Member Briefing July 17, 2025
U.S. Sees A Modest Rise in June Industrial Output
Overall industrial production rose 0.3% in June on the heels of an upward revision that lifted May's 0.2% headline decline to an unchanged reading for the month. Relative to the consensus expectation for a scant 0.1% increase, today's print is a modestly encouraging development for a sector that has not felt the wind in its sails for some time. An expected rebound in utilities output of 2.8% more than offsets a decline of 2.5% in the prior month. Still with just an 11% share of total output, it is not as though the gains in utilities provided a massive lift to the headline. Rather, the growth came from actual manufacturing.
Factory output rose just 0.1% in June, that exceeded admittedly modest expectations of no change (0.0%). What makes the feat somewhat more impressive is that most of the upward revision to May's output was in the factory sector. The initially reported May gain of 0.1% now stands at 0.3%, so June's gain is coming off a higher base. While it might be tempting to see the awakenings of a manufacturing renaissance spurred on by tariffs, it is both too soon and not quite accurate to say that. Durable goods manufacturing is where you'd look for early indications that levies were stoking output. As it turned out, durable goods production stalled in June. Gains in primary metals and machinery were offset by declines in output of motor vehicles, electrical equipment and appliances, as well as fabricated metals and wood products.
PPI = 2.3% - Wholesale Inflation Unchanged
The producer price index was flat, according to seasonally adjusted numbers from the Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones had been looking for an increase of 0.2%. The same was true for core PPI, which also was expected to show a 0.2% rise. Combined with Tuesday’s consumer price index release, the data suggests that President Donald Trump’s tariffs are indicating only a marginal bite on the U.S. economy and the prices for goods and services.
On a year-over-year basis, the headline PPI was up 2.3%, compared with 2.7% in May and good for the lowest level since September 2024. The core PPI was at 2.6% on an annual basis, the smallest gain since July 2024. Though the numbers for headline and core wholesale inflation were subdued, final demand goods prices rose 0.3%, but were offset by a 0.1% fall in services. Within the goods category, tariff-sensitive communication equipment posted a gain of 0.8%. Energy prices rose 0.6% in June, while food prices increased 0.2%. Within the food category, chicken eggs tumbled 21.8%. Core goods prices also rose 0.3%.
Machine Tool Demand Down, but Improving
Machine shops and other manufacturers’ demand for new capital equipment remain strong compared to the year-ago record, but new orders for machinery fell to $392.7 million in May 2025, down -11.8% from April. It was the second consecutive month to show a double-digit decline in new orders, though the result is still 2.7% higher than the May 2024 result. For the January-to-May period new orders totaled $2.09 billion, which is 15% above the total for the first five months of 2024. And, as reported by AMT - the Assn. for Manufacturing Technology, the order value for each month of 2025 has outperformed the comparable month of 2024.
As for the origins for the new orders, according to AMT the May results included the largest volume of order activity by “engine, turbine, and power transmission manufacturers” in more than two years, since February 2023. “This is likely an extension of the outsized order activity trend in electrical equipment manufacturing due to increased grid demands from data centers,” according to the Association. May new orders from aerospace manufacturers slowed to their monthly average level, according to AMT, though they continue “trending upward.”
