Member Briefing April 7, 2025
March Employment Plus 228k - A Last Hurrah?
The March employment report generally was encouraging. A 228K increase in nonfarm payrolls topped expectations and more than offset downward revisions to job growth in prior months. The breadth of job growth across industries looked healthy, and the increase in the unemployment rate from 4.1% to 4.2% was mostly a rounding effect. On balance, it was a solid but unspectacular jobs report.
Friday's employment report, however, feels more dated and backward-looking than usual. The sharp escalation in trade tensions this week have fundamentally altered the economic outlook. Coming into the week, our economic forecast already contained assumptions for higher tariffs, slower economic growth and three 25 bps rate cuts by the FOMC this year. That said, our tariff assumptions were still well-below what President Trump announced this week. Accordingly, the outlook for the U.S. labor market going forward is less sanguine than it was one month ago. There already have been hints in the data that labor demand is cooling on trend, and this week's policy developments add further weight to that argument.
S&P 500′S 10% 2-Day Collapse From Trump’s Tariff Shock Ranks Among The Deepest In History
Financial markets that spent two years anticipating a recession that never came took two days to price in surging odds of a recession that might come by invitation. With one of the nastiest two-day selloffs in history following President Donald Trump’s launch of punitive tariffs on most trading partners, the stock market is in one of those precarious spots: Both tightly coiled for a near-term bounce soon, but not quite priced for the full fundamental implications of this policy as now contemplated.
The 10% Thursday-Friday collapse in the S&P 500, taking it 17.4% below its Feb. 19 record high, ranks among the deepest two-day declines in more than 70 years: October 1987 (Black Monday), November 2008 (post-Lehman collapse) and March 2020 (the Covid crash). Not all were at an absolute low, but fierce rallies ensued soon afterward each time. After Friday’s wretched close, Jason Hunter, technical strategist at JP Morgan, offered some perspective on how bearish phases tend to unfold: “Even if the equity market has fallen into a recession-driven bear market, which seems like a reasonable mode of operation unless we see a sharp shift in the news flow, past bear markets didn’t often materialize in straight lines… We suspect the market can stage a bear market rebound from that support over the near-term, but believe that lift will be contained and potentially short-lived unless the news flow sees a dramatic change.”
A ‘Wobbly’ Moment In Business: Manufacturers Face Life Under Trump’s Tariffs
Now that the president has imposed a slew of new tariffs, including a 10% baseline tax on all imports, the industry is trying to understand how the policies could impact both supply costs and consumer demand. Industry groups were mixed in their reactions to the tariffs. Some, like the American Iron and Steel Institute, reacted positively, saying “government action to address this unloading of steel overproduction on world markets is overdue.” Others, such as the Plastics Industry Association, pushed for targeted tariffs, rather than across-the-board measures that disrupt supply chains and increase production costs.
The administration’s evolving tariff strategy makes it difficult for companies to make significant supply chain shifts, for fear policies could quickly change, Dan Brumlik, co-founder and co-chairman at The Partner Cos., said in the days leading up to what Trump dubbed “Liberation Day” on April 2. “It’s just a very wobbly moment in business,” Brumlik said. “It’s been stated that this is purely a negotiating strategy to get others to the table for trade talks, and if you set up the system based on tomorrow’s tariffs and a month later they change it, how do you respond?” The Partner Cos., which has manufacturing locations across the U.S., Mexico, China and Wales, is working to offer in-country manufacturing when possible to avoid tariffs, and to give customers as much flexibility as possible.
