Member Briefing August 27, 2025
Core Capital Goods Orders Rise in July, Will It Last?
Despite a headline decline in July, durable goods orders is the first unambiguously positive development in months for the manufacturing sector. After accounting for pullbacks in aircraft and defense spending, there were broad-based gains in orders. Orders for long-lasting goods fell 2.8% in July, dragged down by weak sales of commercial aircraft, the Commerce Department said Tuesday. It is the third drop in the past four months. Economists had forecast a 4.0% drop in orders for durable goods — products made to last at least three years.
The report looked stronger beneath the surface. Excluding transportation, durable-goods orders rose 1.1%. That beat expectations of a 0.1% gain. And core capital-goods orders, which exclude volatile sectors such as transportation and defense, jumped 1.1% in July after a 0.6% fall in June. New orders for aircraft, mainly Boeing passenger planes, fell 32.7% in July. Economists said the tax bill passed by Congress this summer might spark orders in the coming months. “We do see some potential for more favorable tax treatment of capital expenditures to generate more broadly based growth in capital spending,” said Richard Moody, chief economist at Regions Financial Corp.
There Is Now Clearer Evidence AI Is Wrecking Young Americans’ Job Prospects
Artificial intelligence is profoundly limiting some young Americans’ employment prospects, new research shows. Young workers are getting hit in fields where generative-AI tools such as ChatGPT can most easily automate tasks done by humans, such as software development, according to a paper released Tuesday by three Stanford University economists. They crunched anonymized data on millions of employees at tens of thousands of firms, including detailed information on workers’ ages and jobs, making this one of clearest indicators yet of AI’s disruptive impact.
Using records from paycheck processor ADP, the economists were able to get a granular view of how generative AI has affected the labor market. The data includes detailed information on workers’ ages and occupations, making it far more comprehensive than the survey of households the Labor Department uses for its monthly employment report. The Stanford economists first looked at areas where AI can automate many of the tasks workers perform, and therefore potentially replace them. Those include jobs such as software developers, receptionists, translators and customer service representatives. Their finding: Overall employment in those categories has softened since late 2022 relative to other occupations, with the weakness concentrated among younger workers.
New-Home Sales Dip in July as Homebuilders Struggle To Entice Reluctant Buyers
Sales of newly built homes dropped in July, as price cuts and homebuilder incentives failed to lure buyers struggling with affordability. Signed contracts for new single-family homes were at a seasonally adjusted annual rate of 652,000 last month, down 8.2% from a year earlier, the U.S. Census Bureau and Department of Housing and Urban Development reported on Tuesday. The July figure was also down 0.6% from June, although that was due to an upward revision to the June data, which grew by 29,000 from the initial estimate to a revised figure of 656,000.
The median sales price of new houses sold in July was $403,800, down 5.9%, or roughly $20,000, from a year earlier and the lowest price since November 2024. At the end of July, the supply of new houses for sale was at a seasonally adjusted estimate of 499,000—up 7.3% from a year ago but down 0.6% from June following a construction slowdown this year. It represented 9.2 months of supply at the current sales pace, unchanged from June and up 16.5% from a year earlier. Mortgage rates have continued to fall in anticipation of a potential Fed rate cut next month, with the average 30-year rate matching a 10-month low of 6.58% last week.
