Member Briefing January 28, 2025
New-Home Sales Up, Prices Down in December
Sales of newly built homes in the U.S. rose 3.6% in December, marking a positive finish to the year. Despite high interest rates that weighed on builders as well as home buyers, builders sold more homes in 2024 than in the previous year, with new-home sales up 2.5% on an annual basis. Sales of new single-family homes in December rose to a rate of 698,000, the Commerce Department reported Monday. The increase in new-home sales is in stark contrast to the state of the resale market. Existing-home sales plunged to the lowest level since 1995 amid high housing costs and a supply shortage. The gap between the prices of new and resale homes has been narrowing over the past year as the resale market faces a big supply shortage.
Unlike resale-home prices, which set a new record in 2024, the median price of a new single-family home sold in the U.S. fell to the lowest level in three years. The median sales price in 2024 was $420,100, which was lower than the median of $428,600 in the previous year. About 29% of the homes sold by builders in 2024 were priced between $300,000 to $399,999, according to federal government data. That’s the highest share among all price categories. A fifth of new homes sold were priced between $400,000 to $499,999.
China’s Manufacturing PMI Contracts in January
China’s factory activity in January unexpectedly contracted, in part due to a slow season ahead of the Lunar New year, reversing the growth seen in the previous three months and keeping alive calls for stronger fiscal support to boost the economy. The official purchasing managers’ index for January came in at 49.1, data released by the National Bureau of Statistics on Monday showed, compared with Reuters poll estimates of 50.1.
The indexes measuring price levels for purchasing and selling major raw materials improved in January — albeit still in contraction territory — Zhao Qinghe, senior statistician at the NBS said in a press release. A gauge of companies’ production and operation activity outlook expanded to 55.3, Zhao added, showing that most manufacturers were increasingly confident about business expansion after the holidays. China’s non-manufacturing PMI, which measures services and construction activity, fell to 50.2 in January, compared to 52.2 in the preceding month.
What Is China’s DeepSeek and Why Is It Freaking Out the AI World?
DeepSeek, a Chinese AI startup that’s just over a year old, has stirred awe and consternation in Silicon Valley after demonstrating breakthrough artificial-intelligence models that offer comparable performance to the world’s best chatbots at seemingly a fraction of the cost. DeepSeek’s emergence may offer a counterpoint to the widespread belief that the future of AI will require ever-increasing amounts of power and energy to develop. The company develops AI models that are open-source, meaning the developer community at large can inspect and improve the software. Its mobile app surged to the top of the iPhone download charts in the US after its release in early January.
The app distinguishes itself from other chatbots like OpenAI’s ChatGPT by articulating its reasoning before delivering a response to a prompt. The company claims its R1 release offers performance on par with OpenAI’s latest and has granted license for individuals interested in developing chatbots using the technology to build on it. Though not fully detailed by the company, the cost of training and developing DeepSeek’s models appears to be only a fraction of what’s required for OpenAI or Meta Platforms Inc.’s best products. The much better efficiency of the model puts into question the need for vast expenditures of capital to acquire the latest and most powerful AI accelerators from the likes of Nvidia Corp. That also amplifies attention on US export curbs of such advanced semiconductors to China — which were intended to prevent a breakthrough of the sort that DeepSeek appears to represent.
Global Headlines
Middle East
- Gaza Hostages Were Held In Tunnels For Months, Israeli Medical Officer Says – Reuters
- Shippers Wary of Red Sea Routes Despite Houthi Pledge to End Targeting - WSJ
- Huge Crowds Await Return To North Gaza After Delays - BBC
- Hezbollah Chief Rejects Cease-Fire Extension: Says Israel Must Withdraw Without Delay - Yahoo
- France Says EU Will Lift Some Sanctions Against Syria – France 24
- Palestinians Stream Back to Northern Gaza on Foot After Hostage-Release Breakthrough - WSJ
- UN Agency UNRWA Says Israel Orders It To Stop East Jerusalem Operations This Week - Reuters
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Kremlin Says It Has Yet To Hear From US About Setting Up A Possible Putin-Trump Meeting– Reuters
- War Plunges Russia Deeper Into Demographic Crisis - VOA
- Putin's Forces Retake Control of Border Village in Russia's Kursk Region - Newsweek
- Russia's Ryazan Oil Refinery Halts Operations After Drone Strikes, Sources Say - Reuters
- Another Ukrainian Brigade Is Disintegrating As It Deploys To Pokrovsk - Forbes
- Ukraine Says Russian Drone Attacks Hit Infrastructure In Several Regions - VOA
- Europe Is Cautiously Optimistic About Trump’s Ukraine Comments - Politico
- A North Korean Colonel Raced Into Battle With Two Automatic Weapons: One For Close Combat, Another For Shooting Down Drones - Forbes
- 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
- Auschwitz Survivors The Focus Of Ceremony To Mark 80 Years Since Camp's Liberation, Holocaust Remembrance Day – CBS News
- Kim Jong Un Is Doing Everything He Can to Keep North Korea’s Youth in Line - WSJ
- Huge Athens Crowds Demand Justice For 2023 Train Crash - BBC
- Sweden Launches Sabotage Probe After Another Data Cable Damaged In Baltic Sea - France 24
- Rain In Southern California Creates Mudflows But Helps Firefighters - VOA
- India, China Agree To Resume Direct Air Services - Reuters
- Rebels Say They Have Taken Key DR Congo City - BBC
- Mexico Creates Nearshoring Incentives In Push For Regional Integration – Supply Chain Dive
- Germany’s Economic Model Is Broken, and No One Has a Plan B - WSJ
Policy and Politics
Public Hearings on Governor’s Budget Start in Albany
A monthlong series of public hearings on Governor Kathy Hochul’s 2025-2026 proposed state budget get underway this week in Albany. The first budget hearing is being held on Tuesday with an examination of the governor’s Agriculture, and Parks and Recreation proposals. The hearings can be viewed on the state Senate website at www.nysenate.gov/events. Archived video of each hearing will be available to view.
