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Member Briefing July 2, 2025

July 2, 2025

Posted By: Harold King in Daily Briefing,

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ISM Manufacturing PMI Shows Slight Improvement, Still in Contraction

The Institute of Supply Management (ISM) Purchasing Managers Index (PMI) indicates a slight uptick in the health of the manufacturing sector. The data shows the actual PMI value at 49.0, a fractional improvement from the previous figure of 48.5. Although the actual number is higher, it’s important to note that a PMI reading below 50 signals a contraction manufacturing sector. This slight increase indicates a somewhat more positive outlook for the manufacturing sector, although it still remains in a contraction phase.

The ISM Manufacturing PMI is based on data compiled from monthly replies to questions asked of purchasing and supply executives in over 400 industrial companies. This report provides insight into various aspects of the manufacturing industry, including new orders, backlog of orders, new export orders, imports, production, supplier deliveries, inventories, customers’ inventories, employment, and prices. Tariffs are a top-of-mind worry across businesses with nine out of ten purchasing managers mentioning it in their responses. While tariffs are a universally held concern, it is clear that some industries are impacted more than others. In the machinery space, for example, one respondent said the "tariff mess has utterly stopped sales globally and domestically. Everyone is on pause. Orders have collapsed." The new orders component dropped to 46.4

Read more at Wells Fargo

JOLTS: Job Openings Rise To 7.76 Million In May, Hires and Separations Little Changed From April

The number of job openings on the last business day of May stood at 7.769 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This reading followed 7.395 million openings reported in April and came in above the market expectation of 7.3 million. The rise in job openings could signal a strengthening labor market, potentially leading to increased consumer spending and overall economic growth. However, it also poses challenges for employers who may struggle to fill these positions in a timely manner.

Over the month, both hires and total separations were little changed at 5.6 million and 5.3 million, respectively. Within separations, quits (3.2 million) and layoffs and discharges (1.8 million) changed little," the BLS noted in its press release. There were 414,000 openings in manufacturing in May up from 392,000 in April but down from 576,000 a year earlier. There were 278,000 Hires in May, down from 330,000 in April and from 350,000 a year earlier. Total Separations in the sector were 287,000 in May, lower than the 316,000 in April and the 345,000 in May of 2024. Of those 278,000 separations 114,000 were layoffs and discharges while 154,000 were quits.

Read more at the BLS

Powell Confirms That The Fed Would Have Cut By Now Were It Not For Tariffs

Federal Reserve Chair Jerome Powell said Tuesday that the U.S. central bank would have easier monetary policy by now if not for President Donald Trump’s tariff plan. When asked during a panel if the Fed would have lowered rates again by now had Trump not announced his controversial plan for levies on many foreign trading partners earlier this year, Powell said, “I think that’s right.”

“In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs,” Powell added at the event, which took place during a European Central Bank forum in Sintra, Portugal.

Read more at CNBC

Global Headlines

Middle East

Ukraine

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Policy and Politics

Senate Passes Trump’s Megabill After All-Night Session

Republicans squeaked President Trump’s tax-and-spending megabill through the Senate on Tuesday, capping a long night of dealmaking to win over holdouts, with a tie-breaking vote from Vice President JD Vance. The Senate’s 51-50 action puts Republicans on the verge of locking in Trump’s top legislative priorities—extended tax cuts, new tax breaks, reductions in Medicaid spending and more money for border enforcement and defense. They are using their full but narrow control of Congress to pull money from safety-net programs and the clean-energy industry and redirect it to national security and taxpayers.

The focus now shifts to the House, where the Senate bill has irritated multiple factions of Republicans in a chamber they control 220-212. Moderates worry about the Medicaid cuts affecting hospitals and patients in their districts. Others complain that the Senate violated a House framework designed to keep the difference between tax cuts and spending cuts at or below $2.5 trillion. Speaker Mike Johnson (R., La.) has just three days to meet Trump’s July 4 deadline, and House members are only seeing the final Senate version Tuesday. There are no real consequences from missing the July 4 deadline that Trump set, but any changes would require another Senate vote.

