Member Briefing June 18, 2025
U.S. Industrial Production Unexpectedly Dips 0.2% In May But Manufacturing Component Inches Higher
Industrial production in the U.S. unexpectedly saw a modest decrease in the month of May, according to a report released by the Federal Reserve on Tuesday. The Fed said industrial production dipped by 0.2 percent in May following a revised 0.1 percent uptick in April. Economists had expected industrial production to inch up by 0.1 percent compared to the unchanged reading originally reported for the previous month. The unexpected decrease by industrial production came amid a sharp pullback by utilities output, which tumbled by 2.9 percent in May after surging by 4.9 percent in April.
The Fed said manufacturing output crept up 0.1 percent in May, driven by a 4.9 percent spike in the production of motor vehicles and parts. Manufacturing output excluding motor vehicles and parts fell by 0.3 percent. The report said mining output also inched up by 0.1 percent in May following a 0.3 percent decline in the previous month. The Fed also said capacity utilization in the industrial sector fell to 77.4 percent in May from 77.7 percent in April. Economists had expected capacity utilization to remain unchanged.
Retail Sales Slide In May On Lower Gas, Auto Sales Amid Tariff Uncertainty
Retail sales fell in May, dragged down by declines in gas and auto purchases during the second month that a wide array of President Trump's tariffs were in effect. Headline retail sales declined 0.9% in May, surpassing economists' expectations for a 0.6% decline month on month. By comparison, sales decreased 0.1% in April, according to revised Census Bureau data. A 2% decline in gasoline sales, a 3.5% slide in auto purchases, and a 2.7% decline in building materials drove the May headline number lower.
There was some positive news in the release: The control group in Thursday's release, which excludes several volatile categories and factors into the gross domestic product (GDP) reading for the quarter, rose 0.4%. That compares with a 0.1% decrease seen in April. Economists expected a 0.3% increase. The largest increase in May was seen in miscellaneous store retailers, where sales rose 2.9%.
NY Fed Survey: Service Sector Activity Slides Again in June
Business activity in the region’s service sector continued to decline in June, 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 three points but held below zero at -13.2. The headline business activity index remained negative at -13.2.
- The business climate index remained well below zero at -48.3, with fifty-six percent of respondents saying that the business climate was worse than normal.
- The employment index moved down two points to -2.5, pointing to a small decline in employment levels.
- The wages index sank nine points to 19.4, its lowest level in more than four years, indicating that wage growth slowed. The prices paid index jumped eight points to 66.5, its highest level in more than two years, a sign that input price increases picked up.
- The prices received index was little changed at 21.0. The supply availability index was similar to last month at -17.2, suggesting that supply availability continued to worsen.
- The index for future business activity climbed nineteen points, but remained negative at -9.3, suggesting firms expect activity to decline in the months ahead.
- The index for the future business climate remained negative at -28.3, indicating the business climate is expected to continue to be worse than normal.
- Capital spending plans remained negative.
Global Headlines
Middle East
- Europe Backs Israel Against Iran Despite Anger Over Gaza – WSJ
- G7 Leaders: ‘Iran Can Never Have A Nuclear Weapon’ - Politico
- U.S. Strike on Iran Among Options Being Considered by Trump - WSJ
- Israeli Strikes Damage Iran’s Underground Nuclear Site, Agency Says As Trump Warns Tehran - AP
- Trump Says He Wants ‘Real End’ To Iran-Israel Conflict After Leaving G7 Early - Forbes
- Hegseth Orders ‘Additional Capabilities’ To Middle East – The Hill
- How Israel Used Spies, Smuggled Drones And AI To Stun And Hobble Iran - AP
- Israel Video Shows Moment Iran's 'Nuclear Headquarters' Struck - Newsweek
- How Israel's Air Force Compares as IDF Claims 'Air Superiority' Over Iran - Newsweek
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- More Than A Dozen Killed In Russian Strike On Ukraine– ABC
- Ukraine's Zelenskiy To Seek G7 Support As Trump's Early Exit Puts Dampener On Summit - Reuters
- Overnight Russian Attack On Ukraine Kills 15 And Injures 156 - AP
- Russia Accuses UK of Sabotage Plans With US In 'NATO Lake' - Newsweek
- Russia's Deadliest Attack On Kyiv For Months Flattens Part Of Apartment Block - BBC
- Macron Says He’s Still Confident US Will Back Further Russia Sanctions - Politico
- Ukraine Arms Supplies Can Stretch Into 2026, Czech Minister Says - Bloomberg
- EU Plans To Squeeze Out Russian Gas With Tough New Rules - 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
- Explainer: US Bunker-Buster Bombs And Iran's Underground Nuclear Facilities – France 24
- Colombian Senator In 'Extremely Critical Condition' After Being Shot - BBC
- EU Lays Out Plan to Bolster Defense Industry - WSJ
- Full-Scale Power Failure That Shut Down Iberian Peninsula Had No Single Cause But Was Not Cyber-Attack, Spain Says - Guardian
- Corruption Scandals Put Spain’s Sánchez Under Pressure to Call Snap Elections - Politico
- What The Capsizing And Relaunching Of A Warship Tells Us About North Korea's Regime - BBC
- France’s Evian To Host G7 In 2026 - Politico
- Mali Junta Takes Control Of Canadian-Owned Barrick Gold Mine Amid Tax Dispute - AP
Policy and Politics
SUNY Chancellor Visits Dutchess Community College To Launch SUNY Reconnect
SUNY Chancellor John King Jr. and other officials toured Dutchess Community College on Monday to promote the launch of SUNY Reconnect, an initiative offering free college to New Yorkers ages 25 to 55 pursuing degrees in high-demand fields. Dutchess Community College is a host site for the new program that creates tuition free access to the college when they pursue an associate degree in one of several high-demand programs including Electrical Technology, Engineering Science. Aviation Maintenance, computer Science and More.