Read more at American Machinist
Global Headlines
Middle East
- Israel Launches Heavy Airstrikes In Damascus, Vowing To Protect Druze - Reuters
- Tehran Say It May Increase Uranium Enrichment To 90 Percent Amid Snapback Sanctions Deadline – Newsweek
- Israel Says It Intercepted Missile Launched From Yemen - Reuters
- IDF opens New Security Corridor In Southern Gaza, Dividing Khan Younis - Newsweek
- At Least 20 Killed In Crush At US-Backed GHF Aid Site In Gaza - BBC
- Through Trial and Error, Iran Found Gaps in Israel’s Storied Air Defenses - 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
- Ukraine’s Prime Minister Resigns, Opening The Door To A Broad Government Reshuffle - AP
- Zelenskiy Aims To Woo Both Public And Trump With Fresh-Faced Ukraine Cabinet – Reuters
- Russia Claims New Victories After Trump Sets Deadline - Newsweek
- EU Tells Trump To ‘Share The Burden’ Of Sending Patriots To Ukraine - Politico
- Russian Attack Targeting Ukraine’s Energy Infrastructure Injures At Least 15 - AP
- The European Charm Offensive That Helped Turn Trump Against Putin - 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
- Commission Haggling Over €1.717 Trillion EU Budget Plan Goes To The Wire – Politico
- Beneath China's Resilient Economy, A Life Of Pay Cuts And Side Hustles - Reuters
- Le Pen Threatens To Topple French Government Over €44B Budget Squeeze - Politico
- Britain’s Secretive Fund For Spies Comes Out Of The Shadows - BBC
- Brazil's Top Court Backs Most Of Lula's Tax Hike Decree After Stalemate With Congress - Reuters
- Chinese Solar Companies Shrink US Footprint As Trump Cuts Incentives – Nikkei Asia
- China's Global Popularity Rises as US Stumbles – Newsweek
Policy and Politics
Senate Poised To Hand Trump $9B In Cuts, Second Big Legislative Victory
Senate Republicans say they have the votes to pass a package of $9 billion in spending cuts, which would give President Trump another big legislative victory in less than a month after GOP leaders quelled a revolt from members of the powerful Appropriations Committee. Russell Vought, the director of the Office of Management and Budget (OMB), told reporters Tuesday that the so-called rescissions package now has enough votes to pass the Senate after he and the Senate GOP leaders agreed to an amendment to remove cuts to the President’s Emergency Plan for AIDS Relief (PEPFAR), the global initiative launched by President George W. Bush in 2003 to combat AIDS.
As a result of the last-minute dealmaking, the overall size of the rescissions package is expected to shrink slightly from $9.4 billion to $9 billion. Senate Majority Leader John Thune (R-S.D.) hailed the bill as a key piece of Trump’s legislative agenda and an important “down payment” on reducing the size of the federal government.
N.Y. Lawmakers: No Plans To Return To Albany To Address Federal Cuts
New York's legislative leaders said they don't currently have plans to call a special session in Albany to respond to less aid from Washington. Gov. Kathy Hochul and officials in the state Budget Division have not decided how to fill a $750 million gap this fiscal year from Medicaid changes in the spending plan. "We are obviously ready to come back should we have to come back, [but] at this moment, that is not what we know right now," Senate Majority Leader Andrea Stewart-Cousins said Tuesday during a virtual press conference about impacts of the bill. "We're willing to come back if we must."
Senate Finance Committee chair Liz Krueger said Tuesday that a special session isn't necessary at the moment. The top Democrat said she expects money from the state's reserve fund will be used to fill a $750 million gap this fiscal year. The state has about $14 billion remaining in reserves. State Budget Director Blake Washington said the state also projects a $3 billion loss in federal funds next year, on top of an anticipated $7.5 billion budget gap. Washington and Governor Hochul maintain nothing has been decided — especially before Congress negotiates Trump's budget this fall — and they're looking to find savings in the most recent $254 billion state budget.
Read more at NY State of Politics
Constellation Will Pursue New York Nuclear Project
Constellation Energy Corp. is planning to pursue a nuclear project in upstate New York, responding to a push from the governor. The biggest US nuclear operator already has three plants in New York, and Chief Executive Officer Joe Dominguez said these would be logical sites for a new reactor. The US is seeing growing enthusiasm for nuclear energy to meet surging power demand driven by artificial intelligence, data centers, factories and increasingly electrified homes. But few companies are willing to take on a major project without government support given cost overruns and delays often drag development.
New York Governor Kathy Hochul last month called for at least 1 gigawatt of new fission power and directed state agencies to develop nuclear. Such a pursuit would potentially result in the first major US reactor in more than a decade, though Hochul didn’t offer details on what kind of plant would be involved or where it would be built. “It makes the most sense to create nuclear where there is existing nuclear,” Dominguez said in an interview Tuesday on the sidelines of the Pennsylvania Energy & Innovation Summit.
