Member Briefing July 21, 2025
Business Inventories Flat, Sales Dip 0.4% In May
U.S. business inventories were unchanged for a second straight month in May, suggesting that inventories could subtract from gross domestic product in the second quarter. The flat reading in inventories reported by the Commerce Department's Census Bureau on Thursday was in line with economists' expectations. Inventories are a key component of GDP. They increased 1.7% year on year. Inventories are also the most volatile component of GDP
They surged at a $160.5 billion annualized rate in the first quarter as businesses stocked up ahead of President Donald Trump's sweeping tariffs on imported goods, adding 2.59 percentage points to GDP, the most since the fourth quarter of 2021. But that was insufficient to offset a record 4.61-percentage-point drag from a sharp widening in the trade deficit that resulted from the imports deluge. The economy contracted at a 0.5% pace in the January-March quarter. Business sales dropped 0.4% in May after declining 0.2% in April. At May's sales pace, it would take 1.39 months for businesses to clear shelves, up from 1.38 months in April.
Retail Sales See Broad Gains, Beat Expectations
Retailers had a much better-than-expected month in June. Overall sales rose 0.6% which was significantly better than the scant 0.1% pick-up that had been expected by the 65 forecasters contributing to the Bloomberg consensus. While a 1.2% increase in auto sales certainly helped lift the headline, it is not as though that category carried the day. Almost all major store types raked in more sales in June. After auto sales, gains in other major categories included building material & garden stores (+0.9%), bars & restaurants (+0.6%) and e-commerce (+0.4%).
An obvious take-away from today's report is that consumer spending is on better footing than would otherwise be indicated in the context of diminished confidence and a labor market that is slowly losing momentum. Compared to a year-ago, overall retail sales are now up 3.9%, which is higher than the recent run rate. The results show consumers may have been spooked by tariffs, but they haven't fully gone into hiding.
In Charts: Economists’ Forecast Lower Recession Risk, More Growth
Economists this month dialed back their earlier pessimism that U.S. trade policies would lead to slower growth and higher inflation this year—at least for the near term. Their latest forecasts in the quarterly Wall Street Journal survey showed a reduced chance of recession and stronger gross domestic product growth in the second quarter. Economists lowered the likelihood of a recession in the next 12 months to 33%, down from 45% in April—but still higher than the panel’s 22% consensus in the January survey. Historically, a reading of 33% in the WSJ survey is slightly elevated.
“The risks to the outlook remain skewed to the downside,” said Gregory Daco, chief economist at EY-Parthenon. Many economists’ survey comments included notes about longer-term weakness. These charts—based on 69 responses to the survey conducted July 3-8—show how the panel’s consensus shifted from its more-dire outlook in April.
Global Headlines
Middle East
- Iran's Military Leaders Threaten to Resume War – Newsweek
- Israel Issues New Evacuation Orders In Central Gaza As Hunger Worsens - Reuters
- Iran Is Moving to Rearm Its Militia Allies - WSJ
- Israel’s Red Lines In Syria Are Drawing It Deeper Into Conflict - WSJ
- Druze-Bedouin Clashes Flare Up Again After Government Forces Pull Out Of Southern Syria - AP
- Who Are The Druze And Why Is Israel Attacking Syria? - BBC
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Conflicts in the Middle East – Live Universal Awareness Map
Ukraine
- Zelenskyy Appoints Yulia Svyrydenko As New Prime Minister For A War-Weary Ukraine– AP
- Russia Launches Massive Drone Attack On Ukraine Cities - Politico
- Zelenskyy Says Ukraine Offered Russia A New Round Of Peace Talks - Politico
- Patriots To Move To Kyiv 'As Quickly As Possible', Says NATO Top Commander - Reuters
- U.K. Sanctions Russian Spies Linked To Mariupol Strikes - Politico
- Why France And Italy Are Snubbing Trump's NATO Weapon Plan - Newsweek
- U.K. Names Russian Spies And Denounces Moscow’s Sabotage Operations - 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
- Germany’s Merz Admits Europe Has Been A ‘Free-Rider’ On US Defense – Politico
- Ishiba’s Coalition Loses Majority In Japan’s Upper House Election - AP
