Member Briefing July 31, 2025
U.S. Economy Grew At A 3% Rate In Q2
The U.S. economy grew at a much stronger-than-expected pace in the second quarter, powered by a turnaround in the trade balance and renewed consumer strength, the Commerce Department reported Wednesday. Gross domestic product, a sum of goods and services activity across the sprawling U.S. economy, jumped 3% for the April through June period, according to figures adjusted for seasonality and inflation. That topped the Dow Jones estimate for 2.3% and helped reverse a decline of 0.5% for the first quarter that came largely due to a huge drop in imports, which subtract from the total, as well as a weak consumer spending amid tariff concerns.
- Consumer spending rose 1.4% in the second quarter, better than the 0.5% in the prior period.
- While exports declined 1.8% during the period, imports fell 30.3%, reversing a 37.9% surge in Q1. The GDP tally showed strength across key areas of the economy, as well as evidence that inflation is ebbing though not eradicated.
- Final sales to private domestic purchases, which track demand from businesses and consumers but not the more volatile government, inventory and international trade data, rose at a 1.2% rate in the second quarter. That was slower than 1.9% the prior quarter, and suggested underlying demand from businesses and consumers weakened.
- Growth in business investment eased, dragged down by weaker investment in buildings and equipment. The housing sector, hard-hit by high borrowing costs, remained a drag on the economy.
- Inventories—specifically, the pace of businesses restocking their shelves—subtracted more than 3 percentage points from the headline growth number.
Fed Leaves Rates Unchanged With Two Governors Dissenting
The Federal Reserve held interest rates steady on Wednesday in a split decision that gave little indication of when borrowing costs might be lowered and drew dissents from two of the U.S. central bank's governors, both appointees of President Donald Trump who agree with him that monetary policy is too tight. "The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated," the central bank said in a policy statement released after the Federal Open Market Committee voted 9-2 to keep its benchmark overnight interest rate steady in the 4.25%-4.50% range for the fifth consecutive meeting.
The policy statement did note that economic growth "moderated in the first half of the year," possibly bolstering the case to lower rates at a future meeting should that trend continue. But it also said that "uncertainty about the economic outlook remains elevated" with risks to both the Fed's inflation and employment goals, language that has anchored the central bank's reluctance to cut rates until the path of inflation and jobs becomes clearer. This week's meeting marks the first time in more than 30 years that two members of the Fed's seven-person Washington-based Board of Governors voted against a rate decision at the consensus-driven central bank.
Trump 50% Tariff On Copper Imports Exclude Refined Metal White House Says
President Donald Trump on Wednesday signed on order imposing a universal 50% tariff on copper imports, the latest metal he has targeted with a steep import tax. The new, higher copper tariffs go into effect Friday, according to a fact sheet released by the White House. The Trump administration says that the new duties, which follow 50% U.S. tariffs already imposed on steel and aluminum, are aimed at boosting domestic industries and addressing “trade imbalances.”
But experts warn that they could raise prices on all sorts of products that utilize the versatile metals, ranging from construction materials to electronics. Copper is the third-most-consumed metal, behind iron and aluminum. The U.S. imports nearly half of the copper it uses, most of which comes from Chile, according to data from the U.S. Geological Survey.