Political Headlines
- Trump’s Approval Rating Reaches Low Point In Latest Poll – The Hill
- Trump's Approval On Immigration Falls To Lowest Level Of His Term, Reuters/Ipsos Poll Finds - Reuters
- Mamdani Talks ‘Intifada’, Taxes in Grilling by Business Leaders - Bloomberg
- Trump Says Most House GOP Holdouts Have Agreed To Back His Crypto Bills - Forbes
- Mamdani Clarifies ‘Globalize the Intifada’ Stance in Meeting With Business Elites - WSJ
- Student Loan Payments To Change From August 1: What To Know - Newsweek
- Trump Denies He Is Planning To Attempt To Fire Powell - WSJ
- Trump Will Withdraw Half Of National Guard Deployed In Los Angeles Following Protests - Forbes
- Hassett Grabs Pole Position in Race to Be Trump’s New Fed Chai - Bloomberg
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
Even Healthy Brains Decline With Age. Here's What You Can Do
After about age 40, our brains begin to lose a step or two. Each year, our reaction time slows by a few thousandths of a second. We're also less able to recall items on a shopping list. Those changes can be signs of a disease, like Alzheimer's. But usually, they're not. "Both of those things, memory and processing speed, change with age in a normal group of people," says Matt Huentelman, a professor at TGen, the Translational Genomics Research Institute, in Phoenix. He helps run MindCrowd, a free online cognitive test that has been taken by more than 700,000 adults.
About a thousand of those people had test scores indicating that their brain was "exceptional," meaning they performed like a person 30 years younger on tests of memory and processing speed. Genetics played a role, of course. But Huentelman and a team of researchers have been focusing on other differences. A key protein called Reelin may help stave off Alzheimer's disease, according to a growing body of research. "We want to study these exceptional performers because we think they can tell us what the rest of us should be doing," he says. Early results suggest that sleep and maintaining cardiovascular health are a good start. Other measures include avoiding smoking, limiting alcohol and getting plenty of exercise.
Industry News
Trade Wars
- US And Indonesia Reach Tariff Deal: Details – BBC
- EU Trade Chief To Have Trade Talks In Washington DC, Says EU Spokesperson - Reuters
- Battered Dollar A Boon For U.S. Multinational Companies - Reuters
- Faced With Geopolitics And Trade War, US Companies In China Report Record-Low New Investment Plans - AP
- Jensen Huang Lauds China’s AI Models As Nvidia Gears Up To Resume Chip Exports - CNBC
- GM To Build Silverado, Sierra, Escalade Instead Of EVs At Michigan Plant – Automotive News
- Lula's Approval Ticks Up In Brazil After Trump Threatens Tariffs, Poll Shows - Reuters
- Forget TACO. Trump Is Winning His Trade War. – WSJ
New York Fed Business Leaders Survey: Outlook Neither Optimistic nor Pessimistic
Business activity continued to decline in the region’s service sector in July, though at a slower pace than in recent months, according to firms responding to the Federal Reserve Bank of New York’s Business Leaders Survey. The survey’s headline business activity index edged up four points but held below zero at -9.3.
- The business climate index remained negative at -34.6, with 46 percent of respondents saying that the business climate was worse than normal.
- The employment index moved up six points to 3.8, pointing to a small increase in employment levels.
- The wages index increased nine points to 28.3, indicating that wage growth picked up.
- The prices paid index remained elevated at 64.5.
- The prices received index increased nine points to 30.1, its highest reading since March of 2023.
- The supply availability index rose ten points but remained negative at -7.1, indicating that supply availability worsened.
- Firms became more neutral about the outlook in July after turning pessimistic over the prior few months. The index for future business activity came in at 3.7. Employment is expected to edge up in the months ahead. Supply availability is expected to worsen, and capital spending plans were soft.
ASML Says It May Not Achieve 2026 Growth As Chipmakers Face US Tariff Uncertainty
ASML, the world's biggest supplier of computer chip-making equipment, warned on Wednesday that it may not achieve growth in 2026 as chipmakers building factories in the U.S. await clarity on how hard tariffs will impact them. The uncertainty in tariff negotiations is spurring chipmakers in the U.S. to delay finalizing investments, CFO Roger Dassen told journalists on a media call.
