Member Briefing August 19, 2025
Tariffs are Causing Significant Divergences In Import Costs For Different Manufacturing Sectors
U.S. import prices increased 0.4% in July, after slipping 0.1% in June, with both higher nonfuel and fuel prices driving the increase. Over the past year, import prices decreased 0.2%. Meanwhile, U.S. export prices ticked up 0.1% in July, with nonagricultural export prices driving the increase. Over the past year, export prices increased 2.2%.
In July, U.S. import prices for manufacturing rose just 0.2% over the year, but with significant divergences in prices across the industry. Petroleum and coal products manufacturing experienced the most significant over-the-year U.S. import price declines in July, falling 12.9%. On the other hand, the greatest yearly increase in U.S. import prices occurred in primary metal manufacturing, which rose 10.0% from July 2024. Meanwhile, U.S. export prices for manufacturing in July increased 2.8% over the year, with primary metal manufacturing export prices exhibiting the largest rise (26.3%).
Last Week’ Inflation Numbers Show Signs of Increased Costs Being Passed Along
Consumer prices remained relatively stable in July, while wholesale price growth sped up. In July, consumer prices increased 0.2% over the month and 2.7% over the year, the same as the annual rise in June. On the other hand, the core consumer price index, which excludes more volatile energy and food prices, rose 0.3% over the month and 3.1% over the year, slightly higher than the 2.9% 12-month increase in the month prior. Meanwhile, wholesale prices surged 0.9% over the month in July, the largest monthly jump since March 2022, and moved up 3.3% over the year, up from the 2.4% hike in June.
Although the headline CPI has not shifted dramatically, wholesalers began passing along the increased costs due to tariffs, with rising margins being a significant reason for the more dramatic price gains in July. Furthermore, manufacturers continue to feel the pinch on climbing prices for key inputs, with prices for industrial material handling equipment and private capital equipment for manufacturing industries jumping 6.0% and 4.4% over the year, respectively, in July.
NY Fed: Service Sector Activity Continues Decline in August
Business activity fell for a sixth consecutive month in the New York-Northern New Jersey region, according to the August survey. The headline business activity index edged down two points to -11.7 and tThe business climate index remained negative at -39.3, with just over half of respondents saying that the business climate was worse than normal. Other Key findings:
- The employment index moved down three points to 1.0, suggesting employment was little changed.
- The wages index held steady at 28.0, indicating that wages increased at about the same pace as last month.
- The prices paid index remained elevated at 64.3, while the prices received index edged up two points to 32.0, its highest reading since March of 2023, pointing to a small pickup in selling price increases.
- The supply availability index remained negative at -10.2, indicating that supply availability worsened.
- The index for future business activity dropped back into negative territory, falling to -6.8, and the index for the future business climate held well below zero, suggesting firms were pessimistic about the outlook.
- The index for future prices paid remained elevated, and the index for future prices received climbed to its highest level since 2022.
- Capital spending plans were soft.
