic consultant for the event.

The first two works came from alumni of the Minnesota Orchestra Composer Institute, a program that nurtures emerging composers each year. Zhou Tian, who participated in the program in 2006 and has since been nominated for a Grammy, wrote a marvelous piece titled “Gift,” which the orchestra performed, while Texu Kim created a commissioned new arrangement of Hong Nan-pa’s “Spring in My Hometown,” and the orchestra gave its world premiere at the concert.

Both works carried cinematic, pastoral qualities. Zhou’s work swelled with sweet detail and texture, while “Spring in My Hometown” brought an earthy, meditative feeling.

Then, guest suona player Yazhi Guo played two numbers. A member of the Silk Road Ensemble, a group founded by Yo-Yo Ma, who is also coming to play a sold-out concert with the Minnesota Orchestra on March 3, Guo’s performance was a journey.

The suona is a squeaky instrument. It has a double reed, looks a bit like a trumpet, and sounded like a cross between an oboe and a saxophone, and at times a bagpipe without the drone. Guo’s performance was a whirlwind of unexpected rhythms, inspired characters, and joyful play.

First up was Hao-Fu Zhang’s “The River Crosses the Desert,” opening with a gong and continuing with mysterious percussive sounds — one section sounded like a descent of woodpeckers. Between gurgling cello and moody brass, the orchestra reached cacophony.

Guo’s second piece, the traditional Chinese “Hundreds of Birds Worshipping the Phoenix,” arranged by Huihui Cheng, featured Guo channeling the squawks and squabbles of birds, approximating nature’s rhythms.

At intermission, guests watched a dragon dance performed by the Alliance of Minnesota Chinese Organizations and the CAAM Chinese Dance Theater. Accompanied by boisterous drumming, puppeteers swept through the foyer and up the stairs with thunderous artistry.

After intermission, the orchestra performed a series of shorter pieces, beginning with an excerpt of Bright Sheng’s Concerto for Orchestra: “Zodiac Tales,” titled “The Flying Horses.” With its riveting trombone and smashing rhythms, the music exhilarated.

Next, the Minnesota Orchestra’s assistant concertmaster, Rui Du, shared his rich tone and emotional nuance in “Nostalgia” by Ma Sicong and “Seed of Eternal Love,” by Gordon She-Wen Chin.

The orchestra closed out the evening with a series of joyful numbers: “Confluence” by Wang Chenwei had a swinging sense of excitement, while Huang Ruos’s “Flower Drum Song from Feng Yang,” and Li Huanzhi’s “Spring Festival Overture” brought the program to a festive end.

The orchestra also played an encore. In a nod to host Roz Tsai, who likened “Spring Festival Overture” to Tchaikovsky’s “1812 Overture,” the orchestra finished off the evening with the Western classic. The choice made for a somewhat disjointed conclusion as it veered from the rest of the concert celebrating Asian traditions.

The Minnesota Orchestra

Next up: Ben Rector: Symphonies Across America

When: 7 p.m. on Sat. Feb. 28

Where: Orchestra Hall, 1111 Nicollet Mall, Minneapolis

Tickets: $54-$136

Info: minnesotaorchestra.org

Accessibility: See minnesotaorchestra.org/plan-your-visit/accessibility

Capsule: After a riveting Lunar New Year Concert, the Minnesota Orchestra teams up with Ben Rector for an Anthem Sing-Along.

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By JOSH FUNK and KONSTANTIN TOROPIN

The U.S. military used a laser Thursday to shoot down a “seemingly threatening” drone flying near the U.S.-Mexico border. It turned out the drone belonged to Customs and Border Protection, lawmakers said.

The case of mistaken identity prompted the Federal Aviation Administration to close additional airspace around Fort Hancock, about 50 miles southeast of El Paso. The military is required to formally notify the FAA when it takes any counter-drone action inside U.S. airspace.

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It was the second time in two weeks that a laser was fired in the area. The last time it was CBP that used the weapon and nothing was hit. That incident occurred near Fort Bliss and prompted the FAA to shut down air traffic at El Paso airport and the surrounding area. This time, the closure was smaller and commercial flights were not affected.

Washington U.S. Rep. Rick Larsen and two other top Democrats on the House Transportation and Infrastructure and Homeland Security committees said they were stunned when they were officially notified.

“Our heads are exploding over the news,” the lawmakers said in a joint statement. They criticized the Trump administration for “sidestepping” a bipartisan bill to train drone operators and improve communication among the Pentagon, FAA and Department of Homeland Security, which includes CBP.

“Now, we’re seeing the result of its incompetence,” they said.

Government defends use of anti-drone laser

The FAA, CBP and the Pentagon issued a joint statement late Thursday that acknowledged the military “employed counter-unmanned aircraft system authorities to mitigate a seemingly threatening unmanned aerial system operating within military airspace.”

The statement said it happened far from populated areas and commercial flights as part of the administration’s efforts to strengthen protections at the border.

“At President Trump’s direction, the Department of War, FAA, and Customs and Border Patrol are working together in an unprecedented fashion to mitigate drone threats by Mexican cartels and foreign terrorist organizations at the U.S.-Mexico Border,” the statement said.

Second time these laser systems shut down Texas airspace this month

The El Paso shutdown two weeks ago lasted only a few hours, but it raised alarm and led to a number of flight cancellations in the city of nearly 700,000 people.

In that case, an anti-drone laser was deployed by CBP without coordinating with the FAA, which then decided to close the El Paso airspace to ensure commercial air safety, according to sources familiar with what happened and weren’t authorized to discuss it.

Afterward, members of Congress said it appeared to be another example of different agencies failing to coordinate with each other.

Transportation Secretary Sean Duffy said he was planning to brief members of Congress about the incident. He said at an unrelated news conference last Friday that it wasn’t a mistake for the FAA to close the airspace in El Paso and that he doesn’t think it was a communication issue that led to the problems.

Lawmaker demands an investigation

Illinois Democratic U.S. Sen. Tammy Duckworth, the ranking member on the Senate’s Aviation Subcommittee, called for an independent investigation.

“The Trump administration’s incompetence continues to cause chaos in our skies,” Duckworth said.

The investigation into last year’s midair collision near Washington, D.C., between an airliner and Army helicopter that killed 67 people highlighted how the FAA and Pentagon were not always working well together.

The National Transportation Safety Board said the FAA and the Army did not share safety data with each other about the alarming number of close calls around Reagan National Airport and failed to address the risks.

Concern about drone threats growing

Two months ago, Congress agreed to give more law enforcement agencies — including some state and local departments — the authority to take down rogue drones as long as they are properly trained. Previously, only a select few federal agencies had that power.

Armed drones regularly carry out devastating attacks in Ukraine and have also allowed Ukraine to strike deep within Russia. The U.S. government has handed out more than $250 million to help the states prepare to respond to drones before hosting World Cup matches and celebrations planned this summer for America’s 250th birthday.

Another $250 million in grants will be awarded later this year to strengthen the nation’s drone defenses.

Drones already causing problems

Drones already cause problems along the border. Cartels routinely use drones to deliver drugs across the Mexican border and surveil Border Patrol officers. Officials told Congress last summer that more than 27,000 drones were detected within 1,600 feet of the southern border in the last six months of 2024.

The threat to planes from drones continues to increase along with the number of near misses around airports. Homeland Security estimates there are more than 1.7 million registered drones flying in the United States.

Anti-drone systems can use radio signals to jam drones, or high-powered microwaves or laser beams like the ones that have been used in Texas that are capable of disabling the machines. Some others station small drones to take flight quickly and ram into threatening drones. And there are systems that use bullets, but those are more common on battlefields than in domestic use.