- Von der Leyen’s Plan To Tax EU Business Looks Doomed From The Start - Politico
- Germany And EU Allies Back Tougher Asylum Measures, Including Deportations To Afghanistan And Syria – France 24
- Brazil’s Former President Bolsonaro Ordered To Wear An Electronic Ankle Monitor - AP
- France’s Budget Bombshell Is A Wake-Up Call For Europe As It Veers Toward Bankruptcy - Politico
- UK To Let 16 And 17-Year-Olds Vote - BBC
- Greeks Mourn, Turks Celebrate Anniversary Of Invasion That Split Cyprus – Reuters
Policy and Politics
House Approves $832 Billion Defense Funding Bill
The House early on Friday approved legislation allocating roughly $832 billion in funding for defense programs for fiscal year 2026, just weeks after Republicans approved a separate $150 billion plan to advance President Trump’s defense priorities. The GOP-led chamber approved the bill 221-209, mostly along party lines. Five Democrats voted in favor of the bill, while three Republicans opposed it.
The bill passed Thursday would boost funding for active, reserve, and National Guard military personnel by $6.6 billion above current levels, to a total of $189 billion. It also allows for an increase of 3.8 percent in basic pay for military personnel that would take effect beginning in January. It calls for $174 billion for procurement, up $6.5 billion from current levels, and would provide $283 billion for operation and maintenance, or a roughly $7 billion decrease below 2025 levels. The bill also includes about $148 billion for research, development, test and evaluation.
Grid Operator NYISO Defends Reliability Report
The New York Independent System Operator wants policymakers to consider upgrading all aging power plants, both renewable and fossil fuel, to help the state achieve its climate goals. This follows criticism from environmental groups accusing NYISO of misrepresenting energy demand and hindering clean energy progress. According to Kevin Lanahan, Vice President of External Affairs and Corporate Communications for NYISO, their Power Trends Report represents “a fact-based assessment of electric system reliability, climate policy advancement, and economic development.” He said, “Power Trends suggests that the repowering of all aging resource types—renewable and fossil—be examined to determine the opportunity for capacity additions, efficiency, and carbon reductions. Doing so may help bridge New York to its climate goals.”
NYISO, the independent nonprofit that manages New York’s electric grid and wholesale electricity market, recently issued warnings about declining operating reserves and shrinking reliability as fossil fuel plants close faster than new power sources open. It inspired Republican lawmakers to target state climate policies and also drew ire from environmental groups like Earthjustice and the Environmental Defense Fund. New York could face a capacity shortfall, with NYISO warning the state needs to add about 20,000 megawatts of new power by 2030 to meet rising demand. That forecast contrasts with environmentalists’ claims that some 50,000 megawatts of clean energy are stalled in the queue, delayed by up to an alleged seven years.
DiNapoli: New York State Tax Collections $3.3B Higher In Q1 2025 Compared to Q1 2024
New York state collections were about $3.3 billion higher in the first quarter of 2025 than they were during the same period in 2024, state Comptroller Tom DiNapoli announced in a new report Wednesday. The comptroller said state tax receipts also totaled $33.2 billion, about $581 million higher than the most recent Division of the Budget estimates. “Higher tax collections for the state primarily reflect strong personal income tax collections on 2024 income,” DiNapoli said in a statement. “Slowing employment and economic growth may present a challenge in the coming months, along with the potential impact of tariffs and federal policy changes that have yet to be fully realized.”
Personal income tax receipts totaled $19.2 billion and were $66.3 million above projections through the first quarter. However, receipts were nearly $3 billion higher than the same period last year, the comptroller said, reflecting, in part, the 24.9% increase in collections from the settlement of the 2024 tax year. DiNapoli said the state’s general fund ended June with a balance of $53.6 billion, $2.7 billion higher than projected and $4 billion higher than last year, primarily due to higher-than-anticipated tax collections and lower-than-anticipated spending.