Global Headlines
Middle East
- Hamas Accepts Proposed Deal For Ceasefire With Israel And Hostage Release, Egyptian Source Says - Reuters
- Thousands of Palestinians leave Gaza City fearing Israeli offensive – Reuters
- Iran Says It Will Continue Talks With IAEA After Curbing Access – US News
- An Iranian Lawmaker Claims That Tehran's Missiles Could One Day Strike U.S. Cities, Including Washington. - Newsweek
- Historic Drought, Wheat Shortage To Test Syria's New Leadership - Reuters
- Iraq Begins Excavating Mass Grave Thought To Hold Thousands Of Islamic State Group Victims – France 24
- 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, European Leaders Strike Upbeat Tone During Talks – WSJ
- Trump Tells Zelenskiy US Would Help With Ukraine's Security In A Peace Deal - Reuters
- Trump Says He Is Working To Arrange Meeting Between Putin And Zelensky - CNN
- Why There Are Fears Of Munich 1938 In Washington 2025 - Politico
- Russia Bombards Ukraine Ahead Of Trump-Zelenskyy Summit - Politico
- Russian Oil Flows To Hungary And Slovakia Halted After Ukrainian Attack - Reuters
- NATO Ally Hungary Issues Warning to Ukraine After Russia Pipeline Strike - Newsweek
- China Provides ‘Crucial’ Support That Enables Putin’s War, Germany Warns - 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
- Who Are Bolivia's Presidential Runoff Contenders Promising Economic Overhaul? – Reuters
- Marine Le Pen Or Jordan Bardella? Identity Crisis Grips France's Far Right. - Politico
- Air Canada Flight Attendants Defy Back-To-Work Order, Continue Strike – France 24
- China To Reveal New Weapons To Sink US Ships - Newsweek
- Hungarian Opposition Leader Demands Russia Refrain From Interference - Reuters
- 'Our Children Are Dying': Rare Footage Shows Plight Of Civilians In Besieged Sudan City Of Darfur - BBC
- Why Is the U.S. Offering a $5 Million Reward for a Haitian Gang Leader? - NYT
- France To Loan Iconic Bayeux Tapestry To UK For First Time In 900 Years – France 24
Policy and Politics
White House in Talks With Intel for 10% U.S. Government Stake
Trump administration officials are discussing taking a 10% stake in Intel as part of a government effort to rescue the embattled chipmaker, according to people briefed on the talks. Talks between the White House and Intel intensified earlier this month when President Trump called for the company’s Chief Executive Lip-Bu Tan to resign over his ties to China. Tan visited the president last Monday in the White House, and the two men discussed the idea of a government stake during their meeting.
One option under consideration is converting some of the money that Intel was slated to receive from the 2022 Chips and Science Act into an equity stake. Commerce Secretary Howard Lutnick is searching for ways to improve the return on investment from the funds granted to companies like Intel under the law, one of the people said. Intel was the biggest beneficiary of the law—the Biden administration announced in 2024 that Intel was eligible to receive about $8 billion for facilities in Ohio and around the country. The company would get the money after meeting certain milestones. Lutnick believes that converting those funds into an equity stake in Intel might be the best way for the government to bolster the company while protecting taxpayer interests, the person said.
Powell Has Used Jackson Hole To Battle Inflation And Buoy Jobs; He's Now Caught Between Both
The investing world will turn its attention to northwestern Wyoming in the week ahead, with Federal Reserve Chair Jerome Powell set to give his most important policy speech of the year on Friday at the annual Jackson Hole Economic Symposium. Held each year at the Jackson Lake Lodge in Grand Teton National Park, the Kansas City Fed's annual meeting often serves as a crucial set piece in the Fed chair's calendar that signals key shifts in the central bank's thinking.
Ahead of Powell's speech — likely to be his last as Fed chair — markets are placing the probability the Fed will cut rates by at least 0.25% next month at around 85%. In 2018, Jerome Powell addressed the Jackson Hole symposium for the first time as Fed chair, outlining his views on the key variables that central bankers wrestle with, elucidating his non-economist's view on the most technical aspects of monetary policy. In the intervening seven years, Powell has proven himself to be more of a pragmatist than a theoretician as he navigated 2018's false start on rate hikes, the COVID pandemic, the 2022 inflation shock, and the still-incomplete rate-cutting cycle that kicked off over a year ago.
Is CO2 Truly a Pollutant? The Trump Administration Moves To Change EPA Rules, Asserting That Carbon Dioxide Isn’t A Threat To Public Health
Greenhouse gases including CO2 are considered air pollutants under the Clean Air Act, according to a 2007 Supreme Court ruling that said federal regulators must determine whether these pollutants endanger public health. Most climate and atmospheric scientists say rising levels of CO2 are raising the planet’s temperature, which in turn is leading to more intense storms, rising sea levels and the risk of more intense drought and wildfires that endanger human health and welfare. The Trump administration is asserting that CO2 isn’t a threat to public health, as part of a new effort to undo some of the Environmental Protection Agency’s responsibilities for regulating emissions.
