Member Briefing August 18, 2025
Empire State Manufacturing Survey – “Modest Growth” in August
Business activity grew modestly in New York State in August, according to firms responding to the Empire State Manufacturing Survey. The headline general business conditions index rose six points to 11.9, its highest reading in several months.
- The new orders index rose thirteen points to 15.4, and the shipments index held steady at 12.2, pointing to increases in both orders and shipments.
- Unfilled orders edged lower. After rising sharply last month, the inventories index retreated twenty-two points to -6.4, indicating that business inventories shrank.
- Delivery times were significantly longer, and supply availability was somewhat worse.
- The index for number of employees remained positive at 4.4, pointing to a slight increase in employment.
- The average workweek index came in at around zero, suggesting that hours worked held steady.
- The prices paid index was little changed at 54.1, a sign that input price increases remained steep, while the prices received index edged down to 22.9.
The index for future general business conditions fell eight points to 16.0, suggesting that businesses expect activity to increase in the months ahead, but firms were less optimistic than they were last month. New orders and shipments are expected to increase. Two-thirds of respondents expect input prices to pick up further over the next six months. Capital spending plans were soft.
U.S. Manufacturing Production Stalled In July, June Revised Higher
U.S. factory production was unchanged in July suggesting manufacturing activity was stalling as businesses navigate higher costs from import tariffs. The unchanged reading in manufacturing output reported by the Federal Reserve on Friday followed an upwardly revised 0.3% increase in June. Production at factories increased 1.4% on a year-over-year basis in July. There were solid increases in the production of electrical equipment, appliances and components, aerospace and miscellaneous transportation equipment as well as furniture and related products.
But production of primary metals and machinery declined. Durable goods manufacturing production rose 0.3%. Nondurable manufacturing output decreased 0.4%, with production falling across all categories. Mining output fell 0.4% after easing 0.3% in the prior month. Utilities production slid 0.2%. That followed a 1.8% surge in June. Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, declined to 77.5% from 77.7% in June. It is 2.1 percentage points below its 1972–2024 average. The operating rate for the manufacturing sector slipped to 76.8% from 76.9% in June. It is 1.4% percentage points below its long-run average.
PPI = 3.3% - Wholesale Prices Rose 0.9% In July, Much More Than Expected
Wholesale prices rose far more than expected in July, providing a potential sign that inflation is still a threat to the U.S. economy, a Bureau of Labor Statistics report Thursday showed. The producer price index, which measures final demand goods and services prices, jumped 0.9% on the month, compared to the Dow Jones estimate for a 0.2% gain. It was the biggest monthly gain since June 2022. Excluding food and energy prices, core PPI rose 0.9% against the forecast for 0.3%. Excluding food, energy and trade services, the index was up 0.6%, the biggest gain since March 2022. On an annual basis, headline PPI increased 3.3%, the biggest 12-month move since February.
Services inflation provided much of the push higher, moving 1.1% higher in July for the largest gain also since March 2022. Trade services margins rose 2%, coming amid ongoing developments in President Donald Trump’s tariff implementations. In addition, 30% of the increase in services came from a 3.8% increase in machinery and equipment wholesaling. “The large spike in the Producer Price Index this morning shows inflation is coursing through the economy, even if it hasn’t been felt by consumers yet,” wrote Chris Zaccarelli, chief investment officer at Northlight Asset Management.
