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    Trump immigration policy may be shrinking labor force, economists say

    Evidence suggests Trump administration immigration policies are shrinking the size of the immigrant labor force, and the broader U.S. labor pool in recent months, according to economists CNBC spoke with and research notes on the topic.
    If sustained, which isn’t assured, it could pose challenges for the U.S. economy, those experts said.
    The U.S. will increasingly rely on immigration into the future to grow the national population and labor force, given demographic trends.

    People in Tijuana, Mexico, look though the U.S.-Mexico border wall at Border Field State Park on Aug. 17, 2025 in Imperial Beach, California.
    Kevin Carter | Getty Images News | Getty Images

    Early evidence suggests that White House policy is reducing the size of the immigrant labor force, in turn contributing to a recent drawdown in the overall U.S. labor pool, according to several economists.
    CNBC spoke with a range of economists from financial firms, economic research institutions and think tanks, and also reviewed recent research notes and analyses that economists have published on immigration and the job market.

    If a reduction in the immigrant labor force is sustained, such a trend would be a concern for the U.S. economy, those experts have said or written.
    That’s because the economy will increasingly rely on immigrants to fuel population and labor force growth given demographic trends among the U.S.-born populace, like retirements among baby boomers and lower fertility rates, they said.
    The downward shift in the immigrant labor force in recent months is “definitive,” said Mark Zandi, chief economist at Moody’s.
    “There’s no debate what’s going on there,” Zandi said.

    ‘Signs are mounting’

    President Donald Trump has pursued an immigration agenda that he’s referred to as “very aggressive.”

    The White House has sought to expand and expedite deportations, end birthright citizenship and restrict access to asylum, among other actions, for example. Many measures are being challenged in court.
    The Trump administration is also readying a rule to end the lottery for H-1B visas — temporary work visas for college graduates in “specialty” fields like architecture, law and tech — and adopt a selection process that favors higher-wage earners.
    Available data makes it hard to track what’s happening to immigration flows and the immigrant labor pool in real time, economists said.
    Some point to Bureau of Labor Statistics data as one signal.
    The size of the foreign-born labor force has declined by about 1.2 million people since January, to 32.1 million total people in July, BLS data shows. (Some government data distinguishes between “foreign-born” and “native-born” workers — or, immigrants versus those born in the U.S.)
    Nancy Vanden Houten, lead economist at Oxford Economics, cited the data in an Aug. 1 research note.
    “[S]igns are mounting that the foreign-born labor force is shrinking due to the Trump administration’s immigration policies,” she wrote.

    The U.S. labor force includes all people age 16 and older who are actively working or looking for work.
    The BLS’ reported decline in the foreign-born labor force has been “very dramatic” and larger than expected, said Stephen Brown, deputy chief North America economist at Capital Economics.
    In July, the labor force participation rate had declined 0.3 percentage point for native-born workers compared with a year earlier, but had fallen by a much larger 1.2 percentage points for foreign-born workers, according to a J.P. Morgan analysis.

    “[M]any immigrants appear to be leaving the labor force, wrote David Kelly, chief global strategist at J.P. Morgan Asset Management.
    White House spokesperson Abigail Jackson said in an emailed statement that the Trump administration is committed to helping U.S. employers “ensure they have the legal workforce they need to be successful.”
    “There is no shortage of American minds and hands to grow our labor force, and President Trump’s agenda to create jobs for American workers represents this Administration’s commitment to capitalizing on that untapped potential while delivering on our mandate to enforce our immigration laws,” Jackson wrote.

    ‘Significantly weaker’ job growth

    Some economists say the BLS data on the foreign-born and native-born labor force segments isn’t a reliable gauge of near-term trends, due to various quirks in how it’s collected and reported.
    Trump questioned the accuracy of BLS statistics and fired the bureau’s chief in August after a monthly report showed unexpectedly weak job growth.
    But there’s other evidence that economists point to that also suggests the immigrant labor pool is shrinking.
    For example, job growth among industries that rely more heavily on undocumented immigrants has been “significantly weaker” than in the rest of the private sector, said Jed Kolko, a senior fellow at the Peterson Institute for International Economics and former undersecretary for economic affairs at the U.S. Department of Commerce during the Biden administration.

    Job growth in those industries — such as hotels, restaurants, construction and home health aides — has been flat since the start of 2025, said Kolko. In July, jobs grew at a 0% rate in immigrant-heavy industries, he found.
    Meanwhile, job growth has slowed in the rest of the private sector — a roughly 0.6% pace in July — but the deceleration wasn’t as stark, he said.
    Kolko analyzed federal data to calculate the three-month average annualized rate of employment growth in respective industries.

    [S]igns are mounting that the foreign-born labor force is shrinking due to the Trump administration’s immigration policies.

