Member Briefing January 29, 2025
Durable Goods Orders Declined 2.2% in December… But US Core Business Equipment Orders Increase by More Than Forecast
New orders for manufactured durable goods in December, down four of the last five months, decreased $6.3 billion or 2.2% to $276.1 billion, the U.S. Census Bureau announced Tuesday. Look past the aircraft-related decline in durable goods orders, however, and there is a rather encouraging uptick in demand for core capital goods where both orders and shipments rose more than expected in December on the heels of upward revisions.
- Excluding transportation, new orders increased 0.3%. Excluding defense, new orders decreased 2.4%. Transportation equipment, also down four of the last five months, drove the decrease, $6.9 billion or 7.4% to $86.1 billion.
- Shipments of manufactured durable goods in December, up following four consecutive monthly decreases, increased $2.6 billion or 0.9% to $287.4 billion. This followed a 0.2% November decrease. Transportation equipment, also up following four consecutive monthly decreases, led the increase, $2.5 billion or 2.8% to $93.2 billion.
- Unfilled orders for manufactured durable goods in December, down following five consecutive monthly increases, decreased $6.4 billion or 0.5% to $1,396.2 billion. This followed a 0.2% November increase. Transportation equipment, also down following five consecutive monthly increases, drove the decrease, $7.1 billion or 0.8% to $898.6 billion.
- Inventories of manufactured durable goods in December, up two consecutive months, increased $2.4 billion or 0.4% to $533.0 billion. This followed a 0.5% November increase. Transportation equipment, also up two consecutive months, led the increase, $1.9 billion or 1.1% to $174.6 billion.
Confidence Slips in January Amid Concern About Jobs, Inflation
The Conference Board reported that its consumer confidence index retreated this month to 104.1, from 109.5 in December. That is worse than the economist projections for a reading of 105.8. December’s reading was revised up by 4.8 points but still represented a decline from November. The consumer confidence index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
The board said that consumers’ view of current conditions tumbled 9.7 points to a reading of 134.3 in January and views on current labor market conditions fell for the first time since September. The measure of Americans’ short-term expectations for income, business and the job market fell 2.6 points to 83.9. The Conference Board says a reading under 80 can signal a potential recession in the near future. However, the proportion of consumers expecting a recession over the next 12 months remained stable at the low end of the series range.
DeepSeek Sets Stage For Frenetic Tech Earnings Season
The news surrounding the power and efficiency of China’s DeepSeek roiled tech markets Monday and landed just in time to give U.S. tech investors a reason to pay particularly close attention to earnings season, which kicks off after the bell Wednesday. DeepSeek, an artificial intelligence lab based in Hangzhou, released a reasoning model called R1 last week that outperformed OpenAI’s latest model in many third-party tests. In late December, DeepSeek launched a free, open-source large language model that it said took only two months and less than $6 million to build. The startup was founded in 2023.
While there’s plenty of skepticism surrounding DeepSeek’s claims, the latest pronouncements caused a panic on Wall Street due to the potential implications of significantly cheaper AI models coming sooner rather than later. Meta, Microsoft and Tesla all report quarterly results Wednesday and are among the megacap tech companies spending billions of dollars on AI infrastructure, with the biggest checks going to pay for Nvidia’s GPUs. Apple reports results Thursday, followed by Alphabet and Amazon next week. The big immediate issues for those companies with respect to DeepSeek are less about revenue and more about costs. It’s a topic they tend to spend a lot of time talking about on earnings calls.
