Economy

U.S. employers announced 172,017 layoffs for February, up 245% from January and the highest monthly count since July 2020, Challenger, Gray & Christmas reported.
More than one-third of the total came from billionaire entrepreneur Elon Musk’s efforts to reduce the federal headcount. Challenger put the total of announced federal job cuts at 62,242.

Recently fired U.S. Agency for International Development (USAID) staff carry boxes with a message as they leave work and are applauded by former USAID staffers and supporters during a sendoff outside USAID offices in Washington, D.C., U.S., February 21, 2025.
Brian Snyder | Reuters

President Donald Trump’s efforts to pare down the federal government workforce left a mark on the labor market in February, with announced job cuts at their highest level in nearly five years, outplacement firm Challenger, Gray & Christmas reported Thursday.
The firm reported that U.S. employers announced 172,017 layoffs for the month, up 245% from January and the highest monthly count since July 2020 during the heightened uncertainty from the Covid pandemic. In addition, it marked the highest total for the month of February since 2009 during the global financial crisis.

More than one-third of the total came from billionaire entrepreneur Elon Musk’s efforts, with Trump’s blessing, to reduce the federal headcount. Challenger put the total of announced federal job cuts at 62,242, spanning 17 agencies.
“With the impact of the Department of Government Efficiency [DOGE] actions, as well as canceled Government contracts, fear of trade wars, and bankruptcies, job cuts soared in February,” Andrew Challenger, the firm’s workplace expert, said in the release.
January’s planned reductions brought the total through the first two months of the year to 221,812, also the highest for the period since 2009 and up 33% from the same time in 2024.

The report comes amid heightened concern about the state of the labor market and the economy in general as Trump’s plans for tariffs, slashing the size of government and mass deportations and stringent immigration restrictions take shape.
There has been a slew of mixed indicators about where things are heading, with consumer surveys showing concern over inflation and layoffs while other data shows economic strength continuing. Payrolls processing firm ADP reported Friday that private sector hiring grew by just 77,000 in February.

According to the Challenger report, it’s not just government cutting back.
Retail saw 38,956 cuts for the month as companies such as Macy’s and Forever 21 announced sharp staff reductions. The sector’s cuts in 2025 are up nearly six-fold from where they were in 2024. Technology firms also listed another 14,554 in reductions, though the sector’s cuts are actually lower from a year ago.
On the upside, firms announced plans in February to hire a total of 34,580 new workers, putting the year to date total up 159% from a year ago.
Initial unemployment claims have perked up in recent weeks, particularly in Washington, D.C., with its large share of government workers.

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Taiwan Semiconductor Manufacturing Company said it was “not afraid” of losing Washington’s subsidies for its massive US investments, as the chief of the world’s largest chipmaker sought to reassure investors following US President Donald Trump’s call to kill the $52bn chips act. “Even if we don’t get any subsidies at all, we are not afraid of that,” TSMC chair and chief executive CC Wei said on Thursday at a joint press conference with Taiwan’s president Lai Ching-te. “Honestly, I only demand fairness. We are not afraid to compete,” he added. His comments come just days after TSMC pledged an additional $100bn investment in the US, boosting capacity in the country in a move designed to placate Trump and head off threatened tariffs on chip imports.A day later, Trump called on Congress to eliminate the US Chips Act, under which the Biden administration agreed to support TSMC’s previously pledged $65bn investments with $6.6bn in public funds.In his Tuesday night State of the Union address, Trump said about TSMC that “all that was important to them was they didn’t want to pay the tariffs”. He added: “So they came and they’re building . . . We don’t have to give them money.”On Thursday, the TSMC chief evaded the question whether the company had received a guarantee from Trump that the subsidies would remain in place in exchange for its additional commitment. He added that TSMC’s “grand alliance” with all other parts of the chip supply chain and its single-minded focus on the needs of its customers, rather than government support, were the reasons that it surpassed its rivals.The joint press conference with Taiwan’s president was aimed at allaying fears that TSMC’s additional US investments would undermine the company’s commitment to Taiwan.Back home, TSMC is widely referred to as the “sacred mountain that protects the nation”, reflecting the belief that other democracies will be more willing to defend Taiwan against a potential Chinese attack as long as they remain highly dependent on chip supplies from the country. TSMC produces more than 90 per cent of the world’s most advanced semiconductors.So far all of those are made in fabrication plants, or fabs, in its home country, but it plans to start offering the most advanced process technology in the US from 2028.Under the new deal announced with Trump on Monday, the company has sharply increased its capacity expansion plans for the US and even pledged to set up a research and development unit there, which it previously resisted.In contrast to competitors Samsung and Intel, TSMC only manufactures chips to the designs of other companies. This model has enabled other chipmakers to exit manufacturing and focus on design, in turn giving TSMC a continuously growing market share.Wei said TSMC’s new US investment would not come at the expense of its home country. The company is building 11 new fabs in Taiwan, compared with five new factories over the next four years promised to Trump. The TSMC chief clarified that the R&D unit in the US would be focused on improving process technology that has already entered production. The “real R&D” of developing next-generation manufacturing technology would remain at the global R&D centre in Taiwan, 10 times the size of the US unit with 10,000 engineers. More