Global Headlines
Middle East
- Why Israel and Hamas Won’t Stop Fighting – WSJ
- Dozens Killed By Israeli Fire In Gaza, Officials Say, As US Envoy Heads Back To The Region - AP
- Von der Leyen’s Deputy Pushes President For More EU Action On Israel And Gaza - Politico
- Israel Official Says 'No Deliberate Starvation in Gaza' Amid Backlash - Newsweek
- Israeli Minister Hints At Annexing Parts Of Gaza - Reuters
- US Hits Iranian Shipping Network With Major New Sanctions
- Israel And Hostages' Families Condemn UK Plan To Recognise Palestinian State - BBC
- Free Speech Sees Rare Win in Iran - Newsweek
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Conflicts in the Middle East – Live Universal Awareness Map
Ukraine
- Ukrainian Air Force Major Arrested On Suspicion Of Helping Russian Missiles Target Air Bases – Yahoo
- Russian Missiles Hit A Ukrainian Army Training Ground, Killing At Least 3 Soldiers - AP
- Trump Says Russia Faces Tariffs In 10 Days If No Progress On Ending Ukraine War - Reuters
- Russia Kills 27 Civilians In Ukraine As The Kremlin Remains Defiant Over Trump Threats - AP
- Russian Strikes Kill 25 In Ukraine, As Trump Confirms Deadline For Talks - BBC
- Trump Says 10-Day Deadline For Russia To Broker Ceasefire In Ukraine Starts Tuesday - Politico
- 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
- Huge Quake Rocks Russia's Far East, Triggering Tsunami Warnings Around Pacific - Reuters
- Tsunami Warnings Downgraded As Threat To North America Recedes - BBC
- Klyuchevskoy Volcano In Russia's Far East Starts Erupting After Earthquake - Newsweek
- Thailand And Cambodia Reaffirm Ceasefire After China-Brokered Meeting In Shanghai - AP
- Who Should Coordinate Europe’s Defense Buildup? – Defense One
- Moldova’s President Warns Of ‘Unprecedented’ Russian Election Meddling - Politico
- Bessent Warns China On Russian Oil Purchases That Could Bring 100% Tariffs - Yahoo
- Bank of Canada Holds Rates Steady While Signaling Easing Bias – Wells Fargo
Policy and Politics
Government Shutdown Talk Is Starting Early Ahead Of A Difficult Funding Fight In Congress This Fall
It’s become tradition. Congressional leaders from both major political parties blame each other for a potential government shutdown as the budget year draws to a close. But this year, the posturing is starting extraordinarily early. The finger-pointing with more than two months to go in the fiscal year indicates the threat of a stoppage is more serious than usual as a Republican-controlled Congress seeks to make good on its policy priorities, often with no support from the other political party. Democratic leadership from both chambers and the two panels responsible for drafting spending bills met behind closed doors recently to discuss the strategy ahead.
The leaders emerged demanding that Republicans work with them but were careful to avoid spelling out red lines if Republicans don’t. “We are for a bipartisan, bicameral bill. That’s what always has been done,” said Senate Democratic leader Chuck Schumer. “The onus is on the Republicans to help us make that happen.” On the Republican side, lawmakers describe the Democrats as itching for a shutdown. Senate Majority Leader John Thune said Schumer had threatened a shutdown should Republicans pass a bill to roll back $9 billion in public broadcasting and foreign aid funds. Republicans subsequently passed those cuts. “It was disturbing to see the Democratic leader implicitly threatening to shut down the government in his July ‘Dear Colleague’ letter, but I’m hopeful that he does not represent the views of Senate Democrats as a whole,” Thune said.
Lawmakers Propose Redistricting Amendment In New York
You’d be forgiven if you thought the redistricting issue was behind us until the new decade. However, politicians on both sides of the aisle are now pushing for a mid-decade change to try and earn an advantage in the House of Representatives which has a razor thin majority for the GOP. Here in New York, Deputy Senate Majority Leader Mike Gianaris and Asm. Micah Lasher are proposing a constitutional amendment to allow New York to change it’s district lines mid-decade. The redistricting process in states typically occurs at the start of each new decade, when new census data is available.
The bill in New York, which is technically a legislatively referred constitutional amendment, would allow the Legislature to redraw congressional districts if another state engaged in mid-decade redistricting. It would have to pass the Legislature in two consecutive sessions — and then still be approved by voters in a ballot measure. In theory, that means that whatever new maps that would be created wouldn’t be in place until the 2028 elections.
White House Launching New Health Data Sharing Initiative to ‘Kill the Clipboard’
The Trump administration on Wednesday said it has secured commitments from more than 60 health and information technology companies to participate in a plan to make Medicare patient data more accessible. Leaders from tech companies including Google, Amazon and OpenAI, along with providers and health systems including Cleveland Clinic and UnitedHealth Group, met with health officials at the White House Wednesday to “begin laying the foundation for a next-generation digital health ecosystem,” the Centers for Medicare and Medicaid Services said in a statement.