Read more at The Comptroller’s website
Political Headlines
- President Trump Signs GENIUS Act, Creating Stablecoin Regulatory Framework: CNBC Crypto World – CNBC
- From Green Icon To Housing Villain: The Fall Of California’s Landmark Environmental Law - Politico
- White House Likely To Send Another Rescissions Package To Congress – The Hill
- Trump Sues Murdoch For $10 Billion Over WSJ Story On Epstein Birthday Letter - WSJ
- Here’s Where Democrats Stand In Polls At Trump’s Six-Month Mark – The Hill
- Judge Says Trump’s Firing Of FTC Commissioner Was Illegal - Politico
- Justices' 'Tea Leaves' Don't OK Illegal FTC Firing, Court Says – Law360
- Travelers To The U.S. Must Pay A New $250 ‘Visa Integrity Fee’ — What To Know - CNBC
- How Will PBS/NPR Cuts Impact Your Local Stations? – The Hill
- Gov. Hochul: NYC To Lose Hundreds Of Jobs After CBS Cancels 'The Late Show' - Gothamist
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
GLP-1 Drugs Cut Death Risk 30% For People With Obesity And Type 2 Diabetes: JAMA Study
For people who are obese and have type 2 diabetes, using Ozempic and other GLP-1 agonist drugs cuts the all-cause mortality rate by 30%, according to a new paper published by a journal affiliated with the Journal of the American Medical Association. Use of GLP-1 agonists also cut the risk that the patients would suffer from strokes by 19% and the risk that the patients would suffer from dementia by 37%. Dr. Huan-Tang Lin, a researcher at Chang Gung University in Taiwan, and three colleagues based the findings in the paper on an analysis of the records in the TriNetX US database for 60,860 patients who were ages 40 or older, had obesity and diabetes, and took GLP-1 agonists between 2017 and 2024.
The researchers looked at patients who were taking drugs containing ingredients such as semaglutide, the GLP-1 agonist in Ozempic and Wegovy, and tirzepatide, the GLP-1 agonist and GIP agonist in Mounjaro and Zepbound. The effects were stronger for moderately obese people — with a body mass index of 30 to 40 — than for people facing more severe obesity, the researchers said.
Industry News
Trade Wars
- Few Signs of Foreign Exporters Absorbing U.S. Tariff Hikes – Wells Fargo
- Japan Election Throws a Wrench in Trade Talks - WSJ
- Canada Moves to Block Chinese Steel Now Shut Out of the U.S. - NYT
- Canada's Steel Import Duties Violate WTO Rules, Says China - Reuters
- Chinese Rare-Earth Magnet Exports Surge After U.S. Trade Truce - WSJ
- How The EU Is Preparing To Reach A Tariff Deal In Trump’s Game Of Chicken - CNBC
- Few Cards Left to Play: Japan’s Weak Hand in Tariff Negotiations – Nippon.com
- China Threatens to Block Panama Ports Deal Unless Its Shipping Giant Is Part of It - WSJ
- Months Of Trump’s Tariffs Are Shifting Supply Chains And Diplomatic Ties – Washington Post
- All FDA-Regulated De Minimis Imports Now Face Agency Review For Entry – Supply Chain Dive
- Is America Breaking the Global Economy? – Foreign Affairs
Philly Fed Index Surges To Five-Month High In July
The Federal Reserve Bank of Philadelphia released a report on Thursday showing manufacturing activity in the region unexpectedly expanded overall in the month of July. The Philly Fed said its diffusion index for current general activity surged to a positive 15.9 in July from a negative 4.0 in June, with a positive reading indicating growth. Economists had expected the index to rise to a negative 1.0.