The new program “will help empower New Yorkers 25-55 to achieve their full potential, and power our state economy to a variety of high-demand, well-paying career fields,” said King. The program has the support of County Executive Sue Serino. “At a time when so many adults are working hard to building better futures for themselves and their families, SUNY Reconnect is helping to break down barriers to opportunity, and we’re proud that Dutchess Community College is helping to lead the way.” Each of the Council of Industry’s Hudson Valley Community College partners will be participating in the program.
Read more about SUNY Reconnect
HEAT Act Compromise Still Not Good Enough For New York State Assembly, Will Repeal 100-Foot Rule Instead
The state Assembly has long been the stumbling block for the bill, which has passed multiple times in the state Senate and seeks to align the state’s utility guidelines with its move away from fossil fuels. So much so that last week a compromise bill was introduced that revamped the original legislation specifically to address concerns coming out of the lower chamber. That bill was named "The Customer Savings and Reliability Act" and sought to address those concerns by stressing flexibility for consumers, utility companies and local governments.
Just in case the Assembly still couldn’t get onboard with the compromise, state Sen. Liz Krueger led the Senate in passing both the Customer Savings and Reliability Act as well as a second bill which would simply repeal the 100-foot rule, a key component of both the HEAT Act and its successor, leaving the Assembly to make the call. Ultimately on Monday, the Assembly decided to move only on the straight repeal of the 100-foot rule, which requires that utility companies supply gas to any customer who wants it with the cost falling on ratepayers if they are within 100 feet of an existing line. The repeal is being billed as a step forward by environmental advocates, and a could-be-worse-but-still-bad scenario by opponents of the full HEAT Act.
Read more at NY State of Politics
NY Republicans Erupt Over 'Insulting' US Senate Plan To Keep $10K SALT Cap
The Senate’s version of President Donald Trump’s tax bill calls for a $10,000 cap on the state and local tax deduction — a placeholder figure as Republicans remain divided over the valuable tax break. The draft bill includes the current $10,000 SALT cap, according to a person familiar with the matter. But the Senate will continue to negotiate the deduction as it aims to pass the legislation by a self-imposed July 4 deadline. The House version of the bill calls for a $40,000 SALT cap, with some limits for claiming the write-off based on income.
Some House lawmakers from high-tax states have threatened to block the legislation if the Senate lowers that cap. The $10,000 language suggests that the Senate is willing to engage in a high-stakes and politically divisive negotiation to reach a SALT cap that is far lower than the $40,000 the House agreed upon. Representative Mike Lawler of New York called a $10,000 cap “DEAD ON ARRIVAL.” Fellow New York Representative Nicole Malliotakis said the Senate draft is “insulting” and a “slap in the face.” Senate Majority Leader John Thune said on Fox News Sunday there is no real interest among Republicans who hail from low tax states to raise the SALT cap to the $40,000 level called for in the House-passed version. “I think at the end of the day we’ll find a landing spot. Hopefully that will get the votes we need in the House, a compromise position on the SALT issue,” Thune said.
Political Headlines
- Trump Struggles to Press Deportations Without Damaging the Economy – WSJ
- Alleged Minnesota Shooter—Described As ‘Devout Christian’—Could Face Death Penalty - Forbes
- Trump Hits Lowest Approval Of Second Term In Latest Poll - Forbes
- Battle To Define ‘America First’ Intensifies As Israel Strikes Iran – The Hill
- Solar Stocks Plummet As Senate Version Of Trump’s Tax Bill Cuts Renewable Energy Incentives - CNBC
- Supreme Court Ruling May Free Religious Nonprofits That Serve All From NY Abortion Coverage Mandate – Benefits Pro
- Columbia Faculty Lawsuit Over Trump Administration Funding Cuts Dismissed – The Hill
- Senate Text Would Phase Out EV Tax Credit For All Automakers 180 Days After Budget Bill Passes - Autonews
- US Political Violence: 'Decades Of Polarisation Have Fuelled A Perfect Storm,’ Historian Says – France 24
- What New 'Big Beautiful Bill' Proposals Mean for Medicaid, SALT - Newsweek
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
Targeted Cancer Drugs May Replace Chemo For Some Patients — And Drugmakers Say They’re Getting Closer
The pharmaceutical industry says a popular class of targeted cancer therapies could one day replace chemotherapy and its potential for harsh side effects in some cases. Antibody-drug conjugates (ADCs) have taken major strides in recent years, as companies including AstraZeneca, Daiichi Sankyo, Pfizer and Merck are developing drugs in the space that could ease the trials of cancer treatment and make them big money in the process. Drugmakers have poured billions of dollars into developing ADCs.