    Nancy Vanden Houten
    lead economist at Oxford Economics

    Matthew Martin, senior U.S. economist at Oxford Economics, found an additional link between immigration policy and its impact on the labor force.
    Labor force growth has been “stagnant” in states like Texas and Florida with high immigrant arrests per capita, he wrote in an Aug. 4 research note, citing Immigration and Customs Enforcement data.
    “States such as Texas and Florida have seen more intense crackdowns than California, New York, and New Jersey,” Martin wrote. The “low-arrest” states have seen positive labor force growth in 2025, by contrast, he wrote.
    “The data show that while the foreign-born labor force in low arrest-to-population states has increased since the beginning of the year, the labor force in high-arrest states flatlined,” he wrote.

    Labor force growth is ‘a great deal slower’

    Vans leave an agricultural facility where U.S. federal agents and immigration officers carried out an operation, as U.S. federal agents stand guard , in Camarillo, California, U.S., July 10, 2025.
    Daniel Cole | Reuters

    Nationwide, immigrant arrests have more than tripled since 2024, to more than 1,100 per day through mid-June, wrote Martin, citing ICE data.
    Last month, Jerome Powell, chair of the Federal Reserve, cited immigration policy as a factor behind the slowdown in the labor supply.
    “[B]ecause of immigration policy really, the flow into our labor forces is just a great deal slower,” Powell said during a news conference on July 30.
    The total U.S. labor force — including immigrants and native-born workers — has fallen for three consecutive months, according to BLS data. It has declined by 402,000 people from January to July, to about 170.3 million, the BLS reported.
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    Arrests and deportations, fear of showing up to the workplace, and fewer flows of immigrants into the U.S. may be playing a role, economists said.
    Two programs that have given roughly 1.8 million immigrants from troubled countries the temporary right to live and work in the U.S. are being phased out this year, wrote Kelly of J.P. Morgan. This change in status may reduce labor supply by more than 1 million workers, he wrote, citing J.P. Morgan research.
    Of course, a decline in the labor supply isn’t only a function of immigration.

    For example, unemployed people discouraged by the difficulty of finding a job right now may opt to sit on the sidelines instead of looking for work, meaning they wouldn’t be counted in the labor force, said Brown of Capital Economics.
    The White House has also taken steps that it says will boost employment among immigrants who are in the U.S. legally.
    The Department of Labor established the Office of Immigration Policy in June, which the administration has said will streamline the process to secure temporary and permanent work visas, for example. Trump also signed an executive order in April seeking to support high-paid, skilled trade jobs.

    Why a shrinking labor force is a concern

    A U.S. Customs and Border Protection (CBP) Border Patrol agent stands at Border Field State Park with the U.S.-Mexico border wall in the background on Aug. 17, 2025 in Imperial Beach, California.
    Kevin Carter | Getty Images News | Getty Images

    Growth in the labor force is one of the “key” things determining how fast the U.S. economy can expand and how productive companies are, for example, Vanden Houten of Oxford Economics said in an interview.
    A sustained decline in the size of the labor force — which is far from being assured — would be a concern, said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank.
    “If we want the type of economic growth that we historically consider successful, then the demographic reality is that we’re going to have to increase inflows of immigrants,” Strain said. “There’s no real way around that.”
    Without immigration, the population would shrink starting in 2033, partly because fertility rates are projected to remain low, according to the nonpartisan Congressional Budget Office.

    [B]ecause of immigration policy really, the flow into our labor forces is just a great deal slower.

    Jerome Powell
    chair of the Federal Reserve

    Additionally, a smaller labor pool might put pressure on employers to raise wages to attract talent, potentially exacerbating inflation, and would bring in less tax revenue to fund programs like Social Security, economists said.
    The construction industry, which already suffers from labor shortages, is at risk of wage inflation, for example, according to a Bank of America Institute report published Tuesday.
    Average wage growth in July approached 8% in the construction industry, nearly double the national average, according to the report.
    “Immigration actions could potentially deepen workforce shortages, drive up costs and create serious financial risks for contractors,” the Bank of America report said.

    Construction workers build a new home in Altadena, California on August 15, 2025.
    Mario Tama | Getty Images

    About 34% of construction workers are immigrants, versus the 20% average across all sectors, the report said. In trades like drywall installers or plasterers, the share is closer to 60%, it said.
    A shortage of skilled labor already costs the U.S. economy about $10.8 billion per year due to longer construction times and raises the price of new single-family homes by about $2,600, on average, according to a joint analysis published in June by the Home Builders Institute, the National Association of Home Builders and the University of Denver.
    However, some economists are skeptical that the U.S. will suffer a prolonged reduction in the immigrant labor force.
    The Trump administration’s plan likely isn’t to have “net-out migration,” Strain said.
    “We didn’t see net-out migration in [Trump’s] first term,” Strain said. “That’d cause all sorts of problems for businesses, for key sectors of the economy the president cares about, like construction, and I’d be surprised if that’s where we end up.”
    “But who knows?” he added.

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    Walmart hikes sales and earnings outlook even as it says tariff costs are rising

    Walmart raised its full-year earnings and sales outlook, even as it said costs from tariffs continued to rise.
    The company has started to raise prices on some items, but has kept others unchanged.
    Chief Financial Officer John David Rainey told CNBC that one of the company’s strategies has been bringing in inventory early.