Global Headlines
Middle East
- Families Leave Gaza City After Night Of Bombardment - Reuters
- Iran, European Powers Meet In Geneva As Threat Of Sanctions Looms Large - Reuters
- Israeli Military Says Strike On Gaza Hospital Was Targeting A Hamas Camera, Militants - AP
- Hezbollah Chief Rejects Disarmament, Lebanon To Submit New Plan By The End Of The Week – France 24
- Egypt Is Training Palestinian Forces to Take Over Postwar Gaza - WSJ
- UN Inquiry On Israeli Violence Hampered By Funding Shortfall, Document Shows - Reuters
- Australia Blames Iran for Antisemitic Attacks, Expels Ambassador - WSJ
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Conflicts in the Middle East – Live Universal Awareness Map
Ukraine
- Russia Rejects Zelensky Talks, Trump Says Setting Up Summit Like Mixing ‘Oil And Vinegar’ – WSJ
- Ukraine Admits Russian Army Has Entered Central Dnipropetrovsk Region, Fighting Ongoing – France 24
- US And Russian Officials Discussed Energy Deals Alongside Latest Ukraine Peace Talks - Reuters
- US Offers Air And Intelligence Support To Postwar Force In Ukraine – Yahoo
- The Ukrainian Attacks That Are Forcing Russia to Ration Its Fuel - WSJ
- Ukraine Unveils New Flamingo Missile - Newsweek
- 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
- French Government At Risk Of Falling As PM Faces New No-Confidence Vote Over Debt Crisis – France 24
- French Stocks, Bonds Tumble As Government Faces Potential Collapse – Reuters
- Chinese Flock To Russian Universities In Afterglow Of Xi-Putin Ties – Nikkei Asia
- Farage Unveils Plan For Mass Deportations If Elected UK PM - BBC
- China Makes New Moves Against US Ally Japan in Contested Waters - Newsweek
- 'Powerful Optics': China's Xi To Welcome Putin, Modi In Grand Show Of Solidarity - Reuters
- North Korea Has a Secret Long-Range Missile Base Near Chinese Border, Report Says - WSJ
- Armed Men Kill Four In Attack In Ivory Coast Near Burkina Faso Border – France 24
Policy and Politics
Senate Sets Date For Vote On 2026 Defense Policy Bill
House Republicans on Thursday announced plans to advance the chamber's annual defense policy bill during the second week of September, in one of the first major measures lawmakers will address after their summer recess. The latest: The House Rules Committee, which sets guardrails for legislation and determines what amendments receive votes, announced it will likely meet the week of Sept. 8 to prep the National Defense Authorization Act for floor debate.
The panel has set an Aug. 28 deadline for lawmakers to submit their amendments. Hundreds of amendments are typically offered and debated on the House floor each year for the defense bill. Post-recess agenda: House Republicans first aim to pass their annual energy-water spending bill when they return after Labor Day. Then they will turn their attention to the NDAA.
Read More at Federal News Network
Major Companies Reframing, Not Abandoning, DEI: Report
More than half of S&P 100 companies adjusted how they communicated diversity, equity and inclusion efforts in their annual securities filings this year compared to 2024, according to a new report by The Conference Board. Among S&P 500 companies, the use of the acronym “DEI” dropped by 68% compared to 2024, according to the report. Twenty-one percent of companies reduced or removed DEI-related metrics and targets.
While firms scaled back DEI language and commitments, 79% percent of S&P 500 firms disclosed board committee oversight of DEI, up from 72%, according to the report. For Russell 3000 companies, this figure jumped from 48.4% to 86.8%. Rather than simply abandoning DEI, this suggests that companies are being more cautious about external messaging while integrating DEI into governance to make it more legally defensible, according to the report.
Read the more at Automotive Dive
The Costly Ingredient That Big Food Companies Are Processing: MAHA
The Trump administration’s “Make America Healthy Again” agenda has shaken big food companies already reeling from shifting consumer preferences. States across the country have taken up the MAHA cause, passing laws to restrict the sale of certain foods and, in some cases, investigating food companies’ health claims. Executives at big processed-food makers are trying to determine how much of what Kennedy and MAHA want will actually happen, and how it could affect their bottom lines. Their challenge is to balance his push for what he sees as healthier food with their need to make products that consumers will buy. Some companies have assembled special teams to navigate MAHA, drawing up lists and “heat maps” to track ingredients coming under scrutiny, and assessing which ones they might have to remove or label.