Read more at Manufacturing Dive
Global Headlines
Middle East
- Trump Wants Direct Talks With 'Vulnerable' Iran - Newsweek
- Israel Expands Gaza City Ground Offensive, Steps Up Bombing Of Syria And Lebanon – France 24
- In Southern Syria, Israel Is the Power That Matters - WSJ
- Iran and U.S. Threat of War: Seven Signs To Watch - Newsweek
- Far From Being Cowed By US Airstrikes, Yemen’s Houthis May Be Relishing Them - CNN
- The Tank Commander Now Running Israel’s Military Sees A Year Of War - WSJ
- Israel Has Turned Two-Thirds Of Gaza Into No-Go Zones, UN Says – Al Jazeera
- Hungary Welcomes Netanyahu And Says It Will Leave The International Criminal Court – France 24
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- U.S. Patience on Ukraine Is Running Out, Rubio Warns Russia – NYT
- Putin's Envoy Says New Russia-U.S. Contacts May Continue Next Week – US News
- Russian Attack On Zelensky’s Home City Kills 19 People, Including 9 Children - CNN
- Russia Strikes Kyiv as Ukraine Reels From Deadly Attack on Zelensky’s Hometown - NYT
- Rubio Stressed Trump Won't Cross Ukraine's Red Lines With Putin - Newsweek
- Officials Say A Russian Strike In Central Ukraine Kills 14 People, Including Six Children - AP
- Ukraine Still Holds Land In Russia And Is Actually Expanding, Top US General Says - Politico
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- Le Pen Evokes Spirit Of Martin Luther King Jr. As Supporters Rally In Paris – Reuters
- South Korea’s Democracy Shows ‘Remarkable Resilience’ As Yoon Ousted By Court - SCMP
- Donald Trump's Tariffs May Be a Win for China - Newsweek
- Haiti Gangs Storm Town And Release 500 Inmates From Jail - BBC
- The Alaskan Island On The Front Lines Of The Arctic Scramble – The Economist
- 'Don't Speak, Don't Film': Journalist Arrests Fuel Fears For Democracy After Turkey Protests - BBC
- Spain Bans 'Golden' Investor Visas For Non-EU Citizens In Bid To Curb Housing Crisis – France 24
- Russia: World Economy ‘In Turmoil’ – The Hill
- Space Race Intensifies Between EU, US, Russia And China – France 24
- Pope Francis Greets Crowds At Vatican In First Appearance Since Leaving Hospital - CNBC
- Waking Up With A Banksy On Your Wall: The Differing Fortunes Of Two Homeowners - BBC
Policy and Politics
Senate GOP Passes Budget Plan, Setting Up A Critical Next Phase For Trump Agenda
After a flurry of overnight votes, the Republican-led Senate has approved a revised framework for a sweeping budget plan that is critical to President Trump's domestic agenda. The 51-48 vote in the early morning hours on Saturday brings congressional Republicans one step closer to finalizing a sweeping multi-trillion dollar plan to address defense, energy, immigration and tax policy.
Republicans in the House and Senate need to pass identical versions of a budget resolution in order to get access to reconciliation, a feature of the budget process that allows them to pass other policies and avoid a filibuster by Senate Democrats. But they still face an uphill battle, as there are already signs of trouble in the House over details of the Senate framework. Here is a quick look at what the Senate plan would accomplish, and what to expect in the days ahead as lawmakers move to the next phase.
Powell Warns of Higher Prices, Weaker Growth After Tariff Plan
Federal Reserve Chair Jerome Powell said the U.S. economy was likely to face a period of higher prices and weaker growth than seemed possible a few weeks ago because of larger-than-anticipated tariff hikes announced by President Trump. His remarks carried an undercurrent of caution about how the central bank would be able to address any fallout because the central bank will want to ensure one-time price increases don’t lead to persistently higher inflation.
While Powell acknowledged “downside” risks of weaker growth had increased, he said it was too soon to say how the central bank would adjust interest rates to cushion the economy from the blow of weaker global trade. “While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected,” and the economic fallout of higher prices and slower growth is also likely to be larger than expected, he said.
NY Lawmakers Pass Second Budget Extender Amid Talks With Hochul
Gov. Kathy Hochul racked up her first budget win on Thursday after Assembly Speaker Carl Heastie told reporters that her bell-to-bell school cellphone ban was the first piece of policy mostly settled in the spending plan. But the budget is already three days late, and Hochul indicated she’s willing to go even later as she defended her fourth consecutive missed budget deadline. A source familiar with the state of negotiations also confirmed that the governor had reached an agreement with legislative leaders on the cellphone ban, one of her marquee policy items for the year original proposal “with some tweaks.”
Much of the budget remains in a state of limbo as lawmakers went home for the weekend after approving a second budget extender, which will last through today. But Heastie said that, at the very least, the first of Hochul’s four top policy priorities is settled. “I would say cellphones is just about done,” Heastie told reporters Thursday afternoon, adding that he and state Senate Majority Leader Andrea Stewart-Cousins had agreed to the governor’s
Trump’s First 100 Days
- Donald Trump's Approval Rating Falls to New Low With Republican Pollster - Newsweek
- GOP Senators Express Alarm Over Scale Of Trump Tariffs – The Hill
- Poll: AOC Leads Schumer In Head-To-Head New York Primary Matchup By Double Digits - Politico
- Deloitte to Lay Off U.S. Consultants After Government Cost Crackdown - WSJ
- Federal Employee Unions Sue Over Trump Bid To Strip Collective Bargaining – The Hill
- Trump Fires Director of National Security Agency - WSJ
- Federal Officials Are Quietly Terminating The Legal Residency Of Some International College Students - AP
- DOGE Cuts Update Today: Hundreds of Layoffs Could Be Reversed - Newsweek
- Trump Tariffs Pose Danger For Vulnerable Republicans – The Hill
- Protesters Tee Off Against Trump And Musk In “Hands Off!” Rallies Across The U.S. - Politico
- The Trump Tracker, Stay Up To Date on the First 100 Days – WSJ
Health and Wellness
Wellness At Work Unleashes Healthier, Long-Term Success
Leadership has evolved from the stereotypical demanding boss treating people like emotionless machines. Effective leadership now taps into the psychology of wellness at work to help employees succeed in a healthy way. And workers want to succeed: According to consulting firm McKinsey, 70% of employees say their sense of purpose comes from work. "This is a huge opportunity for effective leaders to step up and close the purpose gap because it can make a real difference in people's lives," said Jennifer Moss, a workplace culture expert.