Conducted jointly by the Senate Finance Committee, and the Assembly Ways and Means Committee, the forums will examine the governor’s proposals in detail and solicit testimony from state agency officials, public policy and fiscal experts, local government representatives, business leaders, educators, farmers, and other advocates.
Read more and see the schedule at Finger Lakes Daily News
Fed Likely To Hold Rates Steady As It Meets This Week At An Unsteady Moment
U.S. Federal Reserve policymakers meeting next week are expected to keep interest rates on hold but the larger story unfolding will be how the central bank confronts early moves by President Donald Trump that are likely to shape the economy this year, including demands the Fed continue lowering borrowing costs. Trump was already complicating the Fed's job with moves to restrict immigration and raise import taxes, and on Thursday told global business leaders he would call on the Fed to cut interest rates.
Guidance from the Fed "is about a forecast, and today any forecast is about political economy. It is hard to do for an independent agency," said Reinhart. "You cannot move monetary policy on the assumption that there will be tariffs or tax legislation by the end of this year. Right now there are a lot of moving parts." How fast and in what direction Trump's policies spool out in coming months are likely to influence what the Fed hopes will be the last phase of its fight to contain inflation that erupted to a 40-year high in 2022 but is now within about half a percentage point of its 2% target.
House Republicans Retreat To Trump’s Miami Resort To Hash Out His Agenda
It’s decision time for House Republicans as they gather for their annual policy retreat in Florida this week. While they are escaping the frigid conditions in Washington, Republicans must still face divisions in their ranks on how to execute President Trump’s ambitious legislative agenda. House GOP leaders have already indicated that they will try to move Trump’s legislative agenda — encompassing extension of 2017 tax cuts, energy policy, and border policy — in a single bill through the budget reconciliation process, rather than split it into two pieces as some Republicans had wanted in hopes of delivering some Trump wins faster.
This week’s policy retreat, which starts Monday afternoon and ends Wednesday morning, is slated to have a number of meetings among members about what policies to include in the bill and how to offset their cost. While members expect the final details will not be complete for weeks, Republicans will soon have to make a decision about the broad topline number expected in their proposal in order to tee up the legislative vehicle for the Trump agenda reconciliation bill. GOP leaders hope to pass that budget resolution by the end of February. Republicans also must soon make a decision on how they will tackle raising the debt limit — which Trump is demanding they do without letting Democrats exert any leverage.
Trump’s First 100 Days
- President Trump’s Executive Orders on Immigration and What They Mean for Employers – Jackson Lewis
- U.S. Does Not Support Taiwan Independence, Rubio Tells China's Wang – Nikkei Asia
- Trump Officials Waste No Time in Justice Department’s Rightward Shift - WSJ
- Border Czar: Trump Administration Prioritizes Undocumented Migrants Seen As Security Threats - VOA
- Tulsi Gabbard Confirmation: Lindsey Graham Hesitant About Trump’s Pick For Spy Chief - Forbes
- TV Host 'Dr. Phil' Embeds Wtih ICE as They Target Illegal Migrants in Chicago - Reuters
- Trump Helps GOP Whip Tom Emmer Keep Rebels in Line - WSJ
- The Fiscal Handbook for 2025 – Wells Fargo
- Senate Tees Up More Confirmations While House GOP Holds Retreat To Talk Trump Agenda – The Hill
- Trump To Order End To DEI In Military, Reinstate Troops Who Refused COVID Vaccines, Hegseth Says - Reuters
- Trump Claims Victory In Tariff And Migration Standoff With Colombia - Politico
Health and Wellness
5 Key Health Topics To Watch At RFK Jr.'s Senate Confirmation Hearings
On Wednesday, Robert F. Kennedy Jr. is set to appear before the Senate Finance Committee for the first of two confirmation hearings as President Donald Trump’s nominee for secretary of the Department of Health and Human Services. If confirmed, Kennedy would have sweeping control over a suite of 18 agencies, including the Centers for Disease Control and Prevention, the Food and Drug Administration, the National Institutes of Health, and the Centers for Medicare and Medicaid Services.
