Member Briefing February 19, 2025
Empire State Manufacturing Survey: Activity “Edged Higher” in February
After declining last month, manufacturing activity grew slightly in New York State, according to the February survey. The general business conditions index climbed eighteen points to 5.7.
- The new orders index rose twenty points to 11.4, suggesting orders increased after declining last month, and the shipments index rose sixteen points to 14.2, indicating that shipments increased. Unfilled orders held steady.
- The inventories index remained positive at 8.7, a sign that inventories grew. The delivery times index came in at 5.4, suggesting that delivery times were slightly longer, and the supply availability index dipped to -2.2, a sign that supply availability edged slightly lower.
- The index for number of employees fell to -3.6, suggesting that employment levels moved somewhat lower, while the average workweek index was -1.2, suggesting that hours worked held steady.
- Both price indexes climbed for a second consecutive month: the prices paid index rose eleven points to 40.2, its highest level in nearly two years, and the prices received index rose ten points to 19.6.
- Firms expect conditions to improve in the months ahead, but optimism declined noticeably. The index for future business activity fell fifteen points to 22.2. Capital spending plans remained soft. Supply availability is expected to contract somewhat over the next six months.
Consumer Spending Update: Economic Confidence Jumps in February
The LSEG/Ipsos Primary Consumer Sentiment Index for February 2025 is at 55.3. Fielded from January 24 – February 7, 2025, the Index is up 0.9 point from last month. The index is up slightly after a sharp decline to begin 2025. It now sits more than three points higher than its reading from this time last year. This survey was fielded between January 24 and February 7, 2025. The sample includes 1,000 Americans aged 18-74.
- The Current Index reads at 45.8, up 0.6 point from last month. The index is now 3.6 points higher than its reading from this time last year (42.2).
- The Expectations Index reads at 64.1, up 0.9 point from last month, and showing its first increase since November. The index is now 2.9 points higher than its February 2024 reading (61.3).
- The Investment Index is at 48.6, up 1.5 points since January. The index is 3.9 points above its February 2024 reading (44.7).
- The Jobs Index reads at 65.4, up 0.7 point from last month. The index is now 3.1 points higher than its reading from a year ago (62.3).
Homebuilder Confidence Falls To Lowest Level In Five Months Amid Tariff Concerns, High Mortgage Rates
Homebuilders are feeling less optimistic about the housing market as they navigate concerns over tariffs, elevated mortgage rates, and high housing costs. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index was 42 in February, a five-point drop from January and the lowest level in five months. Economists were expecting a reading of 46, per Bloomberg data. A reading under 50 indicates that more builders view conditions as poor than good.
One of the major cost concerns stems from President Trump’s executive order imposing 25% tariffs on all imported steel and aluminum products, set to take effect in March. According to the National Association of Home Builders, this could raise residential construction costs. At the same time, builders continue to grapple with elevated mortgage rates. Data from Freddie Mac shows that the 30-year fixed mortgage rate is hovering around 7%, further dampening demand. The NAHB survey found 26% of builders cut home prices in February, down from 30% in January and the lowest share since May 2024. Meanwhile, 59% of builders used sales incentives in February, a slight decrease from 61% in January.
Global Headlines
Middle East
- Israel Will Begin Negotiations On Next Phase Of Gaza Ceasefire This Week, Minister Says - Reuters
- Inclusivity, Economic Woes, And Security Challenge Syria Post-Assad - VOA
- Hamas Says It Will Free 6 Living Hostages And Hand Over Four Bodies, Accelerating Gaza Releases - AP
- Lebanese Search For Dead In Devastated Villages As Israel Withdraws - Reuters
- British Couple Detained In Iran Charged With Espionage – Sky News
- Israeli Troops Stay Inside South Lebanon After Withdrawal Deadline - BBC
- As Israel Uses US-Made AI Models In War, Concerns Arise About Tech’s Role In Who Lives And Who Dies - AP
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Russia And US Agree At Talks Without Ukraine To Press Ahead With Bid To End War – Reuters
- Ending War In Ukraine Will Require Concessions From All Sides Says Rubio - Newsweek
- US And Russia Will Appoint ‘High-Level Teams’ To Negotiate Ending Ukraine War - Forbes
- Russia Frees Detained American As Talks With US On Ukraine Begin – The Hill
- Meet Putin’s U.S.-Educated Dealmaker in Talks With Trump Administration - WSJ
- Trump-Putin Meeting Not Imminent, As First US-Russia Talks On Ukraine Finish In Riyadh - Politico
- Russian Drone Attack Hits Central Ukraine Apartment Building - VOA
- Ukraine’s Zelensky, Left Out of U.S.-Russia Talks, Sees Little Chance for Progress - 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
- Taiwan Considering Multi-Billion Dollar Arms Purchase From US, Sources Say – Reuters
- North Korea Doubles Down on Nukes Amid Rising Tensions with US and Asia - Newsweek