The idea is for a patient to upload data in the health app of their choice, where it can be easily managed and shared with their doctor. According to CMS, the initiative will focus on diabetes and obesity management, the use of conversational AI assistants to help patients, and digital tools like QR codes to “kill the clipboard” and replace paper intake forms at check-in.
Political Headlines
- NFL Temporarily Closes New York Office After Shooting Targeted League – Forbes
- Trump Tax Megalaw Upends Charitable Giving - WSJ
- Texas Redistricting Plan Could Give Republicans 5 Seats—But Democrats Are Fighting Back - Forbes
- US Sanctions Brazilian Justice Overseeing Bolsonaro Case – The Hill
- Congressional Stock Trading Ban Gets Senate Panel’s OK - Politico
- Virginia Politician Doused in Gasoline then Set on Fire - Newsweek
- Trump Administration Freezes More Than $100M In Federal Funding For Duke – The Hill
- AG James Asks Court To Uphold Rochester’s Sanctuary City Law – NY State Of Politics
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
AMA Urges RFK Jr. To Not Terminate Preventive Services Task Force
The American Medical Association is urging the U.S. Department of Health and Human Services not to fire members of an advisory panel that determines what cancer screenings and other preventive health measures insurers must cover. Task force members meet throughout the year to review evidence and weigh in on various preventive health topics, including if and when people should get screened for certain cancers. The Wall Street Journal reported earlier that Kenney planned to fire all 16 panel members. The AMA expressed “deep concern” about the pending action.
The U.S. Supreme Court in late June upheld the preventive care coverage mandate in the Affordable Care Act. The 6-3 ruling asserted that the task force can continue issuing recommendations for services that must be covered by health insurers without cost-sharing. “The U.S. Preventive Services Task Force plays a critical, nonpartisan role in guiding physicians’ efforts to prevent disease and improve the health of patients by helping to ensure access to evidence-based clinical preventive services,” AMA President John Whyte, M.D., wrote in a Sunday letter to Secretary Robert Kennedy Jr. “As such, we urge you to retain the previously appointed members of the USPSTF and commit to the longstanding process of regular meetings to ensure their important work can continue without interruption.
Industry News
Trade Wars
- Trade Agreements Have Been Reached With South Korea, Thailand And Cambodia, But Trump Casts Doubt On Canada Pact - WSJ
- Trump Ends De Minimis Exemption For Global Low-Cost Goods - CNBC
- America's Toymakers are in Trouble – Newsweek
- Trump Says Friday Tariff Deadline ‘Will Not Be Extended’ - CNBC
- Trump's Brazil Trade Squeeze Gives Tariff Challengers Fresh Legal Ammunition - Reuters
- Trump Announces 25% Tariff On India Plus ‘Penalty’ For Trade With Russia - CNBC
- Macron: EU Wasn’t ‘Feared Enough’ By Trump To Get Good Trade Deal - Politico
- Brexiteers Gloat Over Trump’s EU Trade ‘Disaster.’ Has Britain Finally Won? - Politico
- Bessent Says ‘Not To Panic’ Over Tariff Rate Surges On Aug. 1 - CNBC
- Trump's Tariffs Give Chocolate Makers In Canada, Mexico An Edge Over US Firms - Reuters
- Von der Leyen Played Hardball With China. Then She Won A Trade Deal With Trump - Politico
- Turmp’s Trade Deals, A Summary to Date – IndustryWeek
Stanley Black & Decker to raise prices again, navigate $800M tariff impact
Stanley Black & Decker plans to raise its prices again this year as tariff costs continue to weigh on the world’s largest toolmaker. The company initially expected a tariff impact as high as $1.7 billion, but that has since eased as it made operational adjustments and trade negotiations developed. After hiking prices by high single-digits in April across U.S. retailers, the company is in early talks to implement a “more modest” round of increases starting in the fourth quarter, COO Christopher Nelson said during a July 29 earnings call.