A potential 30% U.S. tariff on European goods could ramp up the price of a single high-end machine to 325 million euros from 250 million euros, he noted. "Clarity is what customers are looking for before they can really finalize their views as to what they're going to do," Dassen said, reiterating ASML's intention to pass such costs on. Beyond a simple tax on a finished machine, the tariffs may pile up for ASML as parts are sent from the Netherlands to the U.S. several times. The direct and indirect impact of tariffs was still very uncertain, CFO Roger Dassen said in the interview, and ASML was working with its supply chain to mitigate any impact.
TSMC Posts Record Quarterly Profit On AI Demand, But Cautious On Tariff Impact
TSMC, the world's main producer of advanced AI chips, posted record, forecast-beating quarterly profit on Thursday but warned that future income might be hit by U.S. tariffs, though perhaps not until the fourth quarter. In the April-June quarter, net profit hit a historic high of $13.5 billion, up 60.7% year-on-year and marking its fifth straight quarter of double-digit growth. Its third-quarter gross margin is expected to fall to between 55.5% and 57.5%, down from 58.6% in the second quarter, also hurt by TSMC's ramp-up of investment in new U.S. and Japanese factories.
However, the company stuck to its capital expenditure plan for the year of $38 billion to $42 billion, and Chief Financial Officer Wendell Huang said it was very unlikely such spending would suddenly drop going forward.
More Key Company Earnings
Johnson & Johnson raised its full-year sales forecast on Wednesday after beating estimates for second-quarter profit on strong demand for its cancer drug, Darzalex, and strength in its medical device business. The company also reduced its expectations for tariff-related costs to $200 million from $400 million for the year, citing the Trump administration's pause on levies on China and other retaliatory tariff measures. On an adjusted basis, the drug and medical device maker earned $2.77 per share for the quarter.Sales in the quarter were $23.74 billion. Reuters
Bank of America on Wednesday posted mixed results for the second quarter, beating estimates on earnings and missing on revenue. Earnings were 89 cents a share and revenue was $26.61 billion. The company said profit climbed about 3% from a year earlier to $7.12 billion, or 89 cents per share, topping the 86 cent estimate. Revenue climbed about 4% to $26.61 billion, below analysts’ expectations, as the firm generated $14.82 billion in net interest income, missing estimates by $70 million. CNBC
Goldman Sachs on Wednesday posted results that topped expectations as its trading operations generated $840 million more revenue than analysts had expected. Earnings were $10.91 a share and revenuewas $14.58 billion. Most of the quarterly revenue beat came from equities trading, which generated $4.3 billion in revenue, a 36% jump from a year earlier and about $650 million more than analysts were expecting. CNBC
PNC Financial (PNC) reported an 11.2% rise in second-quarter profit on Wednesday, aided by higher interest and fee income. Net interest income jumped to $3.56 billion in the second quarter, compared with $3.30 billion a year earlier, benefiting from loan growth and continued repricing of certain fixed-rate assets. M&A activity also picked up in the quarter, anchored by some big-ticket initial public offerings and buyouts. "The strength of our franchise resulted in strong loan and revenue growth even through an uncertain macro environment, while expenses remained well controlled," said PNC chairman and CEO Bill Demchak (An Allegheny College graduate) The lender's net income rose to $1.64 billion, or $3.85 per share, from $1.48 billion, or $3.39 per share, a year earlier. Yahoo Finance
Weekly Mortgage Demand Plummets 10%, As Rates And Economic Concerns Rise
Renewed concerns over tariffs and the broader economy drove treasury yields higher last week, and mortgage rates followed. As a result, total mortgage application volume dropped 10% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.82% from 6.77%, with points remaining unchanged at 0.62, including the origination fee, for loans with a 20% down payment.