The spike by the headline index came amid sharp increases by the new orders and shipments indexes, which also reached their highest readings since February. The new orders index soared to 18.4 in July from 2.3 in June, while the shipments index shot up to 23.7 in July from 8.3 in June. The number of employees index also surged to a positive 10.3 in July from a negative 9.8 in June, indicating a return to job growth. The report also said the prices index jumped to 58.8 in July from 41.4 in June, while the prices received index climbed to 34.8 in July from 29.5 in June.
US Judge Sets August Hearing On Bid To End Boeing Criminal Prosecution
A U.S. judge on Friday said he will hold an August 28 hearing on a request by the Justice Department and Boeing to approve an agreement that allows the planemaker to avoid prosecution on a charge stemming from two fatal 737 MAX plane crashes that killed 346 people. The deal, which faces objections from relatives of some of those killed in the crashes in 2018 and 2019, enables Boeing to escape oversight from an independent monitor for three years. Boeing last year agreed to plead guilty under a deal with prosecutors to a criminal fraud charge that it misled U.S. regulators about a crucial flight control system on the 737 MAX, its best-selling jet.
Some family members argue dismissal is not in the public interest and obligations imposed on Boeing are not enforceable and have cited O'Connor's statement in 2023 that "Boeing's crime may properly be considered the deadliest corporate crime in U.S. history." Boeing argued the executive branch solely has the power to decide whether to bring or maintain a prosecution, asking O'Connor to reject objections filed by the families and grant the government's motion to dismiss the criminal fraud conspiracy charge.
Uber, Lucid and Nuro Team Up on Robotaxis
Lucid Group, Nuro Inc. and Uber Technologies are forming a partnership to develop an autonomous driving platform, the companies announced Thursday. Lucid, a luxury EV maker, will supply its recently launched Gravity SUVs for the program, which will be operated by ridesharing service Uber and run using Nuro’s Driver Level 4 autonomy system.Uber aims to deploy 20,000 or more Lucid EVs equipped with the technology over the next six years. Uber or its third-party fleet partners will own the vehicles, which will be exclusively available to riders on Uber’s platform.
According to Nuro, the first Lucid robotaxi laden with the software is already operating autonomously on Nuro’s closed circuit proving grounds in Nevada. The vehicles will receive the necessary hardware while on Lucid’s assembly line and subsequently Nuro’s software when the vehicle is commissioned by Uber.The news comes just as robotaxis are having a moment: Waymo has long led the autonomous ridesharing game, and Uber has even partnered with the Google/Alphabet subsidiary in the past. Tesla also recently launched driverless car testing in Austin, Texas, as it works to enter the market.
Chip Design Software Firm Synopsys Completes $35B Deal For Ansys
Chip design software maker Synopsys on Thursday said it has completed its acquisition of Ansys following final regulatory approvals from China this week. The transaction, valued at $35 billion, builds on a seven-year partnership between the U.S.-based companies as they look to leverage their strengths to become a leader in silicon-to-systems design, according to a January 2024 investor presentation. Pennsylvania-based Ansys is a developer of engineering simulation and analysis software. The acquisition will incorporate Ansys’ simulation and analysis technology to better address manufacturing innovation as products become more intelligent.
The deal has been 18 months in the making as Synopsys and Ansys looked to gain key approvals from countries overseas. Synopsys said the combination will meet demand for advanced software that fuses electronics and physics, augmented with artificial intelligence. As products become more intelligent at a rapid pace, engineering teams are faced with a range of design complexities and cost pressures. Synopsys said it hopes to address these challenges with its latest acquisition.
Read more at Manufacturing Dive
Chevron Closes Megadeal for Hess After Winning Exxon Arbitration
An arbitration panel cleared the way for Chevron to complete its $53 billion purchase of Hess, dismissing Exxon Mobil’s claim that it had a contractual right to bid for Hess’s crown-jewel assets in Guyana. The ruling handed down Friday from the International Chamber of Commerce in Paris resolves an often tense and long-running dispute between the two largest descendants of John D. Rockefeller’s Standard Oil monopoly over one of the world’s most coveted oil projects. Chevron originally struck the deal for Hess in October 2023.