Global Headlines
- Middle East
- Israel Says 8 of the 26 Hostages Listed for Imminent Release Are Dead – NYT
- Israel Says Netanyahu Invited To Meet Trump At White House Next Week - BBC
- What it Will Take to Rebuild Gaza - Newsweek
- Will Iran and Russia’s Growing Partnership Go Nuclear? – Foreign Affairs
- More Than 300,000 Palestinians Returned To Gaza City, Authorities Say - VAO
- Iran Issues Warning to Israel After Buying Russian Fighter Jets - Newsweek
- Trump Order Freezing Foreign Aid Halts Programs Worldwide, Prompts Confusion and Rush for Waivers - WSJ
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Amid Talk Of A Ceasefire, Ukraine’s Front Line Is Crumbling – The Economist
- At Least 11 Baltic Cables Sabotaged in 15 Months: What to Know - Newsweek
- Abramovich Dodged Millions In Tax With Superyachts-For-Hire Scheme - BBC
- Russian Oil Tankers U-Turn and Then Halt Near France After Storm - Yahoo
- How Vladimir Putin Killed The EU’s Frugal Coalition - Politico
- Amid A National Conscription Crisis, One Ukrainian Unit Takes A Different Approach - Forbes
- Ukrainian Officials Say Russian Drone Attacks Cause Injuries In Several Regions - VOA
- 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
- World Map Shows Most Dangerous Conflicts for US in 2025 – Newsweek
- Rwanda, Congo Presidents To Meet As Rebels Take Goma, Kenya's Leader Says - VOA
- Serbia's PM Resigns Following Deadly Canopy Collapse Protests - Newsweek
- Tesla, BMW Sue EU as Tension Mounts on Chinese EV Tariffs - WSJ
- Bocuse d'Or: French Chefs Defeat Danes To Reclaim Coveted Culinary Prize – France 24
- Appeals Court Skeptical Of Feds’ Bid To Back Out Of 9/11 Plea Deals - Politico
- US and Allied Jets Flex Air Power Against China - Newsweek
- Global Economy Takes Trump Guessing-Game In Stride – Yahoo Finance
- France Is Furious Over a Few Stained-Glass Windows in Notre Dame - WSJ
Policy and Politics
Back in Play for 2025 Session: Packaging Reduction and Recycling Infrastructure Act and the Bigger Better Bottle Bill
Environmental advocates are gearing up for a fresh fight over plastic waste. They descended on the state Capitol Tuesday, the day of the joint budget hearing on environmental conservation, to push for legislation that would reduce plastic packaging and update New York’s bottle bill. But opponents of the legislation will also be making their voices heard to lawmakers early.
Lawmakers came close to approving the Packaging Reduction and Recycling Infrastructure Act last session. That bill would require the state to reduce its use of single-use plastic packaging by 30% over the next 12 years. The bill would do this through the creation of an extended producer responsibility program, which would put the cost of recycling on the plastics producers by requiring companies that sell or distribute certain plastic packaging materials and have over $1 million in annual revenue to pay a fee that would go to municipalities. Advocates on Tuesday also kicked off a campaign for legislation known as the Bigger Better Bottle Bill, which would update the state’s bottle deposit program. The bill would increase the deposit fee from 5¢ to 10¢, make more kinds of bottles and cans eligible for deposits and raise the handling fee to help redemption centers stay open.
Fed’s Tariffs Response Hinges on Where Americans Think Prices Are Headed
A key question looms over the Federal Reserve as President Trump contemplates bolder uses for tariffs in his second term: How much would any price increases fuel expectations of higher inflation by the broader public? The Fed is widely expected to hold its benchmark interest rate steady at its two-day meeting that concludes Wednesday, taking a pause after cutting short-term rates by a full percentage point at its last three meetings.
When or whether the Fed resumes cuts rests in large part on the outlook for inflation which, in turn, could be shaped this year by whether Trump follows through on threats to raise tariffs. Last week, Trump said he was considering whether to impose higher duties on imports from Canada and Mexico by this Saturday. Tariffs remain a key wild card for the Fed’s outlook because of concerns over how they could influence businesses’ and consumers’ expectations of future inflation. Because the Fed hardly ever changes interest rates based on policy outcomes that haven’t happened, the Fed is unlikely to react until tariff increases materialize, Steven Kamin with the American Enterprise Institute said.
OpenAI Launches ChatGPT Gov For U.S. Government Agencies
OpenAI on Tuesday announced its biggest product launch since its enterprise rollout. It’s called ChatGPT Gov and was built specifically for U.S. government use. The Microsoft backed company bills the new platform as a step beyond ChatGPT Enterprise as far as security. It allows government agencies, as customers, to feed “non-public, sensitive information” into OpenAI’s models while operating within their own secure hosting environments, OpenAI CPO Kevin Weil told reporters during a briefing Monday.
The user interface for ChatGPT Gov looks like ChatGPT Enterprise. The main difference is that government agencies will use ChatGPT Gov in their own Microsoft Azure commercial cloud, or Azure Government community cloud, so they can “manage their own security, privacy and compliance requirements,” Felipe Millon, who leads federal sales and go-to-market for OpenAI, said on the call with reporters. For as long as artificial intelligence has been used by government agencies, it’s faced significant scrutiny due to its potentially harmful ripple effects, especially for vulnerable and minority populations, and data privacy concerns.