- European Leaders Hold Crisis Security Talks As US Signals Transatlantic Reset - VOA
- Poland To Europe: Don’t Play Games With Trump, Spend More On Defense - Politico
- What Happened When Xi Gathered China’s Tech Entrepreneurs For A ‘High-Stakes’ Symposium? - SCMP
- Russia-Linked Propaganda Campaign Pushes To Undercut German Support For Ukraine - Reuters
- Toronto Plane Crash Passenger Describes 'Mass Chaos' as Aircraft Landed - Newsweek
- Here’s What We Know About Pope Francis’ Health—As Vatican Reports ‘Complex Clinical Picture’ - Forbes
- EU Eyes Funding Foreign LNG Projects To Lower Prices, Draft Plan Reveals – Politico
Policy and Politics
With Shutdown Deadline Less Than a Month Away Congress Has No Clear Plan to Avoid It
Congress is struggling to strike a deal to keep the government funded as a looming deadline to prevent a shutdown next month gets closer. Lawmakers are less than a month away from a mid-March date to pass legislation to prevent a funding lapse — or risk the first shutdown in years. Negotiators on both sides have been working to strike a spending deal for weeks, with hopes of crafting the 12 annual funding bills that could make it out of both chambers with bipartisan support — and across President Trump’s desk for signature. But they also say the task has gotten more difficult as fallout spreads over a sweeping operation undertaken by the Trump administration to reshape the federal government.
Speaker Mike Johnson (R-La.) has left the door open to the idea of a stopgap, also known as a continuing resolution (CR), that would run through the end of the fiscal year. The idea has some support from conservatives who want to see funding levels kept flat through September, even if it locks in continued spending in line with some of former President Biden’s funding priorities in the meantime. However, some Republicans are resisting the idea.
U.S. Appeals Court Blocks Biden SAVE Plan For Student Loans
A U.S. appeals court on Tuesday blocked the Biden administration’s student loan relief plan known as SAVE. The 8th U.S. Circuit Court of Appeals sided with the seven Republican-led states that filed a lawsuit against the U.S. Department of Education’s plan. The GOP states argued that Biden, with SAVE, was essentially trying to find a roundabout way to forgive student debt after the Supreme Court blocked his sweeping debt cancellation plan in June 2023.
SAVE, or the Saving on a Valuable Education plan, came with two key provisions that the lawsuits targeted. It had lower monthly payments than any other federal student loan repayment plan, and it led to quicker debt erasure for those with small balances. Implementing SAVE could cost as much as $475 billion over a decade, an analysis by the University of Pennsylvania’s Penn Wharton Budget Model found. That made it a target for Republicans, who argued that taxpayers shouldn’t be asked to subsidize the loan payments of those who have benefited from a higher education.
Pushback Grows To Hochul's Budgeted $3B Inflation 'Refund' Checks
More Democratic lawmakers continue to come out against Gov. Kathy Hochul's plan to spend $3 billion on one-time inflation "refund" checks for low- and middle-income families as she works to win back voters struggling with affordability. As inflation continues to rise, state lawmakers have introduced legislation for affordability proposals they want in the budget that argue would better serve New Yorkers in the long term instead of Hochul's budget ask to send checks of $300 for single tax filers making under $150,000 a year and $500 checks to joint filers making up to $300,000.
Sen. Pat Fahy, an Albany Democrat, agrees the Legislature could better invest the $3 billion in the next budget. The senator introduced a bill last week to expand the Earned Income Tax Credit for young and older adults, and people who don't have children. It would also raise the income threshold for eligibility, and nearly double it for filers with dependents from from $11,610 to $24,960, indexed to inflation. "We want to get workers into the workforce, this is a way to reward it, and, if you will, incentivize it," Fahy said. "And it's got decades and decades of substantiated research behind it."
Read more at NY State of Politics
Trump’s First 100 Days
- Trump Makes Broad Use of Emergency Powers to Advance Policy Priorities – WSJ
- Department Of Homeland Security Preparing To Fire Hundreds Of Senior Leaders This Week - CNBC
- Five Charts Explain What We Know About Trump’s Proposed Spending Freeze - Politico
- Federal Judge Declines to Block Musk’s Team From Having Access to Education Data - NYT
- Republican Senators Try To Curb Influence Of Trump Tariff Hawk Peter Navaro - WSJ
- Leonard Peltier Leaves Prison After Biden Commuted His Sentence In The Killing Of Two FBI Agents - AP
- Elon Musk’s Shift From EV Evangelist To ‘MAGA God’ Splits Tesla Image Along Partisan Lines – Auto News
- Hundreds Protest Trump’s Actions At Schumer’s Hudson Valley Office – Mid-Hudson News
- Social Security Chief Steps Down Over DOGE Access To Recipient Data – The Hill
- Elon Musk Responds to Social Security Concerns - Newsweek
- The Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
- Tracking Trump’s Cabinet Confirmations - NYT
Health and Wellness
What Is Trump’s New ‘Make America Healthy Again’ Commission?