This article is an on-site version of our Energy Source newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday and Thursday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersHello and welcome to Energy Source, coming to you from New York.US President Donald Trump has made adjustments to his tariffs on imports from Canada and Mexico, as he gave a one-month reprieve for carmakers. US commerce secretary Howard Lutnick said the president would “consider” relief for certain other sectors.But the fallout from an escalating trade war already caused oil prices on Wednesday to drop for the third day in a row, falling 3 per cent to its lowest level in three years. My colleague Jamie Smyth interviewed the chief executive of TC Energy, one of the largest pipeline companies in North America, who said Trump’s tariffs on Canadian and Mexican oil and gas would fuel inflation, particularly on US petrol prices, and threaten energy security. Our first item today features a warning from Switzerland’s industrial giant ABB that tariffs will trigger inflation and reduce investment in the US’s top trade partners. Our second item takes a closer look at a new study that found more than half of the world’s greenhouse gas emissions in 2023 were linked to just 36 fossil fuel and cement producers.Thanks for reading — Alexandra Swiss industrial giant warns Trump tariffs will create an ‘inflationary environment’US President Donald Trump’s sweeping tariffs on Canada and Mexico will create an “inflationary environment” and reduce investment in the country’s top trade partners, Switzerland’s industrial giant ABB has warned. Morten Wierod, the chief executive of ABB, told Energy Source that the tariffs would increase the price of “everything” and that free trade was the “most efficient” way to operate. “It will lead to a more inflationary environment because these tariffs will be paid by the people that are going to buy these products. There’s nobody else to pay for it,” said Wierod. Wierod added that the tariffs would result in the reduction of ABB’s employment and investments in Mexico and Canada. Eighty per cent of the goods the Swiss giant sells in the US are produced in the country and it plans to boost the percentage higher. Earlier this week, it announced a $120mn investment to expand electrical equipment production in the US. The warning from Wierod arrives amid mounting concern from businesses and consumers that Trump’s decision to impose 25 per cent tariffs on Canada and Mexico will trigger massive disruptions in the world’s largest economy. The US relies on Canada and Mexico for grid equipment and crude imports to produce petrol and diesel in its refineries. The US Midwest and north-east also consume significant amounts of hydropower from Canada. Earlier this week, Canadian politicians threatened to issue retaliatory tariffs on exports to the US or cut off supplies of electricity. The US imported more than $110bn in fossil fuel, electricity and clean tech from Canada last year, according to BloombergNEF. The tariffs on electricity and grid equipment arrive as the US witnesses historic growth in electricity demand driven by the race to lead in artificial intelligence, the onshoring of manufacturing, and electric vehicle adoption. “Tariffs are bad for all American manufacturing . . . They’re a pressure on the economy that’s really hard to ignore,” said a top official at an energy trade association.Analysts warned that the tariffs would raise prices for ratepayers and complicate the president’s goals to slash electricity costs by 50 per cent early in his second term. “He seems to be basically doing the opposite of what would be required to bring energy prices down,” said Antoine Vagneur-Jones, head of trade and supply chains at BloombergNEF. (Amanda Chu)Only 36 companies account for half of global emissions in 2023More than half of the world’s greenhouse gas emissions in 2023 can be linked to just 36 fossil fuel and cement producers, according to a report from the Carbon Majors database. The climate watchdog found that emissions from the world’s largest oil, gas, coal and cement producers increased in 2023, with state-owned companies making up 16 of the top 20 emitters.The top five state-owned emitters — Saudi Aramco, Coal India, CHN Energy, National Iranian Oil Company and Jinneng Group — accounted for nearly a fifth of all global emissions in 2023. The top five investor-owned emitters — ExxonMobil, Chevron, Shell, TotalEnergies and BP — made up 5 per cent of emissions. Emmett Connaire, senior analyst at Carbon Majors, said many climate accountability cases worldwide were being brought against investor-owned companies.