Applications for a mortgage to purchase a home dropped 12% for the week but were 13% higher than the same week one year ago. That was the slowest pace since May. The housing market has seen inventory climb since the start of the year, but even potential sellers are starting to pull back, as buyer demand retreats and home prices soften. Applications to refinance a home loan dropped 7% for the week but were 25% higher than the same week one year ago.
GM to Produce Lower-Cost Battery Cells At Tennessee Plant
General Motors is planning to produce lower-cost battery cells at its joint-venture plant with South Korea's LG Energy Solution (373220.KS), opens new tab in Tennessee. The Detroit automaker is rolling out production of lithium-iron-phosphate (LFP) batteries, a technology that is gaining popularity at other automakers in the U.S. including at cross-town rival Ford Motor. GM will begin converting battery cell lines at its Spring Hill, Tennessee facility later this year, and commercial production is expected to begin by late 2027, the company said Monday.
GM and other automakers have pulled back some of their goals around electric vehicle production as demand for the models has been weaker-than-anticipated. Still, auto companies are investing billions in future battery technology and EV production facilities, with the expectation that shoppers will eventually make the switch from traditional gasoline vehicles. GM currently produces nickel-cobalt-manganese-aluminum cells at the factory, and will continue to do so at a plant in Ohio. The cells produced in Tennessee are used for EVs made at the neighboring assembly plant, including the Cadillac Lyriq.
Westinghouse Plans To Build 10 Large Nuclear Reactors In U.S., Interim CEO Tells Trump
Westinghouse plans to build 10 large nuclear reactors in the U.S. with construction to begin by 2030, interim CEO Dan Sumner told President Donald Trump at a roundtable in Pittsburgh on Tuesday. Westinghouse’s big AP1000 reactor generates enough electricity to power more than 750,000 homes, according to the company. Building 10 of these reactors would drive $75 billion of economic value across the U.S. and $6 billion in Pennsylvania, Sumner said.
The Westinghouse executive laid out the plan to Trump during a conference on energy and artificial intelligence at Carnegie Mellon University. Trump issued four executive orders in May that aim to quadruple nuclear power in the U.S. by 2050. The president called for the U.S. to have 10 nuclear plants under construction by 2050. He ordered a “wholesale revision” of the Nuclear Regulatory Commission’s rules and guidelines. The U.S. has built only two new nuclear reactors over the past 30 years, both of which were Westinghouse AP1000s at Plant Vogtle in Waynesboro, Georgia. The project notoriously came in $18 billion over budget and seven years behind schedule.
Daimler Trucks Laying Off 2,000 Workers
Daimler Truck is issuing lay-offs at four U.S. operations and one in Mexico due to slowing demand for medium- and heavy-duty trucks. The cuts are characterized as temporary, but the manufacturer has not indicated the scope of its plan. Daimler Trucks North America is a subsidiary of Daimler Truck AG that designs and manufactures commercial vehicles under the Freightliner Trucks and Western Star Trucks brands, as well as Thomas Built Buses. It also develops electric vehicles and automated driving systems.
Two plants in Charlotte, N.C., one in Detroit and another in Portland, Ore., are targeted, as well as the Saltillo, Mexico, location. The 2,000 affected workers include assembly line workers, painters, supervisors, material handlers, office supervisors, technicians, and logistics staff.
Read more at American Machinist
Joby Flies Hydrogen-Electric Uncrewed Aircraft for Nearly 9 Hours
Joby Aviation appears to have conducted an almost-9-hr. flight of a previously unknown hydrogen-electric-powered uncrewed aircraft. Conducted at the Pendleton UAS Range in Oregon on June 30, the flight was first reported by Hunterbrook Media, the investigative reporting arm of Hunterbrook Capital, which photographed the aircraft being worked on by ground crew at Pendleton Airport.
Photographs taken by Hunterbrook show an aircraft with a high sailplane-style wing and two-blade propellers mounted on the tips of a V-tail–reminiscent of the V-tail tilt prop mounting on Joby’s S4 eVTOL aircraft. Joby has previously hinted it intends to address emerging Defense Department needs for longer-range uncrewed and crewed aircraft by building on its experience modifying an S4 prototype to hybrid hydrogen-electric propulsion.