President Donald Trump last week signed an executive order to create a “Make America Healthy Again” commission led by newly confirmed Health and Human Services Secretary Robert F. Kennedy Jr. The executive order states that the initial mission of the commission will “be to advise and assist the President on how best to exercise his authority to address the childhood chronic disease crisis.” It tasks the commission with a few initial steps:
- To study the childhood chronic disease “crisis” and any potential causes, including “the American diet, absorption of toxic material, medical treatments, lifestyle, environmental factors, Government policies, food production techniques, electromagnetic radiation, and corporate influence or cronyism.”
- To “advise and assist the president on informing the American people regarding the childhood chronic disease crisis.”
- To give the president recommendations on policy and strategy for addressing “the identified contributing causes of and ending the childhood chronic disease crisis.”
The committee is additionally expected to submit its “Make Our Children Healthy Again Assessment” to the president within 100 days of the order. It also must submit its strategy to address the issue to Trump within 180 days of the order.
Industry News
Broadcom, TSMC Weigh Possible Intel Deals That Would Split Storied Chip Maker
Intel’s rivals Taiwan Semiconductor Manufacturing Co. and Broadcom are each eyeing potential deals that would break the U.S. chipmaking icon in two, the Wall Street Journal reported on Saturday, citing people familiar with the matter. Broadcom has been closely examining Intel’s chip design and marketing business, the Journal reported, adding that the company had discussed a potential bid with its advisers but would likely only proceed if it found a partner for Intel’s manufacturing business.
TSMC, the world’s biggest contract chipmaker, has separately studied controlling some or all of Intel’s chip plants, potentially as part of an investor consortium or other structure, the report said. Broadcom and TSMC are not working together, and all of the talks so far are preliminary and largely informal, the Journal added. Intel’s interim executive chairman, Frank Yeary, has been leading the discussions with possible suitors and Trump administration officials, who are concerned about the fate of a company seen as critical to national security, the report said.
Deere Earnings: Sales Slump 35% As Tariffs Impacts Loom
Deere & Co. reported muted sales in the first quarter as it looks to mitigate tariff impacts on its farm and construction equipment costs and supply chains. The tractor giant’s Q1 sales slumped 35% to $6.8 billion over last year, driven by sluggish global demand for agriculture and earthmoving equipment. Deere’s profits were slashed to $869 million for the period as efforts to cut production and reduce the company’s dealer inventories continued.
Deere and its competitors are also navigating a dynamic trade backdrop complicated by tariffs on aluminum and steel imports. The tariffs with China will have an “immaterial” impact on the business, SVP and CFO Joshua Jepsen said in an earnings call Thursday. In addition to looming trade disruptions, Deere is working through supply challenges related to the farm economy downturn. In North America, large field equipment inventories were down 25% in 2024 over the previous year, with 220-plus horsepower tractors down twice as much as the industry, Josh Beal, Deere’s director of investor relations, said in the call. New combine orders have also been below expectations.
Read more at Manufacturing Dive
Auto Executives Try to Sway Trump on Tariffs, EV Subsidies
Auto executives have been making the rounds in Washington in recent weeks to lobby for a laundry list of priorities. Like CEOs from tech and other sectors, they are meeting with administration officials and others close to the White House to personally put forward their agendas with Trump. The administration’s priorities, particularly on trade, have rattled an industry that spans borders and is heavily reliant on imports for its manufacturing operations. The proposed tariffs threaten to pinch already thin profit margins on some models, and executives fear the withdrawal of federal support for EVs could worsen losses on this technology.
Auto executives from small parts makers to big manufactures say they are spending a lot of time planning different scenarios depending on how and when the tariffs are implemented. Dearborn, Mich.-based Ford has teams of people analyzing the potential fallout if they are enacted and drawing up triage plans throughout its supply chain, finance chief Sherry House said earlier this week. A 25% tariff on steel and aluminum imports that Trump announced Sunday is likely to inflate costs throughout the industry if they take effect as scheduled in March, analysts and executives say. Farley warned that even speculation of tariffs can push prices higher within the supply chain.