The hearing is expected to be contentious because of Kennedy’s controversial views, including his repeated false claims linking vaccines to autism — a theory debunked by decades of scientific research. Wednesday’s hearing will be followed Thursday with a hearing in front of the Senate Committee on Health, Education, Labor and Pensions. Here are 5 key health topics to watch for during Kennedy’s hearings.
Industry News
Global Steel Output Drops for Third Straight Year
Global steel production topped 1.8 billion metric tons during 2024, about 10 million metric tons or -0.9% less than during 2023. With a total output of 1.84 billion tons produced across 71 countries, as reported by the World Steel Association, it represents the third consecutive year of narrow declines in output for raw steel – the critical commodity for various industrial and construction markets. The global trend has been shaped on one hand by inflation, which has strained both industrial and construction demand for steel over the past three years, at times made more acute by supply-chain disruptions and regional conflicts.
The most persistent factor shaping global steel production is domestic demand in China – which in any particular month produces well more than half of all the world's raw steel. For the full 12 months of 2024, Chinese steelmakers produced 1.005 billion metric tons, about 55% of the total global output. Indian steelmakers produced 149.6 million last year, 6.3% more than the 2023 total. Traditionally large steelmaking industries in Japan and U.S. proceeded through 2024 in a very disciplined manner, incrementally adding or cutting monthly volumes according to domestic or regional demand. In Japan, total 2024 raw-steel output was 84.0 million metric tons, -3.4% lower than in 2023. The U.S. steel industry’s 12-month total output for 2024 was 79.5 million metric tons (87.6 million short tons), a -2.4% drop from the 2023 result. It was third consecutive year for falling steel output by the U.S. industry.
Read more at American Machinist
Young Workers' Substance Use On The Rise Due To Workplace Pressures
According to a new study published by Substance Abuse Counselor, 69% of Gen Z and 68% of millennials turn to substances on a weekly or daily basis to deal with work-related stress. What’s more, 1 in 3 millennials and 1 in 4 Gen Zers reported increased substance use because of layoffs and AI adoption. Workers aren’t just using substances to relax in their free time. Thirty-four percent of the surveyed workers reported using substances on the job. Much of the substance use seems to be flying under the radar at work, as just 11% said their employers were aware.
“We wanted to run this study because the challenges facing today’s workers are not that of the past. You have technological breakthroughs and more and more people pining over the same jobs. The economic pressures aren’t going away & neither are the workplace stresses. Our culture quite often looks to substance use as a coping mechanism, and the data around that is pretty alarming,” the study says. Sixty-one percent of surveyed workers reported spending at least $50 each month on substances due to work and financial stress. Close to 1 in 5 Gen Z workers spend over $200 a month on substances due to job stress.
Airbus And Partners Explore Thermoplastics For Aircraft Fuselage
inside an anonymous hangar in northern Germany, a matt-black fuselage section – or barrel, in the jargon – could be the super-efficient shape of things to come, Airbus reports. Clean Sky 2, a European Union-funded program, aims to reduce aircraft CO₂, nitrogen oxide, and noise emissions by 30%, aligning with the EU's 2050 climate-neutral target. A key development is the Multifunctional Fuselage Demonstrator (MFFD), an eight-meter-long, four-meter-wide fuselage prototype made primarily from thermoplastic composites.
Thermoplastics, lighter and easier to recycle than traditional materials, eliminate many heavy fasteners and allow for innovative assembly methods, such as ultrasonic and laser spot welding. These techniques streamline production, reduce costs, and lower emissions. The MFFD integrates pre-installed systems in its modular design, simplifying assembly and boosting efficiency. By late 2024, it had surpassed weight-saving goals without added costs, validating over 40 advanced technologies.