When people believe they can influence their future, they are more engaged and productive. "Leaders who operationalize hope through clear goals, multiple pathways to success and a sense of agency help employees break out of survival mode," she said. "Then, employees see a future for themselves in the organization." Most leaders acknowledge that employees need a life outside of work. Yet, when it really matters, they often expect employees to sacrifice personal commitments for their job. "Effective leaders understand that this mindset leads to burnout," Grabarek, co-author with Sawyer of "Leading for Wellness," said. "Burnout costs companies (money), and good leadership can fix it."
Read more at Investor’s Business Daily
Industry News
Trade War Updates
- U.S. vs. World: What Trump Tariffs Mean For The U.S. Economy And Stock Market - IBD
- Will Trump's Tariffs Restore Manufacturing? The Answer May Not Be Simple — Or Quick - NBC
- U.S. Stock Futures, European Equities, Oil Tumble After Trump Stands Firm On Levies - YahooFinance
- Market Turmoil Deepens After Trump Sticks With Tariff Plan - WSJ
- AIA Calls Out Workforce Challenges In Tariff Debate - Politico
- China Wanted To Negotiate With Trump. Now It’s Arming For Another Trade War. - WSJ
- India Unlikely To Retaliate Against Trump's Tariffs As Deal Talks Progress, Sources Say - Reuters
- EU Prepares Countermeasures, Markets Brace For Turmoil - YahooFinance
- EU Seeks Unity In First Strike Back At Trump Tariffs - Reuters
- Mercedes Could Add Model To U.S. Factory To Avoid Tariffs, Production Boss Says – Automotive News
- U.S. Trade Deficit Will Pummel Growth In First Quarter, Raising Recession Risk. Tariffs Won’t Help. - MarketWatch
- Gradually, Then Suddenly: Global Trade Shock to Economy and Markets - Wilmington Trust
- JCB Doubles Size Of New Texas Factory In Response To Trump’s Tariffs – Construction Briefing
- Trump Is Launching a Turbulent New Era for the Global Economy – Foreign Affairs
- Don’t Count On A Tariff-Fueled Manufacturing Boom - Politico
- In Matter of Days, Outlook Shifts From Solid Growth to Recession Risk – WSJ
CI to Host Online Tariff Impact Discussion for Manufacturing Member Execs
With the recent announcement of sweeping tariffs by the Trump Administration — including a 10% tariff on nearly all imported goods and targeted increases for key trading partners — uncertainty is again rippling through the manufacturing sector. Recognizing that one of the greatest values the Council of Industry brings to its members is the collective experience and wisdom of its members, we will host an Executive Roundtable on Friday, April 11th, 8:00 – 9:30 AM, for manufacturing member executives to share perspectives on:
- How developments are affecting your business today
- What you are forecasting for the months ahead
- What strategies you are considering in response
We’ll also provide a brief update on what we’re hearing at the national and regional levels, however, this session is primarily to hear from our members.
Please note this discussion is open to manufacturing employers only.
For more information or to register please email info@councilofindustry.org
NFIB Jobs Report: Small Businesses Actively Hiring for Current Vacancies
NFIB’s March jobs report found that 40% (seasonally adjusted) of small business owners reported job openings they could not fill in March, up two points from February. A seasonally adjusted net 12% of owners plan to create new jobs in the next three months, down three points from February. The last time hiring plans were this low was in April 2024. Job openings were the highest in the construction, transportation, and manufacturing sectors, and the lowest in the agriculture and wholesale sectors.
- Overall, 53% of small business owners reported hiring or trying to hire in March, unchanged from February.
- Forty-seven percent (87% of those hiring or trying to hire) of owners reported few or no qualified applicants for the positions they were trying to fill.
- Twenty-six percent of owners reported few qualified applicants for their open positions and 21% reported none.
- The percent of small business owners reporting labor quality as their top operating problem was unchanged from February at 19%.
- Labor costs reported as the single most important problem for business owners fell one point in March to 11%, only two points below the highest reading of 13% reached in December 2021.