Global Headlines
- Middle East
- Hamas Rejects Israel's Gaza Relocation Plan – Reuters
- Israeli Settlement Expansion Plan Will ‘Bury’ Palestinian Statehood, Minister Vows – NYT
- Far-Right Israeli Minister Taunts Prominent Palestinian Prisoner - BBC
- Iran Turns to China for Missile Boost: Report - Newsweek
- 20 Years After Its Landmark Withdrawal From Gaza, Israel Is Mired There - AP
- US Stops Visitor Visas For People From Gaza - Reuters
- Gaza’s Other Crisis—Not Enough Clean Drinking Water - WSJ
- Who Is Ali Larijani? Iran's New Security Czar - Newsweek
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Conflicts in the Middle East – Live Universal Awareness Map
Ukraine
- Trump-Putin Talks Produced Enough Movement To Justify Ukraine Meeting, Rubio Says – Reuters
- European Leaders To Join Zelensky At White House Meeting With Trump - BBC
- Outline Emerges Of Putin's Offer To End His War In Ukraine - Reuters
- Witkoff: Russia-Ukraine Land Swaps ‘Fundamental Issue’ To Be Discussed At Zelensky Meeting – The Hill
- The Secret Channel Russia and Ukraine Use to Trade Prisoners of War - WSJ
- Trump’s Promise Of A Ukrainian ‘Reassurance Force’ Praised By European Leaders - Fortune
- Ukrainians Who Fled War Are Losing Their Legal Status to Stay in the U.S. - WSJ
- 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
- Foreign Workers In Japan More Than Quadruple In Labor-Starved Areas – Nikkei Asia
- Four Years After The Fall Of Kabul, Taliban Succeeds In Near-Total Exclusion Of Women – France 24
- Moldova Could Race Ahead Of Ukraine In Getting EU Membership Boost - Politico
- Flash Floods Kill Nearly 200 In Pakistan And Pakistan-Administered Kashmir - BBC
- Sexual Violence In Conflicts Worldwide Increased By 25% Last Year, UN Says - AP
- Armenia And Azerbaijan Leaders Seek To Ease Russian And Iranian Concerns After US-Brokered Peace Deal - Fox
- World Economic Forum Clears Klaus Schwab of Wrongdoing– France 24
- Air Canada Union Says Flight Attendants Will Continue Strike, Defy Government - Reuters
- Bolivians Vote Out Socialists After Two Decades in Power – WSJ
Policy and Politics
Utility Rate Increases Are Happening Across the State – Let the Finger Pointing Begin
Not long after members of the Public Service Commission congratulated themselves Thursday for paring back National Grid’s rate increase, Gov. Kathy Hochul put out a statement chiding them for not cutting enough. Because, as you may have heard, Hochul is a champion of affordability. The PSC on Thursday approved big rate hikes for National Grid, which has more than 1.7 million electric customers, and for Central Hudson & Gas, which has 315,000. In both cases, the PSC took credit for cutting the utility’s initial request, although both of the three-year rate plans will mean significant bill increases for utility customers.
As for keeping rates down, National Grid executives say it may be necessary for the state and federal governments to contribute to the cost of rebuilding an aging grid. Phil DeCicco, the utility’s New York general counsel, said a big driver of higher rates is the cost of replacing decades-old equipment with modern infrastructure. Many utilities are rushing to beef up their electric systems to handle rising demand from electric vehicles, AI data centers and other users, creating a strong demand that drives up the cost of materials. During Thursday’s PSC meeting, Rory Christian, the commission chair, said there is only so much the PSC can do to hold down rates. He said state policymakers and utilities need to help. “We need policymakers at every level of government to effectively help us address all these issues,” Christian said.
Inflation Or Jobs: Federal Reserve Officials Are Divided Over Competing Concerns
One major question will be front and center for Federal Reserve policymakers as they prepare for an annual conference in Jackson, Wyoming next week and a crucial policy meeting in September: Which is a bigger problem for the economy right now, stubborn inflation or slower hiring? Weak job gains since April have pushed some officials toward supporting a cut in the Fed’s key rate as soon as next month, but speeches and comments by other Fed policymakers show that inflation is still a concern.
If Fed officials worry more that unemployment will start to rise and the economy falter, they are more likely to reduce their rate in order lower borrowing costs and spur borrowing and spending. Yet if their concerns grow that inflation will stay high or worsen as tariffs ripple across global supply chains, they will lean more towards keeping borrowing costs high to cool the economy and lower prices. The rate currently stands at 4.3%. Wall Street investors are pretty certain — for now — that the central bank will reduce rates in September, with futures prices putting the odds of a cut at 93%, according to CME Fedwatch.