Trump’s First 100 Days
- Trump Administration To Offer Buyouts To All Federal Workers Ahead Of Return To Office – The Hill
- Trump Aid Freeze Stirs Chaos Before It Is Blocked In Court - Reuters
- Trump Removes NLRB General Counsel And Dem Member – Bloomberg Law
- Trump Pauses Federal Grants and Loans, Effective Tuesday: Live Updates – Newsweek
- Predator Drone Maker Asks Musk's DOGE To Cut Pentagon Red Tape, Letter Shows - Reuters
- Gabbard’s Path Through Intelligence Committee Narrows Ahead Of Key Hearing – The Hill
- Hegseth Highlights ‘Iron Dome For America’, Other First Priorities As New SecDef – Defense Scoop
- Democrats Demand Info On DOJ Shakeup, Firings - Politico
- To Limit Chinese Influence On Commercial Tech Partners, Pentagon Plans Big Changes - Defense One
- Trump Ramps Up Deportation Effort After Slow Start - WSJ
- Colombian Air Force Planes Fetch Deportees From US - BBC
- Justice Department Fires Lawyers Who Prosecuted Trump - WSJ
- Trump Signs Orders Affecting Transgender Troops, DEI – The Hill
Health and Wellness
FDA Approves Novo Nordisk’s Diabetes Drug Ozempic For Chronic Kidney Disease
The Food and Drug Administration on Tuesday approved Novo Nordisk’s Ozempic for patients with chronic kidney disease and diabetes, expanding the use of the wildly popular injection in the U.S. The drug is already widely used and covered to treat Type 2 diabetes. The FDA’s decision means Ozempic can now be used to reduce the risk of kidney disease worsening, kidney failure and death from cardiovascular disease in patients with both chronic kidney disease and diabetes.
The decision could transform how doctors treat patients with the condition, which involves a gradual loss of kidney function and is one of the leading causes of death in the U.S. Around 37 million American adults are living with chronic kidney disease, according to Novo Nordisk. Diabetes is a key risk factor for kidney disease. Roughly 40% of Type 2 diabetes patients have the condition, which can cause additional sickness such as increased risk of cardiovascular problems and death, Novo Nordisk said.
Industry News
Amscan Will Host Job Fair for Laid Off Workers February 13th at Chester Location
Earlier this month Amscan, Inc. announced that, as a result of its bankruptcy, it was closing its Chester New York facility and laying off the 500 or so workers there effective mid-February. The company ‘s HR team is working very hard to help their staff find employment elsewhere in the region. They have shared that they will be hosting an onsite job fair to bring employers into Amscan to meet their employees.
Thursday, February 13, 2025
1:30 – 6:00 PM
47 Elezabeth Drive
Chester, NY 10918
Main Cafeteria
Contact Shanique Warren at Amscan to learn more
GE, P&W Split $7 Billion for Jet Engine R&D
The U.S. Air Force issued a total of $7 billion to two manufacturers working on the prototype stage for their respective roles in the Next Generation Adaptive Propulsion (NGAP) program. The GE Edison Works, a part of GE Aerospace devoted to research and development of military aircraft engines; and Pratt & Whitney Engines, have drawn separate awards of $3.5 billion, “for technology maturation and risk reduction services” in executing the prototype phase of the anticipated fighter jet engine technology.
Both awards are structured as modifications to previously awarded contracts, and assign the contractors to design, analyze, rig test, build and test prototype engines, and define weapon system integration, with their work expected to be complete by July 13, 2032. The NGAP program is a USAF initiative seeking to identify adaptable jet engine technology for the "Next Generation Air Dominance" (NGAD) program, a parallel effort to define and develop a new fighter aircraft.
Read more at American Machinist
Boeing Reports $11.8-Billion Annual Loss After Crisis-Ridden Year
Boeing reported on Tuesday an annual loss of $11.83 billion, its largest since 2020, as it grappled with problems at its commercial and defense units and the fallout from a crippling strike by U.S. West Coast factory workers. The loss demonstrates the challenges facing CEO Kelly Ortberg in turning around the U.S. planemaker as it cedes ground to rival Airbus in the delivery race and comes under the crosshairs of regulators and customers following a series of missteps. Ortberg reiterated the company's four-part plan to turn the business around, including a multi-year effort to fix Boeing's culture, "perhaps the most important change we need to make."
For the quarter, the company reported a cash burn of $4.1 billion, a metric closely watched by investors, slightly lower than analysts' expectation of a $4.26-billion cash burn, according to data compiled by LSEG. For the quarter, the company reported a cash burn of $4.1 billion, a metric closely watched by investors, slightly lower than analysts' expectation of a $4.26-billion cash burn, according to data compiled by LSEG.
GM beats Wall Street estimates, forecasts another year of strong earnings in 2025
General Motors beat Wall Street’s top- and bottom-line expectations for the fourth quarter, while forecasting continued strong results for 2025. The Detroit automaker believes it can have another solid year despite industry sales slowing, a restructuring of its operations in China, and increased geopolitical and regulatory uncertainty in the U.S. as President Donald Trump begins his second term.