Global Warehousing to See Growth in 2025
Driven by rising consumer spending, increased logistics demand, and steady manufacturing output expansion from Q2 onward, the warehouse sector is set for sustained growth through 2025. This is according to the Q3 2024 Warehousing Tracker from Ti Insight , which concludes that warehouse take-up is projected to remain strong across all quarters, indicating continued demand for storage and distribution space.
However, vacancy rates are expected to rise intermittently, particularly in Q4 2024 and Q2-Q4 2025, suggesting that while demand is increasing, new supply may not be keeping pace. New warehouse supply is expected to rebound after Q1 2025, which could help stabilize availability but may not be sufficient to prevent upward pressure on rental costs, which are projected to rise steadily from Q1 onward.
Read more at Nano Nuclear Energy
NANO Nuclear Energy Establishes Facility in New York State to Demonstrate Key Components of its Nuclear Microreactor Designs
NANO Nuclear Energy Inc. (NASDAQ: NNE) (“NANO Nuclear” or “the Company”), a leading advanced nuclear energy and technology company focused on developing clean energy solutions, today announced that it is establishing a purpose-built demonstration facility in Westchester County, New York to be used to demonstrate the operation and viability of several non-nuclear parts and components of NANO Nuclear’s four nuclear microreactors in development: ZEUSTM, ODINTM, LOKI MMRTM and KRONOS MMRTM.
The facility will also support ongoing work on NANO Nuclear’s SBIR Phase III project for its Annular Linear Induction Pump (ALIP) technology. ALIP addresses challenges in high-efficiency thermal fluid management for clean energy and high-temperature industrial processes and is based on electromagnetic (rather than mecha1nical) pumps. A key enabling technology for NANO Nuclear’s suite of nuclear microreactors, ALIP is being further developed under the SBIR Phase III project to accelerate the transition from research to practical products and services.
Boeing Is Getting Its Jet Production Business Back On Schedule By Fixing Fewer Aircraft
Boeing is promising this year to get its jet production to precrisis levels and chip away at a growing backlog of orders. First, the manufacturer needs to clear out the dozens of planes in its shadow factories. A shadow factory is what Boeing executives call a production line where engineers and mechanics work on fixing, maintaining or updating aircraft instead of building new ones. They exist for the company’s two-bestselling models, the 737 MAX and 787 Dreamliner.
As Boeing is struggling to hire and train enough machinists, the shadow factories can occupy some of the company’s most experienced workers. In some cases, Boeing spends more hours inspecting and reworking planes than it did to produce them in the first place. “It’s been a long journey,” finance chief Brian West said in a call last month with analysts, referring to the shadow factories. He predicted Boeing will be rid of its pileup by the middle of this year and doing so will deliver a “massive productivity benefit.” It isn’t the first time Boeing has pledged to solve its shadow-factory problem. The company had initially vowed to be rid of it by the end of 2024, but clearing out the planes has proven vexing.
General Motors To Close Shenyang Assembly Facility In China
General Motors (GM) is set to close its plant in the northeastern of Shenyang, China as part of wider restructuring efforts in the Asian country, reported Reuters citing a company source. The Shenyang facility, which manufactures Buick GL8 minivans and the Chevrolet Tracker SUV, is expected to cease operations this month. The decision comes as GM faces intense competition from domestic manufacturers in China, who have gained market dominance with the support of government subsidies.
At an automotive conference in New York, US, GM CEO Mary Barra was cited by the news agency as saying that GM will focus on “Cadillac, Buick, and its premium import business” in China. GM has partnership with SAIC Motors to manufacture Buick, Chevrolet, and Cadillac vehicles in China. In the Q4 2024, GM reported restructuring charges in China, amounting to $4bn, which included costs associated with plant closures. The company posted a loss of $2.96bn in Q4 2024, a stark contrast to the $2.1bn profit reported in the same period the previous year.
At the ‘Wall Street of Eggs,’ Demand Is Surging
The nation’s biggest egg marketplace doesn’t own hens, farms or processing plants. From an office building in New Hampshire, roughly a dozen people facilitate the trading of billions of eggs a year, a task that shapes what Americans pay per dozen at the supermarket or for omelets at diners. The Egg Clearinghouse, or ECI, is little known outside the industry: It operates an online marketplace that allows participants to place bids on eggs listed for sale and see the results of trades. Only ECI members—farmers and egg buyers—are allowed to trade.
Lately, there are a lot more buyers than sellers using the “Wall Street of Eggs” with bird flu roiling the poultry market. And that is after last year marked the company’s busiest, trading over 2.6 billion shell eggs and 39 million pounds of egg product valued at more than $600 million. Demand has remained steady despite the high sticker prices, prompting some restaurants to add surcharges for egg dishes and consumers to step up purchases of liquid eggs or substitutes.