“For state-owned companies, it’s not like western governments can sue them for their emissions as they’re under direct control of nation states,” said Connaire. The group’s report arrives as countries backpedal on their climate commitments and oil and gas producers double down on fossil fuels almost 10 years after the Paris climate agreement. The report’s findings are based on a database that traces the emissions from production and combustion of products from 180 of the largest oil, gas, coal and cement producers from 1854 to 2023. The organisation’s data has been used by activists in litigation against fossil fuel producers and has helped shape climate legislation. Vermont, which became the first US state to charge oil companies for climate change damages, used data from the Carbon Majors database in its “climate superfund” law. Chinese companies contributed more to emissions than any other country. The group also found that eight Chinese companies were responsible for 17 per cent of global emissions in 2023, largely because of coal, which is the largest source of emissions. Although emissions from coal and cement producers increased in 2023, natural gas emissions declined by nearly 4 per cent while emissions from oil companies remained steady.Emissions increased the most in Australia, Asia and North America, growing 11 per cent, 6 per cent and 3 per cent, respectively, from 2022. In comparison, emissions declined 4 per cent in Europe and increased less than 1 per cent in the Middle East. (Alexandra White)Job movesGianluca Bacchiocchi has rejoined law firm Clifford Chance as a partner in its global financial markets team as the firm expands its energy and infrastructure financing capabilities. The Center for International Environmental Law has appointed Rebecca Brown as president and chief executive. Most recently Brown served as vice-president of global advocacy at the Center For Reproductive Rights. The American Clean Power Association named Tara McGee as senior director of federal affairs for tax and trade. McGee recently served as tax and trade policy adviser to US Senator Shelley Moore Capito. BP plans to hire two new directors as part of its pivot back to oil and gas. The move suggests the company will have significantly more directors than the average 10-person FTSE 100 board.Power PointsEnergy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.Recommended newsletters for youMoral Money — Our unmissable newsletter on socially responsible business, sustainable finance and more. Sign up hereThe Climate Graphic: Explained — Understanding the most important climate data of the week. Sign up here More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldComing, ready or not. The battle plans drawn up by the US’s trade antagonists — ie everyone — are being tested. Donald Trump’s trade war has begun. How can trading partners respond?Canada and Mexico are executing their strategies as planned. Canada has imposed the first round of tariffs on a pre-announced list of US products. Mexico will retaliate if Trump doesn’t lift the tariffs by the weekend.All fine, and politically sound, as evinced by the upsurge of patriotic pride in both countries. But the traditional mercantilist retaliation of hitting exports has limits. The US under Trump doesn’t work in conventional ways. Nor, except for Canada and Mexico’s display of mutual solidarity, is there much sign of international co-ordination to resist Trump’s tariffs proliferating.Traditional retaliation is a practised game. You stick tariffs on products from politically sensitive states such as bourbon from Kentucky, home state of former Republican Senate leader Mitch McConnell, then wait for senators and congressmen to complain to the White House.That seems unlikely to work well with Trump. He has