What’s in the Bill - NBC

Read more at The WSJ

Siena Poll: Hochul Leads 3 Potential Republican Challengers by 20-25 Points But Does Not Hit 50%; More than ¼ of Voters Undecided

Governor Kathy Hochul – whose favorability, job approval, and generic re-elect numbers are little changed from last month – leads each of three potential Republican 2026 gubernatorial candidates by at least 20 points, according to a new Siena College Poll of New York State registered voters released today. Hochul leads Nassau County Executive Bruce Blakeman 44-19%; she leads Representative Elise Stefanik 47-24%; and she leads Representative Mike Lawler 44-24%. “While the early leads seem large, Hochul is not hitting the ‘magic’ 51% mark against any of these opponents, and in each matchup, between a quarter and a third of voters wasn’t able to choose between the two candidates,” Siena College Research Institute Director Don Levy said. Other Key Numbers:

Hochul’s favorability rating is 42-47%, down slightly from 44-46% in May. Her job approval rating is 50-45%, barely changed from 50-46% last month.
One year out from a potential primary, two in five Republicans don’t know who they’ll support among Stefanik, Lawler and Blakeman, but Stefanik maintains an early lead, 17 points ahead of Lawler, who is 11 points ahead of Blakeman.
Stefanik has a 25-32% favorability rating (25-35% last month), while Lawler’s is 22-24%
On the Democratic side, Hochul has huge leads of 37 points over Delgado and 39 points over Torres, each of whom remains largely unknown to more than half of Democrats.
By 44-37%, voters say Manhattan’s congestion pricing tolling plan should be eliminated, up a little from 41-39% in May.
Voters are considerably less optimistic about the direction of the state this month, saying that New York is headed in the wrong direction (50%) rather than on the right track (37%). In May, voters thought the state was headed in the wrong direction by a much narrower 46-43%.
Voters support what some call medical aid in dying and others call physician assisted suicide, 54-28%.

Read more at Siena University

Map Shows States Americans Are Moving From and To

With declining births and slower immigration following the Trump administration's strict deportation policies, domestic migration is bound to become an increasingly more important driver of U.S. population change, a recent study found. Florida and Texas, which have both been among the fastest-growing states in the nation for years, know what a positive impact a booming population can have on the local economy and job market, as well as what happens when this demographic explosion starts to wane.

This year's State of the Nation's Housing report, released earlier this week by the Joint Center for Housing Studies (JCHS) of Harvard University, found that the movement of Americans across the country has declined in 2024 all across the country, including in the states that are traditionally the most popular among movers. Last year, according to researchers, the nation reported the lowest rates of household mobility on record since the 1970s. The number of residents moving out of California, for example, dropped by 30 percent in 2024, from −344,000 in 2023 to −240,000 in 2024. New York, another state where out-migration has surpassed in-migration in recent years, lost 121,000 people on net to interstate migration in 2024, about 30 percent fewer than in 2023 (−177,000) and 60 percent fewer than in 2022 (−296,000).

Read More at Newsweek

Political Headlines

Health and Wellness

Is RFK Jr's Divisive Plan To Make America Healthy Again Fearmongering - Or Revolutionary?

There's a saying that Robert F Kennedy Jr is very fond of. He used it on the day he was confirmed as US health secretary. "A healthy person has a thousand dreams, a sick person only has one," he said as he stood in the Oval Office. "60% of our population has only one dream – that they get better." The most powerful public health official in the US has made it his mission to tackle what he describes as an epidemic of chronic illness in America, a catch-all term that covers everything from obesity and diabetes to heart disease. His diagnosis that the US is experiencing an epidemic of ill health is a view shared by many healthcare experts in the country.

But Kennedy also has a history of promoting unfounded health conspiracies, from the suggestion that Covid-19 targeted and spared certain ethnic groups to the idea that chemicals in tap water could be making children transgender. And after taking office, he slashed thousands of jobs at the Department of Health and Human Services and eliminated whole programs at the Centers for Disease Control (CDC). "On the one hand, it's extraordinarily exciting to have a federal official take on chronic disease," says Marion Nestle, a retired professor of public health at New York University. "On the other, the dismantling of the federal public health apparatus cannot possibly help with the agenda."

Read more at The BBC

Industry News

Construction Spending Weakens in May

Construction spending dipped 0.3% in May, the seventh straight monthly decline. The drop largely was broad-based, with total residential and nonresidential outlays pulling back during the month. While home improvement, data center, infrastructure and institutional outlays generally continue to outperform, high interest rates and elevated economic uncertainty remain a significant headwind for new project starts.