LG to Buy Out GM’s $2B Stake in EV Battery Plant
LG Energy Solution Ltd will pay $2 billion to buy out its partner, General Motors Company, in their EV battery joint venture in Lansing, Michigan. GM first announced it would sell its stake in December as the automaker scales back EV plans in the face of uncertainty in the sector. The JV, known as Ultium Cells Plants, also has two other locations in Lordstown, Ohio, and Spring Hill, Tennessee, which GM will still retain a 50/50 stake in. The Lansing plant was the newest addition to the line up; construction began in late 2022, and production is scheduled to start later this year.
On LG Energy’s side, the purchase was included in its capital spending plan and is also an effort by the company to save money; rather than building new factories, leaders are trying to maximize what they already have. The exact dollar amount on the deal, which closes on May 31, could still change and end up lower than the original $2 billion. LG Energy plans to use the plant to supply Toyota Motors with 20GWh of NCMA- nickel, cobalt, Manganese and aluminum, battery nodules each year, enough to power roughly 200,000 vehicles.
Hershey Strikes $750 Million Deal for LesserEvil Popcorn Brand
Hershey agreed to a roughly $750 million deal for the popcorn brand LesserEvil, according to people familiar with the matter. The deal value could grow over time from $750 million if LesserEvil hits certain milestones in its performance, the people familiar with the matter added. LesserEvil had recently tapped bankers to pursue a sale of its business, which makes a range of snacks using what it says are better-for-you ingredients. Among its products are popcorn made with avocado oil, “space balls” that mimic cheese balls and organic onion-flavored corn rings, a play on Funyuns.
Big snack companies have been seeking to buy up popular smaller brands to freshen up their portfolios. PepsiCo last year agreed to acquire tortilla-chip maker Siete Foods for $1.2 billion. Flowers Foods, the company behind Wonder Bread, in January said it would buy the healthy cracker maker Simple Mills for nearly $800 million. Hershey’s acquisitions in recent years include the sour candy brand Sour Strips and Dot’s Pretzels. The Pennsylvania-based company is known for its chocolate offerings, but that has become a liability with record-high cocoa prices.
GM to Reshore Pickup Production
General Motors Corp. will raise its output of Chevrolet Silverado and GMC Sierra light-duty trucks at its Fort Wayne, Ind., assembly plant, as announced in a webcast message to employees on Thursday. Those models are also produced at GM plants in Oshawa, Ont., and Silao, Mexico, and the automaker is apparently responding to the 25% import tariffs on foreign-built vehicles proposed by the Trump Administration.
GM has not confirmed the change in production, nor when it would begin. As widely noted, GM chief executive officer Mary Barra suggested in a January earnings call that its light-duty trucks are one product line that could be reconfigured in response to new tariffs. Comments by a local United Auto Workers leader indicated that GM will be adding up to 250 production jobs at the plant. The manufacturer is expected to hire temporary workers to help manage “operational adjustments” and address manufacturing requirements at Fort Wayne.
Read more at American Machinist
Nissan Considers Transferring Some Domestic Production To US, Nikkei Says
Nissan Motor is considering shifting some domestic production of U.S.-bound vehicles to the U.S., the Nikkei reported on Saturday, as President Donald Trump ramps up trade tariffs on nations worldwide. As early as this summer, Nissan plans to reduce production at its Fukuoka factory in western Japan and shift some manufacturing of its Rogue SUV to the United States to mitigate the impact of Trump's tariffs, the business newspaper said, without citing the source of its information.
The Japanese automaker's Rogue SUV, a key model in the U.S. market, is now produced in Fukuoka and the United States, the report said. On Thursday, Nissan said it would not take new orders from the U.S. for two Mexican-built Infiniti SUVs after earlier Trump tariff announcements, marking, a drastic scale-back of its operations at a joint venture plant. The automaker now plans to maintain two shifts of production of the Rogue at its Smyrna, Tennessee, plant after announcing in January it would end one of the two shifts this month.
Why OPEC+ Is Accelerating Oil Production As Prices Are Tanking And Tariffs Hammer Markets
Eight key OPEC+ producers on Thursday agreed to raise combined crude oil output by 411,000 barrels per day, speeding up the pace of their scheduled hikes and pushing down oil prices. The group — Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman — was widely expected to implement an increase of just under 140,000 barrels per day next month.
Several factors underpin the oil-producing alliance’s decision. One is that the group is bullish on oil demand later in the year, putting it firmly in the minority as investor outlooks sour and fears of a global slowdown worsen. The eight OPEC+ members behind the production decision cited “the continuing healthy market fundamentals and the positive market outlook” in their statement Thursday, saying that “this measure will provide an opportunity for the participating countries to accelerate their compensation.” The statement added that “the gradual increases may be paused or reversed subject to evolving market conditions.”