Stanley Black & Decker is also continuing to adjust its supply chain configurations to mitigate tariffs and making progress with its multi-year, cost reduction program, which is on track to reach $2 billion in total savings by the end of 2025. The program generated $150 million in cost savings in Q2.
Read more at Manufacturing Dive
JD Power Projects New Vehicle Spending Will Hit Monthly Record In July
In what’s expected to be a record month for consumer vehicle spending, total new vehicle sales in July are projected to rise 3.2% over July 2024, according to a July 23 sales forecast from J.D. Power and data analytics firm GlobalData. Retail sales alone are set to post an even stronger gain. New vehicle purchases made directly by consumers in July are forecast to increase 4.1% over July 2024 — or 8.2% if not adjusting for the difference in number of selling days. Projections are based on sales data from the first 16 days of the month.
In addition to rising sales volumes, vehicle transaction prices have also increased, J.D. Power reported. The average new vehicle retail purchase price is forecast to reach $45,063 in July, an increase of $938 or 2% compared to July 2024. While total consumer spending on new vehicles is expected to hit $49.8 billion this month, a record for July. Looking ahead, analysts caution that future sales data will likely be influenced by U.S. tariffs on imported vehicles and parts, as manufacturers anticipate slower sales and reduce their imports. Thomas King, president of the data and analytics division at J.D. Power said tariffs are increasing new vehicle prices by an average $4,275, though impacts on individual models “vary widely,” he said.
Mercedes Temporarily Halts EV Orders In U.S.
Mercedes-Benz will stop bringing its current generation of electric vehicles that fit neatly under the automaker’s EQ brand to dealerships starting this September. While Mercedes will stop bringing all-electric EQ models to dealerships in the U.S., the German luxury brand will continue to produce EQ vehicles in the U.S. to export to global markets. The automaker’s decision coincides with the expiration date of the federal EV tax credit in the U.S. on September 30, 2025.
Mercedes will basically stop selling its EQ line of EVs in the U.S., but its Tuscaloosa, Alabama facility, which is where the EQS SUV and EQE SUV are built, will continue to pump out vehicles. Mercedes-Benz’s facility can switch to making gas, hybrid, and all-electric vehicles, allowing the automaker to adapt to future demand or changes in its lineup. “The Mercedes-Benz flexible production system can build electric, hybrid and combustion-engine cars on its assembly lines and we are therefore able to adapt our operations to shifts in market demand,” the spokesperson told the outlet. “We continue to assemble all of our models for global markets.”
Can Novo Nordisk’s New CEO Stop Rivals From Taking Over the Anti-Obesity Market?
In April, Danish drugmaker Novo Nordisk formed what was supposed to be a long-term collaboration to promote its weight-loss drug Wegovy on the popular telehealth service Hims & Hers. The deal was Novo Nordisk’s bid to grab back market share from the cheaper, knockoff versions that Hims & Hers and other telehealth companies were selling. But within weeks, Novo Nordisk’s partnership crumbled amid a messy war of words. Novo Nordisk accused Hims & Hers of continuing to deceptively sell large volumes of copycat versions of Wegovy. Hims & Hers blasted Novo Nordisk, saying Novo Nordisk improperly pressured it to steer patients to brand-name Wegovy. Hims & Hers is still selling compounded Wegovy, which the U.S. Food and Drug Administration had allowed while the drug was in shortage, even though that shortage is now over.
Novo Nordisk has consistently misread the U.S. market and the threat of compounders, which make alternative versions of anti-obesity drugs. This culminated in the implosion of the high-profile deal with Hims & Hers in June—and Novo Nordisk’s warning Tuesday that its full-year sales and earnings would be lower than expected, which sent its stock price plunging. In early trading Wednesday, Novo Nordisk shares fell about 6%. Now, some industry observers doubt whether incoming Chief Executive Maziar Mike Doustdar, the company’s first non-Danish leader but nevertheless a longtime company insider, can fix that. He has experience leading international operations, but not in the U.S., where Novo Nordisk’s biggest competitive threats lie, including rival Eli Lilly, which has a more effective drug in Zepbound.