arrogated to himself power over trade (and much else) from its traditional locus on Capitol Hill. Like any good demagogic populist, Trump thinks he has a direct connection to the American people. A remarkable academic study showed his first-term tariffs gained votes even if they did economic damage. The US is in any case a relatively self-sufficient economy. The average of exports and imports of goods and services was 12.7 per cent of GDP in 2023 compared with 22.4 per cent for the EU, 32.8 per cent for the UK and 44.7 per cent for South Korea. America’s growth model isn’t exactly export-led. It runs a chronic trade deficit and a third of its exports are services, which are harder for trading partners to block than goods. Regarding international co-ordination, the US’s main trading partners — Canada, Mexico, China, the EU, India, Japan, South Korea and the UK — seem too economically and politically disparate to act collectively. The EU is Trump’s probable next big target, but any feelers Brussels has put out for co-ordination haven’t had much response. Other countries including Japan and South Korea remember how the EU negotiated a relatively good deal for itself to avoid steel and aluminium tariffs in Trump’s first term rather than creating an international coalition. China has tried a diplomatic solidarity-building initiative in the EU, but there are too many existing frictions over electric vehicles and the like to form a durable alliance.In any case, it’s hard to imagine any one action that could unite the EU with other trading partners. Some policymakers have suggested singling out Tesla for restrictions to hurt Elon Musk. But most Teslas sold in the EU are built in China (and some in Germany), which would hurt the company but not American production.Brussels could make regulatory moves against US tech companies but those are unique to EU legislation. The EU’s ability to retaliate quickly is in any case in question. The (as yet untested) anti-coercion instrument it has designed for circumstances such as these would probably take months to deploy. In reality, this would be an excellent time for everyone to forget their mercantilism and remember their economics. Tariffs mainly hurt the country that imposes them, and not just by pushing up consumer prices. They also disrupt value networks by restricting supplies of industrial inputs, including semi-finished goods. It’s doubtful that Trump cares much about voters in Michigan for their own sake. But his decision yesterday to reprieve car companies from the Canada and Mexico tariffs clearly indicated his fear of the terrible optics if cross-border auto production chains ground to a halt.The tariffs Trump is pursuing are far bigger than those in his first term — and the more he stops supply chains finding new routes to the US, which blunted their effect on that occasion, the worse the economic damage will be.Canada could inflict real damage by disrupting US imports, not exports, especially of energy supplies, including even electricity. The oil-rich province of Alberta predictably dissents. But if Trump is serious about turning Canada into the US’s 51st state, Albertans might think beyond the next quarter’s hydrocarbon exports. The US economy isn’t in great shape to take a bunch of self-inflicted blows. Expectations of the effect of tariffs — and of policy uncertainty more generally — are already evident. Business and consumer confidence is weakening, consumers’ inflation expectations are rising, the stock market has had a bad time and there have been some well-publicised price shocks like eggs, whether tariff-related or not.The dollar has fallen, with lower growth expectations apparently outweighing the usual currency-appreciating effect of tariffs. Targeted hits on the profits of those bourbon distillers aren’t going to restrain Trump. A full-on recession and stock market correction might. It’s unrealistic to expect a co-ordinated international trade response to Trump, at least in the short term, or for traditional retaliation to force him into retreat. But if early signs of economic weakness and the long history of tariffs are good indications, his protectionism will be his and the US’s own worst enemy.alan.beattie@ft.com More