Just hours after Friday’s decision was announced, Chevron said it had closed its deal for Hess, and that it plans to nominate John Hess, the smaller company’s longtime chief executive, to its board. The Federal Trade Commission had set aside orders Thursday that had previously barred Hess from serving on Chevron’s board. Exxon said that it disagreed with the ICC panel’s interpretation but respects the arbitration process. The company added that it had a duty to its investors to consider its pre-emption rights. The company on Friday welcomed Chevron to the consortium in a statement.
Trump Picks Two For NLRB, Setting Up Return Of Quorum
Although the National Labor Relations Board (NLRB) has operated for most of this year without a quorum and thus unable to issue decisions, that could soon change. President Trump nominated Scott Mayer (chief labor counsel at Boeing Co.) and James Murphy (former NLRB attorney) to fill two vacant Republican seats on the NLRB, potentially restoring the Board’s ability to issue decisions.
Mayer’s work experience demonstrates a strong management background, having worked at InterContinental Hotels Group, MGM Resorts International, Aramark, and several law firms prior to his current role at Boeing. Meanwhile, Murphy was selected by Kaplan to serve as his chief counsel in 2017 and has spent his career at the Board, having served as staff counsel or supervisor on the staffs of dozens of Board members.
Read more at Labor Relations Update
UPS Starts Driver Buyout Offers
UPS is offering voluntary buyouts to its full-time U.S. drivers amounting to $1,800 per year of service, with a minimum payout of $10,000, according to an announcement from the carrier Friday. The undertaking, called the Driver Voluntary Separation Program, is the first in UPS’ history for delivery drivers. The financial incentive available through the program is in addition to earned retirement benefits like pension and healthcare, per UPS.
Interested drivers must apply for the program between July 18 and July 31, according to a UPS employee communication viewed by Supply Chain Dive. Applicants will be considered for separation dates between Aug. 31 and Oct. 31 “based on the local needs of the business… If the maximum number of applications is exceeded, approvals will be granted in seniority order,” the communication said. “Additional applications may be considered for separation dates between Feb. 1, 2026, and March 31, 2026.”
Read more at Supply Chain Dive
PSC Cancels New York Power Line Project For Offshore Wind Energy
New York’s Public Service Commission decided on Thursday to stop the project that would bring offshore wind power to New York City. They said that their decision would protect New Yorkers from paying for expensive power lines that might not be needed soon. This means that the PSC is cancelling its Public Policy Transmission Need determination. Made in 2023, the PPTN determination called for new power lines to deliver at least 4,770 megawatts of offshore wind energy to New York City by 2033.
President Donald Trump issued an executive order in January to stop construction on or any new permits for offshore wind. It also ordered a review of existing wind energy leases. The PSC decided that Trump’s order makes it impossible to reach New York’s offshore wind goals in the near future and eliminates any reason for building new power lines in the first place. Chris Casey, Utility Regulatory Director for New York at the Natural Resources Defense Council, called the decision deeply disappointing and a missed opportunity. NRDC wants the state to finish the NYISO review, pick the best project, and seek approvals to move forward quickly once federal barriers inevitably fall.
Astronomer CEO Andy Byron Resigns After Viral Coldplay ‘Kiss Cam’ Controversy
Astronomer announced on Saturday that CEO Andy Byron has resigned days after being caught on video in an intimate moment with the company’s head of human resources at a Coldplay concert. Byron was shown on a big screen at the concert in Boston on Wednesday with his arms around Chief People Officer Kristin Cabot. Byron, who is married with children, immediately hid when the couple was shown on screen. Lead singer Chris Martin said, “Either they’re having an affair or they’re just very shy.” A concert attendee’s video of the affair went viral.
In May, Astronomer announced a $93 million investment round led by Bain Ventures and other investors, including Salesforce Ventures. “Before this week, we were known as a pioneer in the DataOps space, helping data teams power everything from modern analytics to production AI,” the company said in a Saturday statement. “Our leaders are expected to set the standard in both conduct and accountability, and recently, that standard was not met.”