Executives have compared dealing with MAHA to battling the mythical Hydra—cut off one head and two more spring up. Candy-maker Mars said recently that it would offer some M&M’s, Skittles and other sweets without the dyes next year. The Consumer Brands Association, a major industry trade group, encouraged food and beverage makers to nix the dyes by the end of 2027. Makers of old-line brands like Lunchables, Twinkies and Trix were struggling long before Kennedy arrived in Washington to head the Department of Health and Human Services. Sales have slumped for many big food companies that sharply increased their prices in recent years. Climbing costs, soaring use of weight-loss drugs, heightened scrutiny over ultraprocessed foods and growing consumer demand for fresher, healthier fare are compounding the challenges.
Political Headlines
- Trump Pentagon Weighing Equity Stakes In Defense Contractors Like Lockheed, Says Lutnick – CNBC
- Trump’s Targeting of Cook Escalates Bid for Control of Fed - WSJ
- Federal Reserve Governor Lisa Cook Says Trump 'Has No Authority' To Fire Her – France 24
- Blue State Governors Move To Center Of Trump Battles – The Hill
- Trump Signs Executive Order Targeting Flag Burning—Here’s What The Supreme Court Has Said About The Issue - Forbes
- ‘Collapsing In Confusion And Haste’: John Bolton Slams Trump In First Comments Since FBI Raid - Yahoo
- Judge Rules Utah’s Congressional Map Must Be Redrawn For The 2026 Elections - AP
- Hegseth fires head of Defense Intelligence Agency, Lt. Gen. Jeffrey Kruse – Washington Post
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
First Human Case Of Flesh-Eating Screwworm Parasite Confirmed In US
The first human case of a flesh-eating parasite infestation has been confirmed in the US, authorities say. New World screwworm (NWS) myiasis was found in a patient who returned to the US from El Salvador, the Department of Health and Human Services said on Monday. The case was confirmed on 4 August. NWS myiasis is a parasitic infestation of fly larvae, or maggots, caused by parasitic flies. The pest primarily affects livestock, and authorities have said the risk to US public health was currently "very low".
HHS spokesperson Andrew Nixon said it is the first human case of travel-associated NWS myiasis from an outbreak-affected country identified in the US. Humans, particularly those with an open wound, are susceptible to infestation and are at higher risk if they travel to those regions or if they are around livestock in rural areas where the flies are, the CDC says. "When NWS fly larvae (maggots) burrow into the flesh of a living animal, they cause serious, often deadly damage to the animal," according to the USDA. "NWS can infest livestock, pets, wildlife, occasionally birds, and in rare cases, people."
Industry News
Trade Wars
- Steep US Tariffs Set To Hit Indian Exports Today – Reuters
- Trump Vows To Impose Furniture Tariffs. What Would That Mean For Prices? - ABC
- Small Businesses Are Scrambling As US Tariff Exemption Comes To An End - CNN
- As Tariff Impacts Spread, New Vehicle Prices And Inventories Are Set To Rise – Automotive Dive
- Trump Threatens Tariffs On Countries That ‘Discriminate’ Against US Tech – The Guardian
- The Chart That Shows How U.S. Companies Are Trying To Beat Trump’s China Trade War - CNBC
- What Shoppers Can Do To Limit Charges Once The US Ends A Tariff Exemption For Goods Under $800 - AP
- President Floated 200% Duties On Imports From China If The Country Does Not Ship Magnets To The U.S – Supply Chain Dive
- Lamborghini CEO Laments Even The Wealthiest Buyers Are Feeling Tariffs – Quartz
U.S. Consumer Confidence Falls Slightly on Job, Income Concerns
Americans’ view of the U.S. economy declined modestly in August as anxiety over a weakening job market grew for the eighth straight month. The Conference Board said Tuesday that its consumer confidence index ticked down by 1.3 points to 97.4 in August, down from July’s 98.7, but in the same narrow range of the past three months. The small decline in confidence was in line with the forecasts of most of the economists who were surveyed.
- A measure of Americans’ short-term expectations for their income, business conditions and the job market fell by 1.2 points to 74.8, remaining significantly below 80, the marker that can signal a recession ahead.