    The logos of Walmart and Sam’s Club are pictured in Cuautitlan Izcalli, Mexico, January 30, 2025.
    Raquel Cunha | Reuters

    Walmart on Thursday raised its full-year earnings and sales outlook as its online business posted another quarter of double-digit gains, even as the company said costs are rising from higher tariffs. 
    The big-box retailer topped Wall Street’s quarterly sales estimates but fell short of earnings expectations, the first time it missed on quarterly earnings since May 2022. The company said it felt pressure on profits for the period, including from some one-time expenses, such as restructuring costs, pricier insurance claims and litigation settlements.

    Walmart said it now expects net sales to grow between 3.75% to 4.75% for the fiscal year, up from its previous expectations for 3% to 4%. It raised its adjusted earnings per share outlook slightly to $2.52 to $2.62, up from a prior range of $2.50 to $2.60 per share.
    In an interview with CNBC, Chief Financial Officer John David Rainey said the company is working hard to keep prices low – including speeding up imports from overseas and stepping up the number of Rollbacks, or limited-time discounts, in its stores. 
    “This is managed on an item-by-item and category-by-category basis,” he said. “There are certainly areas where we have fully absorbed the impact of higher tariff costs. There are other areas where we’ve had to pass some of those costs along.”
    But he added “tariff-impacted costs are continuing to drift upwards.” 
    Even so, Rainey said Walmart hasn’t seen a change in customer spending. For example, sales of private label items, which typically cost less than national brands, were roughly flat year over year, he said.

    “Everyone is looking to see if there are any creaks in the armor or anything that’s happening with the consumer, but it’s been very consistent,” he said. “They continue to be very resilient.”
    Yet on the company’s earnings call, CEO Doug McMillon said middle- and lower-income households have been more sensitive to tariff-related price increases, particularly in discretionary categories.
    “We see a corresponding moderation in units at the item level as customers switch to other items, or in some cases, categories,” he said.
    Here’s what the big-box reported for the fiscal second quarter compared with what Wall Street expected, according to a survey of analysts by LSEG:

    Earnings per share: 68 cents adjusted vs. 74 cents expected
    Revenue: $177.40 billion vs. $176.16 billion

    Walmart shares fell about 2% in premarket trading Thursday.
    Walmart’s net income jumped to $7.03 billion, or 88 cents per share, in the three-month period that ended July 31, compared with $4.50 billion, or 56 cents per share, in the year-ago quarter. 
    Revenue rose from $169.34 billion in the year-ago quarter. 
    Comparable sales for Walmart U.S. climbed 4.6% in the second quarter, excluding fuel, compared with the year-ago period, as both the grocery and health and wellness category saw strong growth. That was higher than the 4% increase that analysts expected. The industry metric, also called same-store sales, includes sales from stores and clubs open for at least a year.
    At Sam’s Club, comparable sales jumped 5.9% excluding fuel, higher than the 5.2% that analysts anticipated.

    E-commerce sales jumped 25% globally and 26% in the U.S., as both online purchases and advertising grew. In the U.S., Walmart said sales through store-fulfilled delivery of groceries and other items grew nearly 50% year over year, with one-third of those orders expedited. The company charges a fee for some of those faster deliveries, and others are included as a benefit of its subscription-based membership program, Walmart+.
    Its global advertising business grew 46% year over year, including Vizio, the smart TV maker it acquired for $2.3 billion last year. Its U.S. advertising business, Walmart Connect, grew by 31%.
    As Walmart’s online business drums up more revenue from home deliveries, advertising and commissions from sellers on its third-party marketplace, e-commerce has become a profitable business. The company marked a milestone in May — posting its first profitable quarter for its e-commerce business in the U.S. and globally.
    Rainey said on Thursday that Walmart doubled its e-commerce profitability in the fiscal second quarter from the prior quarter.