Private companies added just 77,000 new workers for the month, well off the upwardly revised 186,000 in January and below the 148,000 estimate, ADP reported.
The report reflected tariff concerns, as a sector that lumps together trade, transportation and utility jobs saw a loss of 33,000 positions.
On the positive side, leisure and hospitality jobs jumped by 41,000, while professional and business services added 27,000 and financial activities and construction both saw gains of 25,000.

A person exits a Home Depot store in Midtown Manhattan on February 26, 2025 in New York City. 
Eduardo Munoz Alvarez | Corbis News | Getty Images

Private sector job creation slowed to a crawl in February, fueling concerns of an economic slowdown, payrolls processing firm ADP reported Wednesday.
Companies added just 77,000 new workers for the month, well off the upwardly revised 186,000 in January and below the 148,000 Dow Jones consensus estimate, according to seasonally adjusted figures from ADP.

The total was the smallest increase since July and comes at a time when worries are rising that economic growth is slowing and worries brew that President Donald Trump’s tariff plans will spark another round of inflation. ADP said annual pay rose 4.7% in February, the same as the prior month.
“Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month,” said ADP chief economist Nela Richardson. “Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”
Though most economic data points remain positive, sentiment indicators have shown rising fears among both business executives and consumers that the Trump tariffs could raise prices and slow growth. In the extreme scenario, the combination could cause stagflation, a condition of flat or negative growth and rising prices.
The ADP report reflected some of those concerns, as a sector that lumps together trade, transportation and utility jobs saw a loss of 33,000 positions. Education and health services reported a decline of 28,000, while information services decreased by 14,000 at a time of uncertainty for artificial intelligence-related companies, despite Trump’s commitment to advancing AI efforts.
On the positive side, leisure and hospitality jobs jumped by 41,000, while professional and business services added 27,000 and financial activities and construction both saw gains of 25,000. Manufacturing also reported an increase of 18,000, countering the ISM manufacturing survey for the month that indicated companies were pulling back on hiring.

Services and goods-producing were in unusual balance for the month, adding 36,000 and 42,000 respectively on the month. As the U.S. is a services-based economy, that side usually dominates in job creation.
Employment growth tilted towards large firms in February, with companies employing 500 or more workers reporting a gain of 37,000 while those with fewer than 50 employees saw a loss of 12,000.
The ADP count serves as a precursor to the Labor Department’s Bureau of Labor Statistics report on nonfarm payrolls, due Friday. However, the two reports can differ substantially due to different methodologies. In January, the BLS reported an increase of just 111,000 in private payrolls, well below the ADP count.
Economists surveyed by Dow Jones expect Friday’s report to show job gains of 170,000 and an unemployment rate steady at 4%. More

Germany’s prospective fiscal U-turn could prove transformational for the country’s struggling economy and European defense.
Leaders of the likely incoming coalition government on Tuesday announced plans to reform the debt brake and create a special investment fund.
Market reaction has widely been positive, with economists and analysts describing the move as ‘historic’ and a ‘game changer.’

Markus Söder (l-r), Chairman of the CSU and Minister President of Bavaria, Friedrich Merz, candidate for Chancellor of the CDU/CSU, Chairman of the CDU/CSU parliamentary group and Federal Chairman of the CDU, Lars Klingbeil, Chairman of the SPD parliamentary group and Federal Chairman of the SPD, and Saskia Esken, Party Chairwoman of the SPD, hold a press conference on the exploratory talks between the CDU/CSU and the SPD.
Kay Nietfeld/dpa | Picture Alliance | Getty Images

Germany’s prospective fiscal U-turn could prove transformational for the country’s struggling economy and for European defense — but Berlin lawmakers don’t have much time to make the historic shift happen.
Fiscal and economic policies were seen as highly contentious during Germany’s previous ruling coalition and contributed to its eventual break-up at the end of last year. Amid ongoing negotiations for a new governing alliance, the Christian Democratic Union and its Christian Social Union affiliate — which led in the February polls — and the Social Democratic Party appear to have achieved something of a breakthrough.

On Tuesday, likely-to-be chancellor Friedrich Merz and other political leaders announced plans to reform the long standing fiscal pillar known as Germany’s debt brake, specifically to allow for higher defense spending. They also revealed a new 500 billion euros ($535 billion) special fund for infrastructure.
Materializing these plans will mean changes to the German constitution, which requires the support of a two-thirds majority in parliament. This would likely work at present — but would be very difficult to achieve once the newly elected parliament representatives come together for the first time later this month.
A vote on the constitutional tweaks could therefore be pushed through within the week.