- Consumers’ assessments of their current economic situation also fell modestly, to 131.2 in August from 132.8 in July.
- The share of consumers expecting a recession over the next year rose in August to the highest level since April, when Trump’s tariff rollout began.
- The share of survey respondents who said they intended to buy a car in the near future rose, while those planning to purchase a home remained stable after July’s decline.
- Those saying they planned to buy big-ticket items like appliances fell, but there were big variations among product categories.
- Respondents who said they planned to take a vacation soon, either inside of the U.S. or abroad, also declined.
America’s Newest Auto Plant Is Full of Robots. It Still Needs the Human Touch.
At Hyundai Motor Group’s ultramodern new auto plant, robots perform a stunning array of tasks. They move materials, attach doors and do almost all of the welding. Dog-like robots, their snouts laden with cameras, prance across the floor to inspect partially built Ioniq electric vehicles. The factory, which opened near Savannah, Ga., late last year, deploys 750 robots, not counting the hundreds of autonomous guided vehicles that glide across the floor. About 1,450 people work alongside them. That roughly 2-to-1 ratio of humans to robots compares with the U.S. auto-industry average of 7-to-1.
Hyundai Motor Co. Chief Executive José Muñoz said the factory was designed so that robots do tasks that are dangerous, repetitive or physically demanding. People are left to troubleshoot, monitor quality and bring craftsmanship to the manufacturing process. “We’re not trying to minimize human involvement—we’re trying to maximize human potential,” he said. No robot can do Unice Youmans’s job. She works on the factory’s metal-finishing line, pulling out dents, sanding away imperfections and removing adhesive and dust from freshly welded vehicle frames before they are whisked away to the paint shop. “I don’t think it’s something that a machine can do because we have to be very hands-on with these cars,” she said.
Lilly Obesity-Pill Trial Results Find A Warmer Reception On Wall Street This Time Around
Eli Lilly & Co. earlier this month disappointed Wall Street with clinical-trial data for its obesity pill, but a new round of trial data is getting a warmer reception. The pharmaceutical giant said on Tuesday that results from a Phase 3 trial of its orforglipron pill “met the primary and all key secondary endpoints, with compelling efficacy results and a safety profile consistent with injectable GLP-1 medicines.” This trial, called Attain-2, studied the effect of the drug on adults with both obesity or overweight and Type 2 diabetes, whereas the prior Attain-1 trial focused on individuals who did not have Type 2 diabetes.
In the latest trial results announced Tuesday, Lilly said participants with obesity or overweight and Type 2 diabetes lost an average of 22.9 pounds on the highest dose, bringing their weight down by 10.5%. All three doses of orforglipron “met the primary and all key secondary endpoints, delivering significant weight loss, meaningful [blood-sugar] reductions, and improvements in cardiometabolic risk factors at 72 weeks,” Lilly said. The Attain-2 trial looked more closely at blood-sugar levels than the other trial did. Lilly now has sufficient data to move “with urgency” toward global regulatory submissions for the medicine, the company said.
Korean Air Makes Airline's Biggest-Ever Boeing Jet Order Amid Trump-Lee Summit
Korean Air announced a $50 billion order on Monday for 103 Boeing (airplanes and GE Aerospace engines and servicing coinciding with the visit of South Korean President Lee Jae Myung to Washington. The order, the largest in the Korean air carrier's history, includes a mix of 787s, 777s and 737 Boeing airplanes worth about $36.5 billion. Korean Air also announced a separate deal Monday with GE on the purchase and maintenance of engines valued at $13.7 billion.
The Boeing deal is worth $36.2 billion, South Korea's industry ministry said, in addition to the GE deal. Boeing said the deal would help Korean Air fully integrate operations with Asiana Airlines, a subsidiary of South Korea's largest airline it acquired last year. In March, South Korea's industry ministry said Korean Air said it would soon finalize a $32.7 billion deal for new Boeing and GE engines. Korean Air last year said it would order 20 777-9 and 20 787-10 planes from Boeing, with options for an additional 10 aircraft. The new order is separate from that purchase.
