Member Briefing January 23, 2025
Top Story
U.S. Leading Indicators Lose Momentum as 2024 Ends
The Leading Economic Index, or LEI, published Wednesday by research group The Conference Board, dropped 0.1% in December, following a 0.3% increase in November. That was in line with the expectations of economists polled by The Wall Street Journal. Anemic demand in manufacturing, weakening in the jobs market, a decline in construction permits and low consumer confidence all contributed to the deterioration, The Conference Board’s Justyna Zabinska-La Monica said. Other measures were positive, however, including the contribution from the stock market.
“The LEI's six-month and twelve-month growth rates were less negative, signaling fewer headwinds to US economic activity ahead. Nonetheless, we expect growth momentum to remain strong to start the year and US real GDP to expand by 2.3% in 2025," Zabinska-La Monica said. The CEI reflects current economic conditions and is highly correlated with real GDP. The LEI is a predictive tool that anticipates—or "leads"—turning points in the business cycle by around seven months.
OSHA Tips for Working Safely in Cold Weather
Baby its cold outside. Winter weather can expose outdoor workers to frostbite, hypothermia, and cold stress, all of which can be fatal. It is important to know the wind chill temperature to better prepare and perform the work safely. Follow these work practices to stay safe in cold weather:
- Know the symptoms of cold stress; reddening skin, tingling, pain, swelling, leg cramps, numbness, and blisters.
- Dress properly; wear at least three layers of loose-fitting clothing, insulated gloves and boots, and cover your head.
- Monitor your physical condition and that of your coworkers.
- Stay dry and pack extra clothes; moisture can increase heat loss from the body.
- Take frequent breaks in warm, dry areas.
- Drink warm liquids. For more safety tips, visit OSHA’s Winter Weather page.
What’s Behind The Global Rise In Bond Yields?
The bond market has been undergoing a transformation over the past few months. Yields on longer-term bonds — with maturities of 10 years and up — have been rising. That’s been the case not just in the United States, but in Germany, the United Kingdom, Japan, Italy and France. Loans to governments, of which bonds are one type, come in many flavors. They can last a matter of months, years or decades. They all offer a return — similar to an interest payment — to those who own them.
Over the past few months, investors have been walking away from longer-term bonds because, they’ve decided, the yields were too low. The change in the U.S. has been spurred by a recalculation of what the future U.S. economy looks like. “All of the data, the totality of the data, whether it be on the labor market, sentiment surveys, all of them have been pointing to a stronger U.S. economy,” said Chaudhuri. A stronger U.S. economy still grappling with inflation, that is. If interest rates will be higher down the road to cope with high inflation, so too will yields on short-term Treasury debt in the future. The returns on one-month or three-month Treasuries, for example, are highly influenced by the interest rates controlled by the Federal Reserve.
Global Headlines
Middle East
- Israel Retains Control of Rafah Border Crossing Between Gaza and Egypt – Newsweek
- Aid Is Rushing Into Gaza While the Cease-Fire Holds - WSJ
- Ten Palestinians Killed As Israeli Forces Launch Major Operation In Jenin - BBC
- Iran Tries To Calm Nuclear Concerns As UN Warns On Enrichment - Reuters
- Syria Deals Blow to Putin's Fleet in Mediterranean - Newsweek
- Yemen’s Houthi Rebels Release Crew Of Commercial Vessel Seized In Red Sea In November 2023 - 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
- Trump Tells Putin To End 'Ridiculous War' In Ukraine Or Face New Sanctions – BBC
- Trump’s Ukraine Envoy Has a Hard Climb to Any Peace Deal - WSJ
- Russia's Huge Overspending As War Rumbles On - Newsweek
- Desperate For Peace, Ukraine Embraces Trump - Politico
- Trump Threatens Sanctions, Tariffs on Russia if Putin Won’t End War in Ukraine - WSJ
- Navalny Lawyers Get Jail Time For Doing Their Job - VOA
- UK Monitors Russian Spy Ship, Steps Up Undersea Cable Protection - Reuters
- 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
- US Withdrawals From WHO, Paris Agreement Met With Regret At UN, Calls For Reversal – VOA
- China Seeks Closer Relations With US Allies Amid Trump's Return - Newsweek
- Germany’s Likely Next Chancellor Presents Himself As The Anti-Merkel - Politico
- What Does Being Part of the WHO Mean as US Withdraws? - Newsweek
- Misinformation Deepens Divides In Burkina Faso - VOA
- How Javier Milei’s Tough Remake of Argentina Made Him a MAGA Hero - WSJ
- Mexico Builds Temporary Shelters To Prepare For Mass Deportations From US - Reuters
- Colombia Reactivates Arrest Orders For Top Rebels Blamed For Deadly Violence In Cocaine Turf War - AP
- Brussels Holds Its Breath For Trump’s First Move - Politico
Policy and Politics
Congressional Negotiators Say Bipartisan Funding Deal Possible This Week
House negotiators on both sides said Wednesday that they think a deal on a topline for fiscal 2025 spending could come as soon as this week. Rep. Rosa DeLauro (Conn.), top Democrat on the House Appropriations Committee, told reporters that expectations of a topline agreement by the end of this week or next are “reasonable.” Lawmakers currently have until mid-March to pass legislation to keep the government funded and prevent a shutdown.