Earnings per share were $1.92 adjusted vs. $1.89 estimated and Revenue was $47.7 billion vs. $43.93 billion estimated. GM CFO Paul Jacobson said the company’s 2024 performance was “outstanding,” citing growth in its EV and traditional internal combustion engine businesses. GM reported a roughly $3 billion loss for the fourth quarter, including included $5 billion in special charges such as $4 billion in noncash restructuring charges related to its operations in China and $500 million in charges related to the decision to stop funding its Cruise robotaxi business. GM’s 2025 guidance includes net income attributable to stockholders of $11.2 billion to $12.5 billion, or $11 to $12 in earnings per share; adjusted earnings before interest and taxes (EBIT) of $13.7 billion to $15.7 billion, or $11 to $12 adjusted EPS; and adjusted automotive free cash flow between $11 billion and $13 billion.
Japan's Honda Eyes Launching Sub-$30,000 EV In North America
Honda Motor plans to launch a small electric vehicle priced below $30,000 in North America by as early as 2026, the Nikkei newspaper said on Tuesday, as it plays catch-up in the battery-powered car market. The automaker will produce the low-cost model locally, the Nikkei said, adding it will roll it out as part of its upcoming "Honda 0 Series" global EV lineup.
A Honda spokesperson said that while the automaker aims to release an EV priced below $30,000 as an entry-level model as part of the series, the company has not made any decision yet on whether to release that model in North America.
Hyundai’s Revenue Jumped 11.9% in 2024
Hyundai Motor Co. sold 4.1 million vehicles globally in 2024, a 1.8% year-over-year decrease, the company reported in its full-year and Q4 business results on Jan. 23. The automaker’s Q4 revenue jumped 11.9% YoY to 46.62 trillion won ($32.5 billion), with an operating margin of 6.1%. The U.S. market was one of Hyundai’s biggest global sales regions, with retail sales of 988,000 vehicles in 2024, a YoY jump of 9%, according to its regulatory filing. However, the automaker said its YoY operating income fell by 17.2% in Q4 due to higher warranty costs and bigger incentives to boost sales.
Hyundai also continues to grow its electrified vehicle sales, including pure electric and hybrid models. Eco-friendly models accounted for 22.1% of the U.S. automaker’s sales volume in Q4, with hybrid models accounting for 16.2% of the segment. For the full year, the combined sales of eco-friendly models in the U.S. jumped 24.4% to 217,000 units, with sales of pure EVs down slightly as consumers opt for more affordable hybrid models.
EIA Forecasts Natural Gas Demand to Outpace Supply Over the Next 2 Years
Over the next two years, EIA expects natural gas demand in the U.S. to grow more than natural gas supply. EIA forecasts supply of natural gas, including both production and imports, to rise by 1.4 Bcf/d in 2025, while demand for natural gas, including domestic consumption and exports, rises by 3.2 Bcf/d. Exports are the leading source of natural gas demand growth. EIA expects exports of natural gas by pipeline and as liquefied natural gas (LNG) to increase by 2.9 Bcf/d in 2025, with most of the increase coming from LNG exports. Two new LNG export facilities—Plaquemines LNG and Corpus Christi LNG Stage 3—started producing LNG in December 2024, and Plaquemines LNG loaded its first cargo on December 26.
EIA also forecasts consumption in the residential and commercial sectors to increase in 2025 to meet expectations of colder weather than in 2024. However, the forecast sees a decrease in consumption in the electric power sector in 2025 as natural gas prices rise and more renewables and coal are used to generate electricity, displacing some natural gas-fired generation capacity. The U.S. begins 2025 with 6% more natural gas in storage than the previous five-year average. With demand growth outpacing supply growth this year, EIA expects inventories will be drawn down to 4% below the five-year average by the end of 2025. As the storage surplus of the last two years diminishes, we expect some upward pressure on prices.
Read More at Engie
Egg Prices Are Soaring. Don’t Expect That To Change Anytime Soon
Bird flu is forcing farmers to slaughter millions of chickens a month, pushing U.S. egg prices to more than double their cost in the summer of 2023. And it appears there may be no relief in sight, given the surge in demand as Easter approaches. The average price per dozen nationwide hit $4.15 in December. That’s not quite as high as the $4.82 record set two years ago, but the Agriculture Department predicts prices are going to soar another 20% this year. More than 145 million chickens, turkeys and other birds have been slaughtered since the current outbreak began, with the vast majority of them being egg-laying chickens.
Cage-free egg laws in 10 states may also be responsible for some supply disruptions and price increases. The laws set minimum space for chickens or cage-free requirements for egg-laying hens. They’ve already gone into effect in California, Massachusetts, Nevada, Washington, Oregon, Colorado and Michigan. At a Target in Chicago on Monday, a dozen large conventional eggs cost $4.49 but a dozen large cage-free eggs were selling for $6.19. Some grocery stores have even limited how many eggs shoppers can buy.