In a world without human activity, natural sources of CO2 such as volcanoes, decomposing plant material and wildfires, would be balanced by natural “sinks” that absorb it, such as the ocean and plants that take in CO2 during photosynthesis, according to Daniele Visioni, professor of earth and atmospheric sciences at Cornell University. While natural emissions are about 10 times greater than human-caused emissions annually, human activities are the primary cause of the current rise in atmospheric CO2, say climate scientists. As the scientific consensus on CO2’s role in climate change has solidified, so too has the alternative view that more CO2 is good for the planet, and that it was a mistake to classify it a pollutant. This view has been promoted for the past two decades by authors, bloggers and researchers who don’t accept the established scientific findings. They say that CO2 isn’t directly harmful to humans and has many natural sources, and that since Congress didn’t label CO2 a pollutant when it passed the original 1970 Clean Air Act or its amendments in 1990, changing the gas’s legal definition will require new legislation rather than EPA regulations.
Political Headlines
- Meet the Democrat Republicans Fear in Red-State America - WSJ
- Republican Civil War Erupts Over Earmarks In Funding Bills – The Hill
- One Thing Republicans Agree On Ahead Of This Fall’s Funding Fight - Politico
- Trump EO Will Target Mail-In Ballots, ‘Seriously Controversial’ Voting Machines – The Hill
- Texas Democrats End Walkout, Ensuring GOP Redistricting Plans Will Pass - WSJ
- Clean Energy Investors Relieved By Trump Tax Rule Changes – Yahoo Finance
- Texas Says Its Measles Outbreak—Biggest In U.S. In Decades—Is Over - Forbes
- FDA’s New Expert Panels Are Rife With Financial Conflicts And Fringe Views - AP
- Speaker Johnson Vows To Fight California Democrats’ ‘Illegal Power Grab’ – The Hill
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
A New Reality for Terminal Cancer: Longer Lives, With Chronic Uncertainty
Gwen Orilio didn’t know how long she had to live after her stage-four lung cancer diagnosis. The disease had already infiltrated her eye, so the 31-year-old didn’t bother opening a retirement account. Ten years later, Orilio is still alive. And she still has metastatic cancer. Keeping her going is a string of new treatments that don’t cure the disease but can buy months—even years—of time, with the hope that once one drug stops working a new one will come along. Orilio started on chemotherapy, and then switched to a new treatment, and then another, and another, and another. “My motto is that the science just needs to stay a step ahead of me, and so far it’s been working.” aid Orilio, a high-school math teacher who lives in Garner, N.C.
Orilio is part of a new era of cancer treatment challenging the idea of what it means to have and survive cancer. A small but growing population is living longer with incurable or advanced cancer, navigating the rest of their lives with a disease increasingly akin to a chronic illness. The new drugs can add years to a life, even for some diagnoses like Orilio’s that were once swift death sentences. They also put people in a state of limbo, living on a knife’s edge waiting for the next scan to say a drug has stopped working and doctors need to find a new one. The wide range of survival times has made it more difficult for cancer doctors to predict how much time a patient might have left. For most, the options eventually run out.
Industry News
Trade Wars
- EU-US Deal Details In Question – Yahoo Finance
- China Extends Probe Into EU Dairy Products As Trade Tussle Goes On - Reuters
- Freight Forwarding Market to Contract in 2025 – Material Handling & Logistics
- Canadian Premier To Meet With Mexican President In Mexico Next Month - AP
- Tyson Adjusts Beef Production In Face Of Low Supply, Healthy Demand – Manufacturing Dive
- Navarro: India Must Stop Buying Russian Oil – The Hill
- Trump’s Trade Deals, A Summary to Date – IndustryWeek
Foxconn And Softbank To Make Data Centre Equipment In Ohio For Stargate Project
Foxconn said on Monday it plans to manufacture data centre equipment with Japan's SoftBank at the Taiwanese firm's former electric vehicle factory in Ohio, part of the Stargate project to advance U.S. artificial intelligence infrastructure. Softbank has purchased the Lordstown site, Foxconn Chairman Young Liu told reporters, adding that Foxconn will continue operating the site via a venture the two companies will set up.