USDOL to Provide $30M In Training Grants On AI, Skilled Trades
The U.S. Department of Labor will provide $30 million in funding to the Industry-Driven Skills Training Fund grant program to help address critical workforce shortages nationwide, according to a Monday press release. The department’s Employment and Training Administration will use the grants to provide outcome-based reimbursements to employers that offer training in “high-demand and emerging industries,” DOL said. Those industries are ones identified by the Trump administration in various executive orders and action plans and include skilled trades, artificial intelligence and maritime, among others.
“The Industry-Driven Skills Training Fund grants will ensure employers drive workforce training that is critical for their business needs, while also upskilling workers and developing a critical talent pipeline to fulfill this Administration’s goal of putting American workers and employers first,” Secretary of Labor Lori Chavez-DeRemer said in a statement. ETA will award grants of up to $8 million to state workforce agencies to create training funds that encourage employers to both develop and expand training programs, DOL said. If more funding becomes available, DOL said it could provide additional rounds of grants.
Read the more at Manufacturing Dive
Political Headlines
- More National Guard Soldiers Head to D.C. and Prepare to Carry Weapons - WSJ
- Washington DC Sues Federal Government Over Police Takeover – BBC
- DC Police Chief Retains Command After Deal With Trump Administration - BBC
- Pro Bono or Pro Nono? Law Firms Split on Fulfilling Deals With Trump - WSJ
- California Redistricting Puts Pressure On Illinois, New York – The Hill
- Gavin Newsom Lays Out California Redistricting Plan to Counter Texas Republicans - WSJ
- Trump’s Approval Rating: Inches Up In 1 Poll This Week, Hits Record Low In Another - Forbes
- Hillary Clinton: ‘I’d nominate’ Trump for Peace Prize if he ends Russia-Ukraine war – The Hill
- Blue States Hunt for Ways to Wring More Taxes From the Wealthy - WSJ
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
West Nile, Chikungunya, Dengue: Breaking Down Europe’s Summer Mosquito-Borne Diseases
West Nile virus in Italy, chikungunya in China, dengue in France. With summer in full bloom, mosquitoes are doing what mosquitoes do: keeping you up at night and spreading vector-borne viruses. European countries, particularly in the south, have already reported their share of outbreaks this summer, while China is seeing an alarming spike in chikungunya cases. Although these diseases are not new, their presence in Europe is shifting as climate change makes environmental conditions more habitable for certain types of mosquito.
The West Nile virus is endemic to Europe — meaning it is found across the continent all year round. The virus is spread by Culex pipiens, or the northern house mosquito (native to Europe), which spreads it from infected birds to humans and some animals. It is asymptomatic in 80 percent of humans — but can lead to fever and, in severe cases, cause neurological diseases and become deadly. For diseases like dengue and chikungunya, which are increasingly present due to the spread of tiger mosquitoes in Europe, experts expect case numbers to continue to rise and have warned they may become endemic. Under the worst-case climate scenarios, the Lancet study estimated that the spread of dengue and chikungunya could increase to five times the current rate by 2060.
Industry News
Trade Wars
- US Tariffs Impacting Mexican Trucking Industry – Freight Waves
- Tariffs Stymie India’s Bid to Steal Manufacturing From China - WSJ
- What Do We Make Of Two Very Different Reads On Inflation? - Marketplace
- Narendra Modi Vows ‘Self-Reliant India’ In Wake Of Donald Trump’s 50% Tariff - FT
- Trump Tariffs: A Grocery Shopper’s Guide – The Hill
- Why Haven’t Tariffs Boosted Inflation? This Theory Is Gaining Traction - WSJ
- Trump Tariff Agency Plan Stalls Amid White House Turf Battle - Politico
- Trump’s Trade Deals, A Summary to Date – IndustryWeek
Retail Sales Rise A Strong 0.5% In July
Retail sales were stronger than anticipated in July. Not only were overall sales up 0.5% during the month, but upward revisions to June activity suggest the consumer is on slightly firmer footing headed into Q3. The data showed solid spending across many retail sectors. A category of sales that excludes volatile sectors such as gas, cars, and restaurants also rose last month by 0.5% from the previous month.