‘Big, bold, unexpected — a game changer’

“Big, bold, unexpected – a game changer for the outlook,” Bank of America Global Research economists and analysts said in a Wednesday note, adding that the package “meaningfully” changed the outlook for Germany’s economy.
For a couple of years now, Germany’s economy has been sluggishly teetering on the edge of a technical recession, defined as two consecutive quarters of gross domestic product declines. The national GDP has been alternating between expansion and contraction in each quarter throughout 2023 and 2024.

The country is facing a wide range of issues, including infrastructure problems, a struggling housebuilding sector and pressure on some of the industries that have historically strongly contributed to its growth, such as autos.
There is now hope for change. The planned special investment vehicle could benefit the country’s economy, experts believe.
Markets can expect an economic boost and Germany’s growth estimates could likely be increased, Florian Schuster-Johnson, senior economist at Dezernat Zukunft, told CNBC’s “Street Signs Europe” on Wednesday.
“I think in the short term this will just boost domestic demand obviously because there will be a lot of demand for people building these new infrastructures and companies that [are] getting new government orders now,” he said.
Higher defense spending could also have a long-term effect on the economy, leading to increased production capacities that could eventually also come into civil use, Schuster-Johnson added.
It could push Germany above the current NATO target of spending 2% of GDP on defense, Deutsche Bank Research economists said Tuesday.
“Tonight’s robust rhetoric implies that the open-ended borrowing room for defence will be used at a pace that could bring German defence spending to at least 3% perhaps as early as next year,” they said.
Merz suggested that geopolitical developments showed that major measures need to be taken to strengthen Germany’s and Europe’s security and defense capabilities.
“In light of the threats to our freedom and peace on our continent, ‘whatever it takes’ now also needs to apply to our defense,” he added, according to a CNBC translation.
While the policy announcements would largely be beneficial, other fiscal and budget plans from the likely new coalition are still to come and could have their own impact on Germany’s economy, ING’s global head of macro Carsten Brzeski noted.
“We wouldn’t rule out that the official coalition talks will still bring some expenditure cuts, which would lower the positive impact of the announced fiscal stimulus,” he said.

Policy details

Going over the details, the 500 billion euro special investment fund will not be part of the federal budget, but it will be financed through credit without contributing to new debt. The funds are set to be used over 10 years, focusing on transport, energy, education, civil protection and other infrastructure. Federal states will also be allocated some of the funds to support their finances.
To avoid the cash being subject to the debt brake, the fund will be rooted in the constitution and exempted from the fiscal rule.
As it stands, the debt brake limits how much debt the government can take on, and dictates that the size of the federal government’s structural budget deficit must not exceed 0.35% of the country’s annual GDP.
One key change under the new plan is that defense spending that goes beyond 1% of Germany’s GDP will not be counted towards the debt brake cap, meaning that such expenses will no longer be limited.
Germany’s states will also be allowed to take on more debt than previously, and long-term proposals to modernize the debt brake and strengthen investments will also be undertaken.
The proposed debt brake overhaul also mark a major shift from the CDU-CSU’s election campaign, during which the parties repeatedly positioned themselves as wanting to stick with the Angela Merkel-era rule. Merz eventually suggested he may be open to some reform.

Market reaction

The plans have sparked a widespread market reaction, with the German DAX jumping 3.4% by 12:51 p.m. London time, as German companies led the pan-European Stoxx 600 higher. Construction and manufacturing firms notched significant gains, as did German lenders.
German borrowing costs soared. The yield on German 10-year bonds, which are seen as the euro zone benchmark, were last up by over 25 basis points, and the 2-year yield spiked by more than 16 basis points.
Dezernat Zukunft’s Schuster-Johnson told CNBC the market reaction suggested surprise at the pace and magnitude of the proposed changes.
“The bottom line is Germany is back and Germany is funded,” he said. “This move we’ve seen last night is really remarkable. you know Germans sometimes move late and sometimes delayed when big steps are needed however this is a big step and when they take it they do it so very radically.” More