The Boom in New Steel Mills Is Outpacing Demand
Steel companies are building new plants that will add millions of tons of the industrial metal to the U.S. market. The plans represent the largest build-out of steelmaking capacity in decades and it is happening in an industry that has long struggled to compete against low-price imports. Domestic steelmakers have embraced a protectionist fervor and gained market share versus imports. But they haven’t been able to keep prices from slipping because of soft demand from major steel consumers such as the auto and construction industries.
Steel demand has shrunk from a decade ago. Shipments last year were flat from 2015 levels, but imports accounted for a smaller share of the overall U.S. steel market, according to the American Iron and Steel Institute. Twenty-one million tons of additional steel production capacity has been announced, placed under construction or completed in the past four years, according to a Wall Street Journal analysis of market data from Argus Media. That figure is roughly a quarter of total U.S. production of the metal last year.
Pratt & Whitney Awarded Potential $2.9B Navy F135 Propulsion System Contract Modification
The Department of Defense said Friday the cost-plus-incentive-fee, fixed-price-incentive-fee modification expands the scope of the initial contract to include the production and delivery of 141 F135 propulsion systems. This supports the Lot 18 F-35 aircraft production for the Joint Strike Fighter program for the Air Force, Navy, Marine Corps, F-35 Cooperative Program partners and foreign military sales customers.
Work will be carried out at multiple locations in and outside the U.S., with an expected completion date of February 2028.Prior F135 Contract Modification In early August, Pratt & Whitney received a $115 million modification to the same F135 propulsion system contract. That prior contract modification called for the purchase of long-lead time materials for the production and delivery of F135 engine parts.
Read more at Gov Contract Wire
Contract Talks Resume for Boeing Defense
Boeing has resumed negotiations with the International Assn. of Machinists and Aerospace Workers, the first talks since the start of a strike August 4 at three Boeing Defense plants in Missouri and Illinois. An estimated 3,200 IAM workers had rejected Boeing’s four-year offer in late July, which included a 20% wage increase, a $5,000 ratification bonus, more vacation and sick leave, and a path to higher wages.
The union in recent days has sought to renew its workers’ goals, with IAM president Brian Bryant joining a picket line on August 21. In a published interview he claimed Boeing’s last offer “disrespected” the IAM workers. Bryant has indicated the union is seeking more than the 20% wage increase Boeing proposed and a faster route to the higher level, as well as improvements to the 401(k) retirement plan. “We look forward to further conversations with the union on August 25 and finding a path forward to end the strike and bring our team back to work,” according to a Boeing statement.
Read more at American Machinist
GM's $1 Billion Bet On F1 Rolls On With Star Driver Pairing For Cadillac Team
GM’s Cadillac F1 team unveiled its driver pairing for the 2026 season, when the Big Three automaker’s big bet on F1 (FWONK) begins. GM (GM) announced the signing of two star drivers — 10-time Grand Prix winner Valtteri Bottas and six-time winner Sergio Perez — to lead the team in its debut season. GM said the two drivers combined have raced in over 500 Grand Prix, with over 100 podium finishes. Currently, Bottas is the development and reserve driver for the Mercedes (MBGAF) F1 team, but he drove for the Stake F1 team last year. Perez last raced for the Red Bull F1 team last year.
The team already spent $450 million as an anti-dilution fee, which is a one-time payment that will be split evenly among the 10 existing teams. That fee, coupled with the $130 million needed to run the team annually, plus drivers' salaries, $100 million or so to develop and run an engine program, and various team marketing and other staff salaries, balloons up to $1 billion. GM clearly believes the spend is worth it as it pushes Cadillac as an international luxury automaker and GM’s halo brand. Other automakers have also spent heavily to join F1, most recently Volkswagen's (VWAGY) Audi also joining the field in 2026, and GM rival Ford (F) joining Red Bull as its engine partner next year.