House Republicans also said the timeline was discussed as GOP members of the Appropriations Committee huddled earlier on Wednesday on next steps on funding. Rep. Robert Aderholt (R-Ala.), a spending cardinal, told The Hill that the focus of the meeting was to discuss the “path forward” as well as “topline numbers,” which he said could come “by the end of the week, if not first of next week.”
Trump freezes IRA funding
President Donald Trump suspended all Inflation Reduction Act funding disbursements in an executive order Monday, part of a sweeping set of directives to begin setting the new administration’s energy agenda. The action, dubbed “Terminating the Green New Deal,” also pauses all funding disbursements for the Infrastructure Investment and Jobs Act, commonly known as the Bipartisan Infrastructure Law. The two laws were hallmarks of former President Joe Biden’s domestic policy agenda, rolling out billions of dollars in federal funding for clean energy construction and manufacturing projects.
Federal agencies have 90 days to submit reviews and spending recommendations to the Office of Management and Budget and National Economic Council. The funding pauses were part of a larger “Unleashing American Energy” executive order, which specifically called out the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program for review of their processes for issuing grants, loans and contracts.
Read More at Manufacturing Dive
Trump Says He’s Considering A 10% Tariff On China Beginning As Soon As Feb. 1
President Donald Trump said that his team was discussing a 10% tariff on China and that the duty could take effect as early as Feb. 1. “We’re talking about a tariff of 10% on China based on the fact that they’re sending fentanyl to Mexico and Canada,” the president said, speaking to reporters at the White House on Tuesday evening. “Probably Feb. 1 is the date we’re looking at,” he added. The U.S. is China’s largest trading partner on a single-country basis. China’s imports from the U.S. fell 0.1% in dollar terms last year, while exports grew 4.9%, according to official data accessed through Wind Information.
Trump said Friday that he spoke with Chinese President Xi Jinping over the phone about fentanyl and trade. The Chinese side’s readout said Xi called for cooperation and cast the two countries’ economic ties as mutually beneficial. There are “no winners” in a trade war, China’s Vice Premier Ding Xuexiang, told the World Economic Forum in Davos, Switzerland, on Tuesday, according to an official translation. He called for international efforts to support “economic globalization” and “distribute it better.”
Transition 2024
- 24.6 Million People Watched Trump’s Inauguration – Forbes
- What Makes A Good Special Election Candidate? The Race For NY 21. - City & State
- President Trump Names Marvin Kaplan New Chairman for NLRB - IndustryWeek
- Trump Shuts Down Federal DEI Initiatives And Put Staffers On Leave - Forbes
- House Democrats Name Their DOGE Subcommittee Members – The Hill
- An Anxious Federal Workforce Bids Goodbye To Job Stability And Remote Work - WSJ
- Democrats Plot Strategy For Fighting Trump On Funding Freeze - Politico
- GOP Leaders Stare Down Legislative Minefield After Trump’s Day 1 Blitz – The Hill
- Trump’s Biggest Firings So Far: José Andrés, Mark Milley, Coast Guard Chief - Forbes
- Panama Launches Audit of Canal Port Operator Amid Trump Threats - IndustryWeek
- Trump Pushes Hill GOP On Recess Appointments, Debt Limit - Politico
Health and Wellness
Largest-Ever Ozempic And GLP-1 Drug Study Finds They Lower Risk Of 42 Health Conditions, Including Heart Attacks And Alzheimer’s Disease
The study, led by researchers at the Veterans Affairs St. Louis Health Care System, found that use of these GLP-1s, as they are classified, was associated with reduced risks of a number of health problems, including substance abuse disorders, suicidal ideation, schizophrenia and other psychotic disorders. Risk reduction was also found for neurocognitive disorders like Alzheimer’s and dementia, along with infections, liver cancer, and even life-threatening clotting disorders, like blood clots in the lungs.