Private Company Hiring Bounced Back With A 104,000 Increase In July, ADP Says
Hiring at private companies rebounded at a stronger than expected pace in July, indicating the labor market is holding its ground, ADP reported Wednesday. Payrolls rose by a seasonally adjusted 104,000 for the month, reversing a loss of 23,000 in June and topping the Dow Jones forecast from economists for an increase of 64,000. The June number was revised up from an initially reported loss of 33,000.
Though the pace of hiring is well off where it stood last year, the June total was the best since March and consistent with a slowing but still fairly vibrant jobs picture. “Our hiring and pay data are broadly indicative of a healthy economy,” ADP chief economist Nela Richardson said. “Employers have grown more optimistic that consumers, the backbone of the economy, will remain resilient.”
Mars To Invest $2B In US Manufacturing Through 2026
Food giant Mars plans to invest $2 billion by the end of 2026 to expand its U.S. manufacturing capabilities and boost product innovation. The M&M’s, Snickers and Ben’s Original maker said the investment will boost production in America, where 94% of Mars’ products sold are manufactured locally. Mars previously spent $6 billion during the past five years to expand its manufacturing footprint.
While Virginia-based Mars is best known for its candy and sweets business, it also has a large presence in pet food and snack bars, including Nature’s Bakery, which it acquired in 2020. It’s also in the process of buying snacking giant Kellanova for nearly $36 billion, a deal which would add Cheez-It, Pringles, Eggo and Pop-Tarts to its already sprawling portfolio. Mars’ decision to invest billions in its U.S. production and innovation should help it meet demand and provide the capabilities to add new products as well as innovate existing ones.
Read more a Manufacturing Dive
CMMC Cost An Obstacle To Compliance, Survey Shows
The finalization of the Cybersecurity Maturity Model Certification (CMMC) rule marks a shift in how Defense Industrial Base (DIB) contractors engage with the Defense Department. Yet a recent survey paints a concerning picture: More than 16% of respondents reported little to no readiness for CMMC compliance, half admitted to being only moderately or slightly prepared, and 13% said they’d taken no action at all.
There are multiple reasons for this state of unpreparedness, but the biggest issue revolves around the cost of compliance, timeline confusion for certification, and the definition and scope of controlled unclassified information (CUI).
Read more at Federal News Network
Louis Vuitton Plans To Open A New Manufacturing Factory In Texas
Bernard Arnault, CEO of LVMH, has revealed his plans to open a second Louis Vuitton manufacturing plant in North Texas. The company has already set up shop in Alvarado, and according to the Dallas Morning News, wants to open a new factory just north of Dallas by early 2027. The news comes on the heels of Arnault pressing European leaders to work out a trade deal with President Trump similar to the deal reached with Japan. Asked how LVMH would view a potential tariff rate of 15% for exports to the United States, Cabanis said that would be an "overall good outcome for the general mood of our clients".
With the exception of wines and spirits, the company still has room to draw on the pricing power of its brands - like Bulgari jewellery and fashion houses Dior and Celine. LVMH's sales for the second quarter to the end of June were down 4% to 19.5 billion euros ($22.95 billion), falling short of a consensus forecast for a 3% decline. Sales at the group's fashion and leather division, accounting for the bulk of profits, were down 9%, below expectations for a 6% drop.
Scientists Use Quantum Machine Learning To Create Semiconductors For The First Time
Scientists in Australia have developed a quantum machine learning technique — a blend of artificial intelligence (AI) and quantum computing principles — that could change how microchips are made. They outlined their findings in a new study published June 23 in the journal Advanced Science. In it, the researchers demonstrated for the first time how quantum machine learning algorithms can significantly improve the challenging process of modeling the electrical resistance inside a chip — a key factor that affects how efficiently it performs.
Semiconductor fabrication is a complex, multistep process that requires painstaking precision — and each step must be performed with extreme accuracy. Even the smallest misalignment can cause a chip to fail. That's where quantum computing principles come into play. In the study, the researchers focused on modeling Ohmic contact resistance — a particularly difficult challenge in chipmaking. This is a measure of how easily electricity flows between the metal and semiconductor layers of a chip; the lower this is, the faster and more energy-efficient performance can be.