Stargate is a joint venture between SoftBank, ChatGPT's creator OpenAI and Oracle. The project was announced by U.S. President Donald Trump in January, who said that the companies would invest up to $500 billion. SoftBank and Foxconn started preparatory work for the project more than half a year ago, Young added. "We understand that for this project, the first priorities are power, venue, and timing — it cannot be delayed for too long. Taking all these factors into account, we believe Ohio is a very suitable location, and SoftBank shares this view," he said.
Kolmar Invests $60M To Expand Cosmetics Manufacturing Facility In Pennsylvania
Kolmar USA has announced plans to open a $60 million cosmetics manufacturing facility in Scott Technology Park, Lackawanna County, Pennsylvania. The company, which develops, manufactures, and packages cosmetics and personal care products, invested $60 million in this expansion and will create 280 new jobs while retaining 290 existing positions. Department of Community & Economic Development Secretary Rick Siger said, “This project marks a big win for Kolmar, Northeastern Pennsylvania, and the entire Commonwealth. Manufacturing is at the heart of Pennsylvania’s dynamic economy, which it why it is one of the key industries the Shapiro Administration has focused on in Pennsylvania’s Economic Development Strategy.”
The new facility includes administrative offices, warehousing, and production capabilities. It benefits from a $480,000 Job Creation Tax Credit and a $126,000 WEDnet grant for workforce training through the Department of Community & Economic Development (DCED). Additionally, the site’s Keystone Opportunity Zone (KOZ) status has provided approximately $4.6 million in tax benefits to support the project.
Pentagon Readies New Battery Strategy Amid Growing Drone Demands
Military use of drones for air, land, and sea is booming—and so is the need to power them. So the Pentagon is working on a strategy for how it sources and buys batteries—including the critical minerals they require—which officials expect to release in 2026. Congress mandated a department-wide battery strategy in the 2025 annual defense policy bill. This strategy will be an update to a lithium ion battery strategy published in 2023 “that laid out the groundwork for how we were going to address battery challenges in the department,” including working with other government agencies, allies and partners, Eric Shields, the senior battery advisor in the Pentagon’s industrial base policy office, told reporters Friday.
Standardizing batteries from all angles, including cell material and modular architecture, is a primary focus, since different platforms and devices have different batteries. “One of the things that that we're looking at standardization for is: if we have to engage in conflict today—and we're not going to have a lot of time to do a lot of the assessments and review every single individual piece of equipment for the next two years before we field something—we're going to be taking some risk. And the more we can provide this upfront guidance on standardization, the better off we're going to be when we do have to actually be in a conflict,” said Daphne Fuentevilla, the Navy’s deputy director for operational energy.
Novo Nordisk Offers Diabetes Drug Ozempic For Less Than Half The Price For Cash-Paying U.S. Patients
Novo Nordisk said it now offers cash-paying U.S. patients its blockbuster diabetes treatment Ozempic for less than half its monthly list price through multiple platforms. Patients can pay $499 in cash per month for three dose sizes of Ozempic through the drug’s official website, Novo Nordisk’s patient assistance program, the company’s recently launched direct-to-consumer online pharmacy and drug savings company GoodRx, among other platforms.
It comes after Trump in July sent separate letters to Novo Nordisk and 16 other drugmakers, calling on them to take steps to lower medication prices in the U.S. The efforts aim to make Ozempic and Wegovy available to more people, while also ensuring that patients use the branded medication instead of cheaper compounded copycats. Those drugs exploded in popularity during a now-resolved U.S. shortage of Novo Nordisk’s semaglutide, the active ingredient in both drugs.