How and why the drugs have such wide-ranging health benefits is subject to further research, and the GLP-1 drugs were found to increase risks of some conditions, including kidney stones and low blood pressure. On balance, though, the study’s results suggest a new frontier of potential benefits—subject, of course, to further investigation and the test of time. Some of the results were unsurprising. Beyond glucose control and weight loss, benefits like a reduction in the risk of stroke, heart attacks, major cardiac events and kidney disease were expected. But Ziyad Al-Aly, who led the study and is director of the Clinical Epidemiology Center at VA St. Louis Health Care System, was particularly struck by the drugs’ apparent neurologic effects when compared with the care patients would normally receive—that is, without a GLP-1.
Industry News
Stellantis to Build New Truck in Idled Belvidere Plant
Stellantis’ Belvidere, Illinois, plant has a new lease on life. According to the United Auto Workers, who pressured Stellantis to reopen the plant, the Chrysler manufacturer has recommitted to reopening the plant and building a new midsized truck there. At the same time, the company announced it would build the next generation of the Dodge Durango SUV at its Detroit Assembly Complex and increase Jeep parts production at its plant in Toledo, Ohio. Stellantis also said it would build a second phase of its GME-T4 EVO engine in the United States after previously planning to build it elsewhere.
Belvidere Assembly plant indefinitely idled operations in February 2023. Later that year, the UAW issued a trilateral strike against General Motors, Ford, and Stellantis, winning in the eventual contract a commitment to invest $5 billion in restarting the Belvidere plant. But Stellantis dragged its heels, and, following a speech at the Democratic National Convention by UAW President Shawn Fain, confirmed it was delaying plans to reopen. In a release, the UAW laid blame for the closure and delay at the feet of former Stellantis CEO Carlos Tavares, who resigned the company in December last year amid falling profits.
Trump Laid Out A Sweeping Energy Agenda. Here Are All The Key Actions He Took On Day One
President Donald Trump has launched a sweeping offensive on energy during his first hours in office, issuing a raft of executive orders to boost fossil fuel production and roll back U.S. commitments to fight climate change. It’s unclear what impact Trump’s initial actions will have on the energy industry. The CEOs of Exxon and Chevron have said oil and gas production levels are based on market conditions and are unlikely to change meaningfully in response to Trump’s desire to “drill, baby, drill.” The U.S. has been the world’s largest oil and gas producer for years now. And some of Trump’s orders will likely be challenged in court.
Still, the president has made a clear political statement that the U.S. is abandoning the Biden administration’s focus on fighting climate change through a transition to cleaner energy sources. Instead, Trump is prioritizing fossil fuel projects to “solidify the United States as a global energy leader long into the future.” Here are the key actions Trump has taken on energy so far.
Procter & Gamble Earnings Beat Estimates As Shoppers Buy More Household Staples
Procter & Gamble on Wednesday reported quarterly earnings and revenue that beat analysts’ expectations, thanks to growing demand for household staples like toilet paper and laundry products. Here’s what the company reported for the quarter ended Dec. 31: Earnings per share: $1.88 and revenue was $21.88 billion. P&G reported fiscal second-quarter net income attributable to the company of $4.63 billion, or $1.88 per share, up from $3.47 billion, or $1.40 per share, a year earlier.
Net sales rose 2% to $21.88 billion. The company’s organic revenue, which excludes currency changes and divestments, increased 3% in the quarter. P&G’s volume grew 1% during the period. The metric excludes pricing, which makes it a more accurate reflection of demand than sales. Like many consumer companies, P&G has seen weaker demand for its products after several years of price hikes. The company’s baby, feminine and family care division reported the biggest increase in volume, with a 4% jump. P&G credited its family care and feminine care brands, which include its Charmin, Puffs and Tampax products. But baby care organic sales slid by low single digits, as fewer parents bought Pampers diapers.
Johnson & Johnson Beats On Full-Year, Q4 2024 Earnings
Johnson & Johnson beat on fourth quarter and full-year 2024 results, but its stock traded down on Wednesday morning to about $143 per share. Several negative impacts were highlighted in the look-back and look-ahead on an earnings call, despite the company beating Wall Street expectations on revenue by $70 million and reporting results on earnings per share in line with estimates. The good news is somewhat tempered by the ongoing talc case, which has weighed on its growth potential. A lawsuit in Texas is set to begin hearings on Feb. 18 and last up to a month thereafter.