High interest rates are knocking back residential construction. Residential construction spending dipped 0.5% in May, the fifth consecutive decline. Taken year-to-date, residential outlays have receded 3.4%.
Persistent housing market affordability issues are dampening single-family construction, prompting a notable 1.8% downturn in single-family outlays in May.
Home improvement outlays rose 1.1% in May, the first upturn in six months.The high mortgage rate environment may be pushing consumers to invest in home improvements instead of purchase new homes.
The tide appears to be turning in favor of multifamily construction. Multifamily outlays have been essentially flat since January and the year-over-year decline in outlays softened to 10.9% in May, the softest annual decline in 12 months. The stabilization in activity occurred against a backdrop of stronger apartment demand and steadying apartment vacancy rates.
Nonresidential construction has taken a turn lower. Overall outlays declined 0.2% in May, driven by a 0.4% drop in private construction. Although still elevated, private nonresidential outlays have receded for three consecutive months and are down 1.8% since February.
Manufacturing construction notched another step down in its pullback from recent heights. Private manufacturing outlays declined 0.1% in May, sinking spending 3.8% year-over-year. This downshift was largely owed to a 6.6% annual decline in spending on computer and electronic/electrical facilities, a category which includes semiconductor plants.

Read more at Wells Fargo

Iran May Go After US Defense Firms With Cyber Attacks, Warn Pentagon, Homeland Security

With a tenuous ceasefire holding in the wake of US and Israel airstrikes on Iran, the Departments of Defense and Homeland Security have both issued stern reminders of the Iranian cyber threat, especially to US defense contractors. Homeland Security’s Cybersecurity & Infrastructure Security Agency (CISA), in conjunction with the NSA and the Department of Defense Cyber Crime Center (DC3), today specifically warned US defense contractors working in Israel that they may find themselves the target of Iranian cyber attacks.

“This joint fact sheet details the need for increased vigilance for potential cyber activity against U.S. critical infrastructure by Iranian state-sponsored or affiliated threat actors,” the DHS-NSA-DC3 statement said. “Defense Industrial Base companies, particularly those possessing holdings or relationships with Israeli research and defense firms, are at increased risk.” While Iranian hackers are less infamously skillful than Russian or Chinese ones, they have a long history of politically motivated digital vandalism against businesses, governments, and even Boston Children’s Hospital.

Read more at The WSJ

Packaging Corp To Buy Greif's Containerboard Business For $1.8 Billion

Packaging Corporation of America announced Tuesday that it has entered into a definitive agreement to purchase the containerboard business of Greif, Inc. for $1.8 billion in cash. The transaction is expected to close by the end of PCA’s third quarter, subject to certain customary conditions and regulatory approvals. The Greif containerboard business includes two containerboard mills with approximately 800,000 tons of production capacity and eight sheet feeder and corrugated plants located across the United States. The business generated approximately $1.2 billion in sales and $212 million of earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ended April 30, 2025.

Synergies are estimated to generate pre-tax benefits of approximately $60 million and are expected to be fully realized within two years after closing. The synergies are projected to come from improved operational and production capabilities and efficiencies at the mills, increased integration, mill grade optimization and lower transportation costs. Approximately one half of the benefits are expected by the end of the first year with the remainder being received by the end of the second year. PCA is expected to finance the transaction with $1.5 billion of new debt and cash on hand. PCA’s pro forma leverage ratio (net debt to EBITDA) will be approximately 1.7X after completion of the transaction.

Read more at Business Wire

Amazon Is on the Cusp of Using More Robots Than Humans in Its Warehouses

The e-commerce giant, which has spent years automating tasks previously done by humans in its facilities, has deployed more than one million robots in those workplaces, Amazon said. That is the most it has ever had and near the count of human workers at the facilities. Company warehouses buzz with metallic arms plucking items from shelves and wheeled droids that motor around the floors ferrying the goods for packaging. In other corners, automated systems help sort the items, which other robots assist in packaging for shipment.

One of Amazon’s newer robots, called Vulcan, has a sense of touch that enables it to pick items from numerous shelves. Amazon has taken recent steps to connect its robots to its order-fulfillment processes, so the machines can work in tandem with each other and with humans. Now some 75% of Amazon’s global deliveries are assisted in some way by robotics, the company said. The growing automation has helped Amazon improve productivity, while easing pressure on the company to solve problems such as heavy staff turnover at its fulfillment centers.

Read more at the WSJ

June 2025 US Auto Sales: Moderate Yet Steady

June 2025 US auto sales volume is projected to reach 1.27 million units. Unadjusted volume comparisons would be down compared to June 2024 (26 selling days) and the month-prior (27 selling days in May 2025), absent other impacts. The anticipated June 2025 volume translates to an estimated annual sales pace of 15.6 million units (seasonally adjusted annual rate: SAAR), aligned with the May downshift (15.7M SAAR), as both months declined after the pull-ahead effect evident in the March-April results. “Automakers and consumer alike continue to digest an uneasy and uncertain environment,” said Chris Hopson, principal analyst at S&P Global Mobility.