    In the U.S., shoppers both visited Walmart more and spent more on those trips during the quarter. Customer transactions rose 1.5% year over year and average ticket increased 3.1% for Walmart’s U.S. business.
    As the largest U.S. retailer, Walmart offers a unique window into the financial health of American households. As higher duties have come in fits and starts — with some getting delayed and others going into effect earlier this month — Wall Street has tried to understand how those costs will ripple through the U.S. economy.
    Walmart warned in May that it would have to raise some prices due to higher levies on imports, even with its size and scale. The company’s comments drew the ire of President Donald Trump, who said in a social media post that Walmart should “EAT THE TARIFFS.”
    About a third of what Walmart sells in the U.S. comes from other parts of the world, with China, Mexico, Canada, Vietnam and India representing its largest markets for imports, Rainey said in May.
    According to an analysis by CNBC of about 50 items sold by the retailer, some of those price changes have already hit shelves. Items that rose in price at Walmart over the summer included a frying pan, a pair of jeans and a car seat.
    Rainey on Thursday declined to specify items or categories where Walmart had increased prices, saying the company is “trying to keep prices as low as we can.”
    He said one of the company’s strategies has been bringing in inventory early, particularly for Sam’s Club as it gets ready for the second half of the fiscal year and its crucial holiday season. At the end of the quarter, inventory was up about 3.5% at Sam’s Club, Rainey said. It was up 2.2% for Walmart U.S.
    On the company’s earnings call, McMillon said the impact of tariffs has been “gradual enough that any behavioral adjustments by the customer have been somewhat muted.”
    “But as we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters,” he said.
    Yet even with higher costs from tariffs, Walmart has fared better than its retail competitors as it has leaned into its reputation for value, competed on faster deliveries to customers’ homes and attracted more business from higher-income households.
    The Arkansas-based retailer’s performance has diverged sharply from rival Target, which posted another quarter of sales declines on Wednesday and named the new CEO who will be tasked with trying to turn around the company.
    Walmart has gained from Target’s struggles. It has followed the Target playbook by launching more exclusive and trend-driven brands, including grocery brand BetterGoods and activewear brand Love & Sports. It has also expanded its third-party marketplace to include prestige beauty brands and more.
    Sales of general merchandise, items outside of the grocery department, were a bright spot for Walmart in the fiscal second quarter, Rainey said. That category struggled during peak inflation in recent years, as consumers spent less on discretionary items because of rising grocery bills. 
    Comparable sales for general merchandise rose by a low-single-digit percentage and accelerated throughout the quarter, Rainey said. He added clothing and fashion sales “really shined for us.” More

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    How billionaire family offices bet on stocks during tariff turmoil

    The private investment firms of Leon Cooperman and other finance billionaires made major market moves in the second quarter of 2025, according to recent SEC disclosures.
    Family offices that manage more than $100 million in certain equities, particularly ones listed in the U.S., are required to disclose quarterly stock transactions.
    While many trades were clearly spurred by tariff fears and recession anxiety, some family offices made surprising bets on struggling stocks.

    Leon Cooperman on CNBC’s “Halftime Report.”
    Scott Mlyn | CNBC

    A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
    Family offices are known to invest for the long haul, sometimes for generations. But after President Donald Trump’s tariff announcements in April, the family offices of billionaire investors were quick to make significant changes to their portfolios, according to second-quarter securities filings analyzed by CNBC.

    Some moves were clearly connected to tariff and recession fears. In the three months ending June 30, the family offices of David Tepper, Leon Cooperman and George Soros exited their positions in casino stock Las Vegas Sands Corp. Casino operator shares tumbled on fears that a U.S.-China trade war would endanger their Macau operations.
    However, some firms dialed back their exposure to stalwart tech stocks, with Cooperman’s Omega Advisors exiting its Microsoft position and reducing its Alphabet stock by nearly 90%. Stanley Druckenmiller’s Duquesne Family Office sold down 37 positions, including Amazon and about a half dozen pharmaceutical stocks.
    Cooperman told CNBC in June that he thought the stock market was too confident given uncertainties with tariffs and conflicts in the Middle East.
    “I’m not a big bear, but I’m not a big bull either,” he said on “Squawk Box.”
    Institutional investment managers — including family offices and hedge funds — that manage at least $100 million in certain securities, especially U.S.-listed equities, are required to disclose trades on a quarterly basis. While many family offices have stock portfolios worth well over $100 million, they do not have to file these 13F forms if they outsource investment decisions to a third party like JP Morgan or Bessemer Trust, according to lawyer David Guin, a partner at Withers who leads its U.S. corporate practice.

    Not all the moves were related to bigger geopolitical concerns. Despite concerns about tariffs on semiconductors, family offices boosted their Nvidia holdings. Tepper’s Appaloosa Management increased its Nvidia holdings by nearly 500%. Soros Fund Management purchased about 932,000 share-equivalents in Nvidia, including options.

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    In another artificial intelligence play, several firms boosted their bets on other chipmakers, with Appaloosa buying 8 million shares of Intel and 755,000 shares of Taiwan Semiconductor Manufacturing Co. Duquesne and Soros also increased their positions in TSMC.
    Omega Advisors doubled down on energy providers, which are poised to benefit from AI’s energy demands, including Atlas Energy Solutions, Sunoco and Energy Transfer LP.
    As family offices have long investment horizons, they can afford to be opportunistic and wait for stocks to rebound. Appaloosa bought 2.3 million shares in UnitedHealth Group, which suffered a 19% selloff in April after the insurer cut its annual profit forecast. Tepper’s hedge-fund-turned-family-office also bought new stakes in United Airlines and Delta Air Lines even as recession fears threw airline stocks for a loop.
    Some of Appaloosa’s peers made similar bold bets, with Soros Fund Management and BlueCrest Capital Management, the family office of British hedge fund billionaire Michael Platt, also increasing their exposure to UnitedHealth. BlueCrest also started new positions in Delta and United.
    — CNBC’s Nick Wells contributed to this report. More

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    Spirit Airlines is on shakier ground after avoiding hard decisions in bankruptcy

    Spirit Airlines last week warned that it might not be able to survive a year without additional cash.
    Signs of strain are showing, and some aircraft lessors have reached out to competitors to gauge interest in some of Spirit’s aircraft, according to people familiar with the matter.
    The carrier emerged from bankruptcy in March after almost four months and was met with a drop in domestic demand.