J&J reported total sales of $88.8 billion for 2024, up 4.3% compared to 2023. That includes slowing COVID-19 vaccine sales — a theme other vaccine makers are expected to see with a slower start to the respiratory virus season this year. The company reported earnings per share of $5.79 for 2024, up 11% year over year. Meanwhile, fourth quarter earnings were mixed, with $22 billion in sales, up 5.3% year over year, and earnings per share down 17% from the prior year at $1.41.
Macy's Loses Appeals Court Challenge To NLRB's Expansion Of Money Remedies
A U.S. appeals court on Tuesday rejected Macy's claims that the National Labor Relations Board lacked the power to order the retailer to reimburse workers who were locked out after a strike, creating a circuit split. The San Francisco-based 9th U.S. Circuit Court of Appeals in a 2-1 ruling, opens new tab said that because monetary remedies in NLRB cases serve the broader public purpose of promoting industrial peace, the agency's recent expansion of those remedies was within its powers.
The board first said it would begin ordering employers to reimburse workers for "direct and foreseeable" monetary harms stemming from their illegal conduct, such as credit card fees or out-of-pocket medical expenses, in the 2022 case Thryv Inc. Macy's is one of more than a dozen businesses that has challenged the expanded remedies, claiming that they are no different than the compensatory damages typically sought in private lawsuits, which the NLRB is barred from awarding. The ruling creates a split with the Philadelphia-based 3rd Circuit, which ruled last month in a case involving Starbucks that the expanded remedies exceeded the NLRB's powers.
South Carolina to Reboot Giant Nuclear Project to Meet AI Demand
Santee Cooper plans to announce Wednesday it is seeking proposals for buyers to complete the project at South Carolina’s sprawling V.C. Summer Nuclear Station, according to people familiar with the matter. The state-owned utility is betting interest will be strong, with tech giants such as Amazon.com and Microsoft in need of clean energy to fuel data centers for artificial-intelligence capabilities. The utility is working with bankers at Centerview Partners, which will accept proposals until May 5, the people said.
Santee Cooper will likely look to tap a consortium that could include a construction firm, a tech company that will use the power and an additional partner for capital, the people said. It is also looking for another power company partner because it doesn’t plan to own or operate the units once they are up and running. Construction of two nuclear reactors at the V.C. Summer plant was halted in 2017 after Santee Cooper and the plant’s then-co-owner, South Carolina Electric & Gas—now part of Dominion Energy—had already jointly spent around $9 billion. Nuclear-project builder Westinghouse Electric, a contractor at V.C. Summer, filed for bankruptcy that year, dealing a blow to the plans. The two reactors had been among the first American nuclear power projects in years and were supposed to be operational by 2019.
DOD Issues PPBE Reform Implementation Report
The Department of Defense has released a report providing an overview of the implementation of 26 planning, programming, budgeting and execution, or PPBE, reform initiatives. According to the department, the reforms are organized around four strategic framework objectives: strengthen and simplify strategy to budget to capability; modernize and simplify information sharing; modernize and simplify financial management defense business systems; and invest in today’s and tomorrow’s workforce.
For over six decades, the PPBE process has been foundational to resource allocation, decision-making and execution at DOD. The process underpins how the department supports the current and future National Defense Strategy.
A Record Number Of Consumers Are Making Minimum Credit Cards Payments As Delinquencies Also Rise
The share of active credit card holders just making minimum payments rose to 10.75% in the third quarter of 2024, the highest ever in data going back to 2012. The share of card holders more than 30 days past due rose to 3.52%, an increase from 3.21%, for a gain of more than 10%. Even with the rising delinquency rate, however, it is still well below the 6.8% peak during the 2008-09 financial crisis and not yet indicative of serious strains.
The news counters a general narrative of a healthy consumer who has kept on spending despite inflation hitting a more than 40-year high in mid-2022 and holding above the Fed’s 2% target for nearly four years. Adjusted for inflation, consumer spending rose 2.9% on an annual basis in November, according to Goldman Sachs, which noted Tuesday that it sees consumers as “a source of strength” in the economy. The firm estimates that consumer spending will slow some in 2025, but still grow at a healthy 2.3% real rate this year, and Goldman sees delinquency rates showing signs of leveling.