Auto sales rose 1.6%. They appear to have returned roughly to normalized spending after a surge in March and April as Americans attempted to get ahead of Trump’s 25% duty on imported cars and parts and then a slump after that, according to Samuel Tombs, chief U.S. Economist at Pantheon Macroeconomics. Business at clothing stores was up 0.7%, while online retailers saw a 0.8% increase. Business at home furnishings and furniture stores rose 1.4%. However, at electronics stores, sales were down 0.6%. And business at restaurants, the lone services component within the Census Bureau report and a barometer of discretionary spending, fell 0.4%, however as shoppers focus on eating at home to save money.
China’s Economy Lags In July Under Pressure From Tariffs And A Weak Property Market
China’s economy showed signs of slowing in July as factory output and retail sales slowed and housing prices dropped further, according to data released Friday. The statistics bureau’s report said the economy had shown “notable resilience and vitality against the complex and volatile external environment and adverse impacts from extreme domestic weather.” “Chinese economic activity slowed across the board in July, with retail sales, fixed asset investment, and value added of industry growth all reaching the lowest levels of the year,” Lynne Song of ING Economics said in a report.
Annual growth in industrial output slowed to 5.7% in July from 6.8% in June, the National Bureau of Statistics said. That was an 8-month low. Investments in factory equipment and other fixed assets rose a meager 1.6% in January-July, compared with 2.8% growth in the first half of the year. Property investments plunged 12% in the first seven months of the year, with residential housing investment dropping nearly 11%.The unemployment rate rose to 5.2% from 5% as university graduates began looking for work. While consumer prices rose 0.4% in July from the month before, prices at the wholesale level slipped 3.6% from a year earlier in another indicator of relatively weak demand.
New York State Manufacturing Jobs Held Steady in July – Down Year on Year
According to preliminary seasonally adjusted figures released last by the New York State Department of Labor, the number of private sector jobs in New York State increased over the month by 11,400, 0.1%, to 8,479,400 in July 2025. New York State's private sector jobs (not seasonally adjusted) increased by 137,200, or 1.6%, over the year in July 2025, greater than the 1.0% increase in the number of private sector jobs in the U.S. Private sector jobs in the Hudson Valley rose over the year by 11,400, or 1.4 percent, to 850,600.
Manfuacturing jobs in the state fell by 100 in July to 413,600 and were off by 4,400 over the past 12 months. Hudson Valley manufacturing jobs remained steady at 41,200 and are down by 400 the past 12 months.
Read the labor market profile
U.S. Weekly Jobless Claims Fall Amid Low Layoffs
The number of Americans filing new applications for jobless benefits fell last week amid low layoffs, but a reluctance by businesses to boost hiring because of softening domestic demand could drive the unemployment rate to 4.3% in August. Initial claims for state unemployment benefits dropped 3,000 to a seasonally adjusted 224,000 for the week ended August 9, the Labor Department said on Thursday. Economists polled by Reuters had forecast 228,000 claims for the latest week.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, slipped 15,000 to a seasonally adjusted 1.953 million during the week ending August 2, the claims report showed. The elevated so-called continuing claims align with consumers' rising perceptions that jobs are hard to find. Economists said the continuing claims trend was consistent with the unemployment rate rising to 4.3% in August from 4.2% in July.
EV Drivers Still Unhappy With Public Charging
One-in-seven people pulling their electric vehicles up to a charging station, only to find all spots occupied or the charger stripped for copper doesn’t sound great, but it’s an improvement from nearly one-in-five charging failures a year ago. One of the most common reasons that buyers in surveys give for not buying electric cars is fear that they won’t easily be able to recharge them. While most EV owners charge at home, having access to Tesla Superchargers or offerings from dozens of other providers is an important measure for public comfort.
Unfortunately, EV chargers have been plagued with unreliability due to poor maintenance, vandalism and even some gasoline-powered vehicles protesting electrics by parking in charging spots. In its annual look at driver satisfaction with public charging, J.D. Power researchers say experiences are getting better, but drivers are still largely unsatisfied with public charging. While drivers are successfully charging more often, power prices are up. Users are complaining that few visits to public chargers are leaving them with ‘gasoline fill-up-like expenses.’