    Spirit Airlines baggage tags are seen near a check-in counter at the Austin-Bergstrom International Airport on April 10, 2024 in Austin, Texas. 
    Brandon Bell | Getty Images

    In March, Spirit Airlines came out of bankruptcy protection in less than four months and entered a worsening landscape. Consumers were holding off booking flights and U.S. planes were awash in empty seats. Even the most profitable airlines cut the rosy financial forecasts they had issued at the start of the year.
    But Spirit, an airline with bright yellow planes that has become synonymous with budget travel in the U.S., now appears on even shakier ground. Last week, five months after getting out of bankruptcy, Spirit warned it might not be able to survive a year without more cash and that its credit card processor is seeking more collateral.

    Industry experts said the airline avoided making hard decisions before or during bankruptcy protection, such as renegotiating aircraft leases or shrinking the carrier altogether. Instead, the airline in bankruptcy reached a deal with bondholders, who exchanged debt for equity.
    “It made it that much more unlikely for them to succeed without having tackled some of those issues,” said Joe Rohlena, airline analyst at Fitch Ratings, which downgraded Spirit last Friday, saying the company might be unable to avoid a default because of its cash burn.
    Bankruptcy attorney Brett Miller, U.S. co-chair of the restructuring department at Willkie Farr & Gallagher who represented the creditors’ committee, said Spirit “didn’t use the tools available to them in Chapter 11” for bigger changes.
    Spirit had forecast a net profit of $252 million this year, according to a court filing from December. But its report last week said it instead lost nearly $257 million since March 13, after it exited Chapter 11 through the end of June.
    Shares of Spirit Aviation Holdings have dropped close to 58% since its “going concern” warning earlier this month. The stock of other airlines rallied after the cautionary statement. About 10% of Spirit’s seats are on routes with no competition, according to Courtney Miller of Visual Approach Analytics, an aviation research firm.

    Signs of strain are showing. Aircraft lessors have reached out to competitor airline executives in recent weeks asking if they would take any of Spirit’s roughly 200 Airbus aircraft, according to people familiar with the matter.
    Aviation analytics firm IBA’s chief economist, Stuart Hatcher, said he would have expected Spirit to be more proactive on dealing with aircraft leases during bankruptcy.
    “If they’re able to strip 10% of all of their lease rates, that would have had a huge impact on cash flow,” he said.
    This doesn’t mean the end of the line for Spirit.
    “There’s a lot of incentive to keep airlines alive because there’s a lot of constituencies that would be hurt badly” like employees, consumers and others, said James Sprayregen, vice chairman of financial services company Hilco Global who represented United Airlines and TWA airlines in their respective bankruptcies.

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    Selling assets

    Even before bankruptcy, Spirit had embarked on a project to sell more upmarket products like roomier seats or bundled fares that include seat assignments and baggage, to better compete with larger rivals that have enjoyed a windfall from big-spending customers post-pandemic.
    More recently, the carrier has said it is seeking to sell assets like planes, leases and real estate to raise cash. It has also reduced some of its unprofitable flying and last year had announced job cuts and aircraft sales last year to cut costs and raise cash. 
    Spirit CEO Dave Davis told employees in a memo last week that the changes the Dania Beach, Florida-based company is making “will continue to provide consumers the unmatched value that they have come to expect for many years to come.”
    Spirit declined to comment on whether it would file for bankruptcy again or whether lessors are trying to remarket its planes.
    “We will not comment on market rumors and speculation,” Spirit said in an emailed statement. “Spirit Airlines is a critical part of the U.S. aviation industry, and we provide high-value travel options to the communities we serve. We have saved consumers hundreds of millions of dollars, whether they fly with us or not. Our focus is on making the necessary changes to better position the company and build a stronger airline. We remain hard at work on many initiatives to protect our business, valued Team Members, partners and Guests.”

    Travelers wheel luggage toward Spirit Airlines check-in desk at George Bush Intercontinental Airport, Tuesday, Nov. 21, 2023, in Houston.
    Jason Fochtman | Houston Chronicle | Hearst Newspapers | Getty Images

    IBA’s Hatcher said it’s getting to be the wrong time of year — the low season, after the peak summer and before the winter holidays — to place aircraft with other airlines, though pricing has been firm. It’s been even stronger for spare Pratt & Whitney engines. The engines for Airbus A321neos that Spirit uses are renting for $15.8 million a month, up about 50% from 2019, according to IBA data.
    But some warn that even deep cuts can’t always turn an airline around.
    “You have no place to sleep if you burn your bed,” said Brett Snyder, founder of the Cranky Flier travel website, author of a weekly airline industry network analysis and a former airline manager.
    Meanwhile, the carrier already plans to furlough hundreds of more pilots, and both aviators’ and flight attendant unions are bracing employees for worse news ahead.
    “Spirit is in a fragile financial position, likely more so than at any point in the previous 24 months,” the Association of Flight Attendants-CWA, which represents Spirit’s roughly 5,400 cabin crew members, said in a note to the members on Aug. 12, after Spirit’s warning. “Use this time to assess your financial situation and begin strategizing how best to weather the financial impact that flying cutbacks may have on your household.”
    Hundreds of its flight attendants have already taken temporary leaves of absence, which allowed them to keep medical benefits.