Steelmaker Cleveland Cliffs Inks Long-Term Deals with Automakers
Steelmaker Cleveland-Cliffs Inc. has secured two- and three-year supply contracts for flat-rolled steel with some U.S. automakers, according to multiple reports. Although Cliffs has not detailed the agreements, and no automaker has confirmed the reports, it’s widely understood that General Motors is among the steel consumers involved. Flat-rolled steel is primarily used to form autobody panels. The automakers would not be able to rely on Cliffs for all of their steel requirements. Neither GM nor any U.S.-based automaker have confirmed their part in any new steel supply contracts. It’s unlikely that any party to such a supply agreement would disclose the terms publicly.
Automakers typically secure negotiate purchases of flat-rolled and other types of steel for terms much shorter than three years, typically for one year. Their vulnerability to tariffs on steel and aluminum is complicated by similar tariffs on major auto parts – potentially making them more amenable to longer agreements on purchases of major raw materials. Multi-year price terms would shield them from some effects of inflation, which many economists predict will be the effects of the U.S. tariff policy.
Read more at American Machinist
Deere To Lay Off 238 Midwest Workers Amid Struggling Tractor Market
Deere & Co. on Friday said it will lay off 238 workers across three Midwest factories as trade uncertainty and slow demand continues to impact the U.S. agriculture equipment market. Due to lower order volumes, the world’s largest tractor maker is reducing the headcount at its Harvester Works facility in East Moline, Illinois, by 115, the company said in an emailed statement. The workers’ last day will be Aug. 29.
“The struggling ag economy continues to impact orders for John Deere equipment,” the company said. “This is a challenging time for many farmers, growers and producers, and directly impacts our business in the near term.” While overall sales and revenue for Deere declined 9% in its latest quarter versus last year, buoyed somewhat by construction equipment and lawnmower sales, the company’s farm and precision agriculture business faced stiffer headwinds. The Moline-based company is also making cuts at its nearby Seeding and Cylinder facility, affecting 52 workers, and at its foundry in Waterloo, Iowa, affecting 71 workers. Their last days will be Sept. 26 and Sept. 19, respectively.
Google, Kairos Power Plan Advanced Nuclear Plant For Tennessee Valley Authority Grid By 2030
Alphabet’s Google and Kairos Power will deploy an advanced nuclear plant connected to the Tennessee Valley Authority’s electric grid by 2030, the companies announced on Monday. TVA has agreed to purchase up to 50 megawatts of power from Kairos’ Hermes 2 reactor. It is the first utility in the U.S. to sign a power purchase agreement with an advanced reactor like Hermes 2, according to the companies.
Hermes 2 is the first deployment under an agreement that Google and Kairos signed last year to launch the startup’s nuclear technology at a commercial scale. The reactor’s output is the equivalent of the consumption of about 36,000 homes. The electricity will help power Google’s data centers in Montgomery County, Tennessee, and Jackson County, Alabama. Google, Kairos and TVA said their collaboration will move the U.S. a step closer to deploying advanced nuclear reactors by making sure consumers are not on the hook for the cost of building the plant.
Stronger, Bigger Hurricane Erin Forecast To Create Dangerous Surf Along U.S. Coast
A stronger and bigger Hurricane Erin pelted parts of the Caribbean and was forecast to create dangerous surf and rip currents along the U.S. East Coast this week. It re-intensified to a Category 4 storm with 130 mph (215 kph) maximum sustained winds early Monday and moved closer to the Southeast Bahamas, according to the U.S. National Hurricane Center in Miami. Additional strengthening was forecast for Monday, followed by gradual weakening, but Erin was expected to remain a large, major hurricane into midweek.
Hurricane-force winds extended up to 60 miles (95 kilometers) from the center and tropical-storm-force winds extended outward up to 230 miles (370 km). The area of strong winds is expected to grow more over the next few days. At that size, Erin will impact coastal areas even though it isn’t forecast to make a direct landfall. As Erin moves away from the Caribbean Islands, it will turn north, sandwiching between Bermuda and coastal U.S. states by the middle of next week. The jet stream will ultimately push it away from the coastline, but also lead to an expansion in size. Erin's effects will likely be felt in the Tri-State Area Tuesday through Thursday, mainly along the Jersey Shore and Long Island's South Shore