Army Falls Short of 155mm Production Goal
The Army — in response to diminishing stockpiles as it supported Ukraine’s defense against Russia — set a goal to produce 100,000 155mm artillery rounds per month by this October. The service opened a number of new facilities to support this endeavor — and as one Army official stated, “We haven’t seen this level of investment in our industrial base since World War II.” However, the Army is going to fall short of its goal. Service spokesperson Steve Warren told reporters in July that the Army is not expecting to produce 100,000 155mm rounds per month until mid-2026.
The service is currently producing 40,000 rounds per month, Warren said — the same amount it was producing as of September 2024, according to a Defense Department release. There are a “whole host of reasons” behind the stagnation in 155mm production, said Maj. Gen. John Reim, joint program executive officer for armaments and ammunition and commanding general of Picatinny Arsenal. One challenge has been the supply chain for production equipment, Reim said in an interview. “For a lot of this equipment that we need to rapidly expand capacity, it’s not sitting on a shelf somewhere,” and the Army has had to depend on international suppliers, he said. “We’ve [been] experiencing longer than expected lead times with some of that capability, and that has a cascading effect.”
Lockheed Wins $3.8B Project to Update F-16s For Poland
Lockheed Martin will work with a Polish defense contract to carry out a $3.8-billion modernization of Poland’s F-16 fighter aircraft fleet, to achieve the advanced F-16 Viper configuration. The aircraft are single- and two-seat variants of the single-engine fighter aircraft supplied between 2006 and 2008, as Block 52 and above. The new "F-16 Viper" (F-16V) refers to the latest F-16 variant, the F-16 Block 70/72. This version introduces more advanced capabilities, including Active Electronically Scanned Array (AESA) radar, more advanced avionics, large-format displays, and a high-speed data bus. It will be capable of air-to-air and air-to-ground combat, with advanced targeting and precision strike capabilities.
“The F-16 Viper upgrades strengthen Poland’s fleet for the missions ahead,” stated Lockheed vice president Nick Smythe. “These enhancements deliver advanced airpower capabilities by keeping the F-16 interoperable with 5th Generation platforms like the F-35, aligned with NATO missions and backed by sustained readiness and partnership with Polish industry.” The work will be carried out with Wojskowe Zakłady Lotnicze No. 2 (WZL-2) at that business’ aviation center in Bydgoszcz, Poland.
Read more at American Machinist
Boeing Defense Union Asks Lawmakers to Intervene in Strike
The union representing workers at Boeing Co.’s St. Louis-area defense factories urged US lawmakers from Missouri to intervene and nudge the planemaker to reach a deal. The IAM Union, which represents 3,200 workers currently on strike, said it had written letters to senators and representatives to press Boeing to return to the bargaining table, the group said in a statement on Wednesday. Union members build fighter aircraft such as the F-15, the T-7 training jet, missiles and munitions. They also manufacture components for Boeing’s 777X commercial jets.
About 3,200 machinists walked off the job earlier this month after members voted down a deal that would have raised wages by 20% and boosted retirement contributions. The union last went on strike in 1996, with the stoppage lasting 99 days. The St Louis operation that’s now gone on strike is far smaller than the civil aircraft business that was severely affected late last year by a walkout, which brought manufacturing in the Seattle area to a standstill for weeks and contributed to Boeing selling equity worth almost $24 billion.
The Man Tasked With Nailing Ford’s Next Model T Moment
Doug Field sounded a lot like Elon Musk when unveiling Ford Motor’s F 0.17%increase; green up pointing triangle strategy to compete against the rise of Chinese electric cars. At an event this week in Louisville, Ky., Field detailed the thinking behind Ford’s affordable electric vehicle program, which promises a midsize pickup priced at around $30,000 in 2027. His ambitious plan boils down to implementing hardcore engineering to take down costs, while keeping performance; and upending 100 years of manufacturing practices to go faster, including through more automation.
In an industry known for hype and hyperbole, there is, perhaps, no single engineer who has been attached to more fantastical personal transportation projects in the past 20 years than Field. The Segway scooter, the Tesla Model 3, the Apple car. And, now, the Model T of tomorrow. Field is basically being asked to save the company from irrelevance—at least in the minds of Wall Street investors who think China has already won.