    Rough few years

    Spirit has faced other challenges leading up to its bankruptcy filing last year.
    A Pratt & Whitney engine recall grounded many of its aircraft starting in 2023. That same year it reached a deal to merge with fellow budget carrier Frontier Airlines, but shareholders rejected the deal in favor of an all-cash takeover by JetBlue Airways that was ultimately shot down in a federal antitrust case, leaving both carriers on their own.
    Frontier was in merger discussions with Spirit last year just before Spirit’s bankruptcy filing, but those talks fell apart.
    “They’ve squandered every opportunity to make everything work,” Snyder said.
    An oversupply of domestic flights also drove down airfare in recent years, prompting the industry to cut back capacity, and the trend was especially punishing for U.S.-focused carriers. Those low-fare carriers had another problem when wages went up in the wake of the pandemic, upending their low-cost model.
    “I think there may have been a bit of optimism on their part in terms of kind of the strategic reset that they had planned,” said Fitch’s Rohlena. “That then came face-to-face with a harder, harsher aviation environment.”

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    Fix-and-flip real estate investors are pulling back

    Higher interest rates and a fast-shrinking labor market are taking their toll on the fix-and-flip housing market.
    The fix-and-flip market contracted slightly in the second quarter of this year from the first quarter and even more sharply from the second quarter of last year, according to an index from John Burns Research and Consulting and Kiavi.
    Just 30% of flippers reported “good” sales in the second quarter of this year compared to the seasonal norm, down from 38% in the same quarter of 2024.

    Marioguti | E+ | Getty Images

    A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
    Higher interest rates and a fast-shrinking labor market are taking their toll on the fix-and-flip housing market. Investors are starting to pull back, as costs rise and the time it takes to sell their renovated homes lengthens. 

    The fix-and-flip market contracted slightly in the second quarter of this year from the first quarter and even more sharply from the second quarter of last year, according to an index from John Burns Research and Consulting and Kiavi, a lender focused on the real estate investor.
    “Sentiment remains muted, as economic uncertainty, elevated mortgage rates and rising resale inventory weigh on demand for flipped homes,” wrote Alex Thomas of John Burns Research and Consulting, the primary author of the report. 
    The index surveys roughly 400 flippers and measures current sales, expected sales and flipper competition for deals. All of those sub-indices fell last quarter. Days-on-market for flipped homes increased as the supply of both new and existing homes for sale rose. 
    Just 30% of flippers reported “good” sales in the second quarter of this year compared to the seasonal norm, down from 38% in the same quarter of 2024.

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    “I think what our customers are really experiencing, it really comes down to housing velocity and turnover timelines,” said Arvind Mohan, CEO of Kiavi. “They are definitely in the velocity business, and so if it takes them an extra month to complete a transaction, that’s capital that’s tied up in that property that can’t necessarily be freed up for the next investment.”

    Roughly one third of flippers pointed to reduced labor availability due to immigration enforcement and fear-driven absences from jobsites. Labor and material costs for flips hit a record high, but costs as a percentage of sales price were flat.
    “From an ROI perspective, we’re not seeing much change there, right? People are still getting that kind of 30% to 31%,” said Mohan. 
    “We’re definitely seeing the more professional cohorts take a step back, be more conservative, be more choosy, right?,” Mohan said. “If they were going to buy four out of six opportunities a year ago now, they may be buying like two or three out of six just to make sure that they are prepared. As the market resets, they can reset their purchase price and keep the ROI metrics constant.”
    Regionally, flippers in Florida, Northern California and the Southwest rated sales more poorly than flippers elsewhere. 
    “Flippers in these regions face increasing resale supply, significant competition from homebuilders, and rising costs (particularly insurance),” wrote Thomas in the report.
    Flippers are also facing the potential of declining prices, depending on where they’re working. While home prices are still slightly higher nationally than they were a year ago, the gains are shrinking fast, and some markets are solidly negative, especially those that overheated in the first years of the pandemic. 
    Prices in June were just 1.7% higher than June 2024, according to Cotality, which noted that is well below the rate of inflation. Prices were up just 0.1% month to month, which is the slowest monthly gain since 2008.
    As a result, Mohan said lenders like Kiavi are being more careful. 
    “I’ll say definitely, over the last 12 months, we have gotten tighter in our credit box and a little bit more choosier on what types of customers we want to work with in this environment. Things could remain relatively volatile,” he said. More

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    Kansas City Fed’s Schmid shows hesitation about widely expected September rate cut

    Kansas City Federal Reserve President Jeffrey Schmid in a CNBC interview Thursday expressed doubt about lowering interest rates in September, saying there’s more work to do on inflation.
    Schmid is a voter this year on the rate-setting FOMC.