Read More at Military & Aerospace Electronics
New Defense Secretary, Issues Message Vowing To ‘Rapidly’ Field Emerging Tech
Newly confirmed Secretary of Defense Pete Hegseth issued a message to the military on Saturday that expressed his intent to quickly field emerging capabilities to deter China and others. “It is the privilege of a lifetime to lead the warriors of the Department of Defense, under the leadership of our Commander in Chief Donald J. Trump. We will put America First, and we will never back down,” the SecDef said in his first “Message to the Force.”
“The President gave us a clear mission: achieve Peace through Strength. We will do this in three ways — by restoring the warrior ethos, rebuilding our military, and reestablishing deterrence,” he added. “We will rebuild our military by matching threats to capabilities. This means reviving our defense industrial base, reforming our acquisition process, passing a financial audit, and rapidly fielding emerging technologies. We will remain the strongest and most lethal force in the world.” The new SecDef also stated that the military’s focus should be on “lethality, meritocracy, accountability, standards, and readiness.”
Coffee Jumps To New Highs As Trump Colombia Tariff Threat Shows Supply Risks
Arabica coffee futures rose to a fresh record after a short-lived US tariff threat against Colombia added to trade uncertainties in a market grappling with tight global supplies. US President Donald Trump over the weekend ordered his administration to impose tariffs and sanctions on Colombia for refusing to allow two military planes carrying deported migrants to land. Soon after, the White House said he would hold off on imposing those measures after reaching a deal on the return of those deported. While the threat proved brief, it highlighted how any trade disruptions could further stoke volatility in the market. Futures in New York gained as much as 2.3% on Monday and are up more than 80% from a year ago.
The move rattled the outlook for coffee shipments at a time when most-active futures for the arabica variety have surged amid harvest shortfalls in major growers. Colombia is the world’s third-largest coffee producer and and second-largest for the arabica variety favored for specialty brews. With at least 40% of its coffee exports heading to the US, it is the South American nation’s biggest market, US Department of Agriculture data show.
Barrie House Coffee Ceases Operations
Barrie House Coffee Company closed their doors and ceased production of their coffee products last week. The century-old Hudson Valley business was started by two business partners in 1934. Operating out of a Westchester garage, Sam Kobrick and Max Goldstein roasted their own coffee beans that were supplied to local diners, restaurants and coffee shops. Read More: 90-Year-Old Hudson Valley Company Bankrupt; Everyone Laid Off.
The company's recipes and trade secrets have been passed down from generation to generation for 90 years, helping the business to become a leading manufacturer of private-label and branded coffee products across North America. But in 2022, Barry Goldstein, Max's grandson, announced that he would be stepping down and appointing a new chairman of the board from outside of the family for the first time. “I recognized that to take the company to the next level in today’s highly competitive environment, the time had come to seek external leadership.” He said in 2022. According to paperwork filed with New York State, all 39 workers at Barrie House's two Westchester locations will be laid off. Five employees at the company's Mount Vernon site and 34 at its plant in Elmsford. The current CEO Scott Montgomery said in the filing that the coffee company will be completely shut down by February 21.
Amscan. Inc. Closes Chester Plant as Part of Party City Bankruptcy
Amscan, Inc. will be closing its plant on Elizabeth Drive in Chester and laying off their remaining 524 employees. According to paperwork filed with the State of New York, the company notified its workers the week before Christmas that they would be losing their jobs in February. Amscan is a party supply manufacturer operated by Party City. The company announced its bankruptcy after Party City revealed that it was filing Chapter 11 and closing all of its 700 stores. The company had already let 117 employees go when it closed its location at the Matrix Business Park on Route 17k in Newburgh in August.
Party City was the largest party supply store in the United States with approximately 6,400 full-time and 10,100 part-time workers as of 2021. The company, which sells balloons, Halloween costumes and other party goods, has stumbled in the face of growing competition from e-commerce sites and pop-up concepts like Spirit Halloween. Competition from big-box retailers like Amazon, Walmart, Costco and others also crushed smaller chains. It also had to contend with rising costs during the pandemic and a helium shortage, which hurt its crucial balloon business. It acquired its then supplier Amscan, in 2022.
Read More at NYS DOL
Completion of Delaware Aqueduct Bypass Under Hudson Paused
Construction of the Delaware Aqueduct bypass under the Hudson River has been temporarily put on hold because of the fall drought the region faced. The bypass connecting a point in the Town of Newburgh to one in the Town of Wappinger was paused, said New York City Department of Environmental Protection spokesman John Millgram. The purpose of the bypass tunnel is to allow for the repair of large leaks in the Delaware Aqueduct in areas of Ulster County and the Newburgh area.
“Simply because the dry spell went way into the end of November, all through October hit an historic drought period, and we did put a pause on the project, and we are right now aiming to restart the final stage of that project this coming October. It’s an eight-month timeframe to actually get that final phase done, the connection of the tunnel under the river.