According to S&P Global Mobility new registration data, estimated share of BEV sales for both May and June is expected around the 7% level as BEV sales growth is moderating and share will be reflective of the stalled conditions for BEV demand. BEV share of sales hit over 8% in January, but fell in February and March, to 7.2% and 7.5%, respectively, before declining to below 7% in April.

Read more at S&P Global

GlobalFoundries to Manufacture Continental Automotive Group’s New Semiconductor

Continental’s automotive group has created a new segment to produce semiconductor circuits and support growing chip demand in vehicles, the auto parts manufacturer announced on June 23. The German company will design and verify semiconductors internally, and outsource manufacturing to New York-based GlobalFoundries as part of the effort, according to a news release. Continental’s automotive group, recently dubbed Aumovio as part of a pending spinoff, said the fabless unit is a strategic step to bolster operations through savings and efficiencies as chip demand takes off.

“The creation of this fabless semiconductor organization will strengthen Continental’s position not only by reducing geopolitical risks but also by the way of becoming more self-reliant in this field,” Philipp von Hirschheydt, a member of Continental’s executive board and CEO of the future Aumovio, said in a statement. As part of the advanced electronics and semiconductor solutions organization, Continental’s automotive group selected GlobalFoundries as its manufacturing partner. The chipmaker has a manufacturing footprint that spans across the United States, Europe and Asia. The company generated first quarter revenue of $1.6 billion, a 2% increase over last year, as tariff and trade disputes began to pressure prices.

Read more at Automotive Dive

US Manufacturing Is In ‘Pretty Bad Shape.’ MIT Hopes To Change That.

U.S. manufacturing is in a rebuilding phase. Following decades of productivity slowdowns fueled by labor declines and globalization, companies are leveraging artificial intelligence and automation to fill in the gaps and attract the next generation of workers. However, the vast majority of manufacturers in the small to medium-sized tier are struggling to evolve, according to academics.

Recently, MIT launched its Initiative for New Manufacturing, an institute-wide effort to reinfuse U.S. industrial production with the latest technologies to bolster economic sectors and ignite job creation. Through a mix of research, hands-on training and collaboration with corporate partners, the Cambridge, Massachusetts, university plans to build the tools and talent to shape a more productive and sustainable future for manufacturing. “We want to work with firms big and small … in cities, and small towns, and everywhere in between … to help them adopt new approaches for increased productivity,” MIT President Sally Kornbluth said during a May 7 speech about the initiative.

Read more at Manufacturing Dive

Ocean Spot Rates Cool In June As Demand Wanes, Experts Say

Ocean spot rates from Asia to North America have mainly cooled from a sharp uptick to start June due to low demand for U.S.-bound cargo, according to Drewry’s World Container Index. During the week of June 25, rates per forty-foot equivalent unit from Asia to the U.S. West Coast fell 7% to $5,593 while rates to the East Coast remain high at $7,183, increasing 1% week over week, per Freightos data.

Slowing demand and increasing capacity are causing a downturn in spot rates, especially to the West Coast, where carriers added the most capacity in response to higher U.S. tariffs, Freightos said in its weekly freight update. The drop in rates “is a sign that the recent surge in imports to the US, which occurred after the temporary halt of higher US tariffs, will fail to have the lasting impact we had initially expected,” per Drewry’s index.

Read more at Supply Chain Dive

Drought and a Parasitic Fly are Driving the Cost of Your July Fourth Burger to a Record High

Years of dry weather and the threat of a parasitic fly have reduced the U.S. beef cattle herd to its lowest since the Truman administration, launching prices to record highs as strong demand persists. Department of Agriculture data show the total head of beef cattle in the U.S. at 86.7 million, the smallest number since 1951. The heartland’s grazing land has been exceptionally dry, leading to nutritional deficits and the growth of potentially toxic, drought-tolerant weeds.

Lethal infections from the New World screwworm are moving north through Mexico–a leading cattle exporter to the U.S. No cases have been reported in the U.S. but cattle imports from Mexico were suspended in May as a precaution. Consumer appetite for beef hasn’t waned since the pandemic. The retail price for ground beef has now risen to $6.67 a pound, according to the American Farm Bureau Federation, the highest since the group’s survey started in 2013.

Read more at the WSJ

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