    Kansas City Federal Reserve President Jeffrey Schmid expressed doubt about lowering interest rates in September, saying policymakers still have more work to do on inflation.
    Speaking to CNBC from the Fed’s annual symposium in Jackson Hole, Wyo., Schmid pushed back on market pricing that points strongly to the Federal Open Market Committee lowering its key borrowing rate next month.

    “We’re in a really good spot, and I think we really have to have very definitive data to be moving that policy rate right now,” he said during a “Squawk Box” interview that aired Thursday. “In September, we’ll get around tables and we’ll collaborate and we’ll figure it out, but yeah, I think there’s a lot to be said between now and September.”
    Schmid is a voter this year on the rate-setting FOMC. The Kansas City Fed each year hosts the Jackson Hole gathering, which on Friday will feature Chair Jerome Powell’s closely watched keynote speech.
    The comments come with markets pricing in a nearly 80% chance of a quarter percentage point reduction at the Sept. 16-17 meeting, according to the CME Group’s FedWatch.
    President Donald Trump and other White House officials have been applying aggressive pressure on the Fed to cut, maintaining that tariffs are not aggravating inflation and lower interest rates are needed to spark the housing market and lower government borrowing costs.
    However, Schmid said he’s not convinced that the Fed is making enough progress toward its 2% inflation goal.

    “It seems like that last mile is pretty hard, and I’m one of a lot of folks that believe that there is a real, hard, true cost to that last percent of inflation that’s in the system,” he said. “We might see a tick up. I would say that the inflation number’s probably closer to three than it is two, and I think we’ve got some work to do.”
    Normally outside the political fray, the Fed has found itself at the center of multiple controversies lately, from Trump’s push for lower rates to questions raised over the massive renovation project at two of its Washington, D.C. buildings.
    A new wrinkle emerged Wednesday when Trump and Federal Housing Finance Agency Director William Pulte accused Fed Governor Lisa Cook of mortgage fraud. Pulte alleged on social media and a CNBC interview Wednesday that Cook illegally took out federally backed loans on properties in Michigan and Georgia. Trump demanded that Cook resign, but she said she won’t be “bullied” into leaving her post.
    “We have responsibilities as professionals, inside the Federal Reserve. I’m sure she’ll handle matters as she needs to handle them,” Schmid said of the case.
    Asked about the pressure generally being applied to central bank policy makers, he said: “Great steel is tested by fire. So, so let’s have the conversation. It’s more important, actually, that the American public has an understanding what the Fed is and what it does, and that they have a value proposition about what we do.”
    Minutes from the July meeting released Wednesday showed officials concerned about both inflation and unemployment. Schmid said he thinks the labor market is in “solid” shape. More

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    Disney’s new ESPN flagship streaming app launches Thursday. Here’s what we know

    The new Disney ESPN streaming app is launching Thursday, just in time for the football season.
    The app will offer two subscription plans and grant access to ESPN’s full content slate outside the traditional TV bundle for the first time.
    Plans start at $11.99 per month.

    Disney is launching its new ESPN flagship streaming app Thursday, just in time for the football season, bringing customers the full ESPN suite in one place.
    The entertainment company has been working on the launch of the direct-to-consumer app — which is also named ESPN — for some time. It’s designed to expand access for existing cable subscribers and give sports fans outside the traditional pay TV bundle access to all of ESPN’s content.

    Tune in at 10 a.m. ET: CNBC’s David Faber interviews Disney CEO Bob Iger and ESPN Chairman Jimmy Pitaro about the launch of the new ESPN streaming app. Watch in real time on CNBC+ or the CNBC Pro stream.

    It’s the first time the company is offering all of its linear TV content to customers via streaming.
    Here’s what we know about what the app will look like and how it will work for consumers.

    Plan playbook

    Anyone who currently pays for ESPN through their cable service will have access to the ESPN streaming app.
    For everyone else, the app will come in a variety of options at sign-up.
    Subscribers can buy into the unlimited plan, which grants access to all of ESPN’s networks, for $29.99 per month or $299.99 annually.

    ESPN says this plan will cover more than 47,000 live events annually, including the NCAA championships, the Australian Open, the PGA Championship and more.
    Users can also bundle the ESPN unlimited plan with Disney+ and Hulu for $35.99 a month, including ads, or $44.99 a month without ads.
    At launch, Disney will offer that same bundle at a promotional price of $29.99 per month, with ads, for the first year.
    There’s also another bundle on the way, in October. ESPN and Fox Corp. are teaming up to offer their direct-to-consumer streaming services as a combined offering.
    Fox’s service, called Fox One, also debuts Thursday and includes all Fox content including news and sports. It costs $19.99 a month on its own.
    The ESPN and Fox One bundle will be available on Oct. 2 for $39.99 per month. However, customers of the pay TV bundle will receive access to each of the streaming apps at no additional cost.

    What’s next for ESPN+

    Short of the ESPN unlimited offering, the company is also debuting its ESPN select tier.
    This plan features access to all content available on the existing ESPN+ service, including live sports streaming, a library of exclusive studio shows and original content and on-demand game replays.
    ESPN says this plan will cover more than 32,000 live events annually.
    It will cost $11.99 per month or $119.99 annually.
    Customers can also purchase the Disney+, Hulu and ESPN select bundle, which includes ads, for $16.99 per month, or a no-ads option for $26.99 per month.
    ESPN+ was the sports network’s first foray into streaming, launching in 2018 as a separate app that has exclusive content outside the TV network. While it has some live game simulcasts, it’s never housed the bulk of ESPN’s content.
    ESPN+ had 24 million subscribers as of Disney’s most recent earnings report.
    Existing ESPN+ customers will automatically become subscribers of the ESPN select plan under the new service, the company has said.
    Customers with existing subscriptions to the streaming bundles will be able to watch ESPN content on Disney+ alongside the other programming.

    Bulking up content

    ESPN’s streaming service will include all of the network’s live games, along with programming from ESPN2, the SEC Network and ESPN on ABC. In addition, it will feature fantasy products, new betting tie-ins, studio programming and documentaries, among other kinds of content.
    The network recently signed two deals to bolster its sports offerings.
    In early August, ESPN said it was entering a partnership with the WWE for the U.S. rights to the wrestling league’s biggest events, including WrestleMania, the Royal Rumble and SummerSlam. CNBC reported ESPN will pay an average of $325 million per year for five years of rights. On Wednesday, ESPN and WWE said that deal starts immediately, earlier than previously announced.
    ESPN also reached a deal this month with the National Football League to acquire the NFL Network in exchange for the pro football league taking an equity stake in ESPN.
    — CNBC’s Alex Sherman and Lillian Rizzo contributed to this report. More

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    Chipotle teams up with Zipline to test drone delivery

    Chipotle is teaming up with drone delivery leader Zipline for a pilot of autonomous food delivery.
    Starting Thursday, select customers in the greater Dallas area will have the option to use so-called Zipotle delivery through its early access program in the Zipline app. 
    The move could resonate with younger consumers, who lean more heavily on delivery, as Chipotle tries to kickstart sales following a slow quarter for fast-casual chains.

    Chipotle is teaming up with drone delivery leader Zipline to test autonomous food delivery.
    Beginning Thursday, select customers in the greater Dallas area will have the option to use the so-called Zipotle delivery through an early access program in the Zipline app. Zipline’s autonomous aircraft will deliver orders to customers’ homes from a Rowlett, Texas Chipotle location.

    A small number of Zipline users will be able to order the full Chipotle menu to start, with a broader service launch in the weeks to come for more users. Any potential expansions in the future would be based on learnings from the test.
    Employees will place the order into a Zipping Point, which allows aircraft to autonomously pick up the order for delivery. After flying to its destination, the aircraft will hover about 300 feet in the air, while the Zip, a droid, lowers to the ground.
    “The exciting thing about drone delivery is we don’t need to have specific drone locations at every restaurant to make this effective,” Curt Garner, president and chief strategy and technology officer at Chipotle, told CNBC in an interview. “Because of the coverage radius of drones, it might only be one restaurant in a particular neighborhood that can service the entire neighborhood. So that makes national expansion easier, finding those locations and then equipping them with Zipline.”

    Zipline delivering a Chipotle meal.
    Courtesy: Zipline

    The drone delivery option could resonate with a younger consumer base, which is already key for Chipotle and its future growth.
    “I think the younger consumer remains an enormous market opportunity for us. They’re the biggest fans of Chipotle already,” Garner said. “They do skew higher to delivery than older consumers, and they’re a curious group of people that want to try new things. And based upon how many younger people live together in apartments or in shared housing, drone delivery is a really good option.”

    The move comes as Chipotle and other fast-casual restaurants hit a sales slowdown. Chipotle reported that same store sales fell 4% in its most recent quarter as traffic declined. Its slow quarter came as the broader restaurant industry faced a pullback.
    But Chipotle executives told analysts the chain’s sales trends are turning around. Starting in June, customers had been returning to Chipotle restaurants, thanks to its summer promotions and the launch of its Adobo Ranch dip, CEO Scott Boatwright said.
    Zipline is launching Chipotle deliveries with its Platform 2 models, which are insulated to withstand rain, cold and heat. The company has said they are also fast and quiet.
    Initially, the “Zipotle” delivery service will carry orders up to 5.5 pounds, which will increase to eight pounds over time. The delivery is a $2.99 flat cost, plus a 15% service fee capped at $6, Garner said. “Zipotle” will operate seven days a week from 12 p.m. to 8 p.m. CT, with plans to expand to 10 p.m. CT.
    Zipline, a CNBC Disruptor 50 company, says it operates on four continents, makes a delivery somewhere in the world every 60 seconds, and serves more than 5,000 hospitals and health facilities. It says it has flown more than 100 million commercial autonomous miles.  
    “It’s a better product experience. It’s better for the environment, it’s less expensive, and importantly, it also increases access,” Zipline CEO Keller Rinaudo Cliffton told CNBC.
    Food delivery by drone may expand further soon. Zipline said it will be working with Sweetgreen to determine timing and locations for a future launch.  More