The medicines are designed to deliver potent chemotherapy directly to cancer cells while sparing surrounding healthy cells. That’s unlike traditional chemotherapy, which can affect both types of cells. But it will likely take years before ADCs can replace chemo more broadly, and some outside cancer experts say the pharmaceutical industry still has more work to do to refine the treatments. Still, some companies say ADCs have shown the ability to replace chemotherapy in certain settings. Other drugmakers say they are inching closer to developing ADCs that can be used before chemo — or at the very least, learning from previous missteps.
Industry News
Trade War Updates
- US And UK Announce A Trade Deal, But Steel Imports Are Still Being Negotiated – AP
- Trump Blasts EU Over ‘Unfair’ Trade Offer - Politico
- The US-China Rivalry Is Reshaping Global Supply Chains – Who Benefits Most? - SCMP
- Canada Considers ‘Buy Canadian’ Policy for Steel, Aluminum - WSJ
- ‘Donald Is Right’ And China Is The Problem, EU Chief Says - Politico
- How Hungary Became China’s New Factory Hub In The Heart Of Europe - SCMP
- Mexico's 'Narcocorridos', Songs Glorifying Drug Cartels, Create Controversy – France 24
- Facing Tariff Barriers And Tourist Boycotts, Northeastern States And Their Neighbors To The North Strive For Greater Cooperation. - Politico
- Trump’s Tariffs: Tracking The Status Of International Trade Actions –Supply Chain Dive
Clarios Invests $1B To Build Critical Minerals Processing And Recovery Plant In The United States
Clarios, a manufacturer and recycler of low-voltage batteries, has announced plans to build a critical minerals processing and recovery plant in the United States. The company plans to invest up to $1 billion in the project. The company has completed preliminary site assessments and is currently evaluating potential locations in Indiana, Texas, and Utah. The new facility will process critical minerals, including antimony, which are essential to the production of defense-related equipment such as ammunition, night vision goggles, infrared sensors, and precision optics.
The plant will use advanced technologies to extract antimony and other critical minerals from recycled materials, enhancing the efficiency and sustainability of the recycling process. Clarios' strategy supports recent executive orders and will utilize federal advanced manufacturing tax credits to bolster the domestic supply chain. The site is expected to serve as a hub for future investments in advanced battery manufacturing and technology development.
Israel Drama And Good News For The F-35: Paris Air Show Day 1
The first trade day of the Paris Air Show opened with bright sunshine, but some exhibitors found themselves on the blacklist when the Israeli stands from Elbit Systems, Rafael, IAI and Uvision were covered up and closed – reportedly on instructions from the French government who instructed them to cover up lethal weapon systems on display in the wake of an escalating Israel-Iran conflict. While defence was very much on the agenda, the first day also saw Airbus end the day with total of 132 firm orders for Airbus aircraft, from four customers – as well as an electric aircraft that opened the show.
Over at Lockheed Martin, the company briefed on the F-35 fighter, with the long awaited ‘Block 4’ upgrade a key topic. That would include some 75 upgrades – with Lockheed Martin describing it as “the most aggressive upgrade to a fighter in history” – with enhanced interoperability and new weapons. The company is now producing some 170-190 F-35s a year, with the 200th TR3 jet having being delivered last week. Lockheed said that bar one remaining combat capability to be signed off on, TR3 is now stable and the software update is complete.
P&G Aims For Resiliency With Supply Chain Redesign
Procter & Gamble plans to initiate a supply chain reorganization as part of a two-year restructuring plan set to begin in fiscal 2026, executives said June 5 at the dbAccess Global Consumer Conference. The reorganization includes discontinuing brands at the category, country and product level, and “may include some brand divestitures,” CFO Andre Schulten said. The brand changes would drive supply chain modifications.
“These portfolio moves enable us to make related interventions in the supply chain: rightsizing, right-locating production to drive efficiencies, faster innovation, cost reduction and even more reliable and resilient supply,” Schulten said. The restructuring project’s overall cost would range from $1 billion to $1.6 billion before tax, Schulten said. The company will disclose more details on its fiscal year-end earnings call in July, he added.
Read more at Supply Chain Dive
Kraft Heinz Is Ditching Artificial Dyes
Kraft Heinz is breaking up with artificial dyes, a category of food additives in the Trump administration’s crosshairs. The food giant said it plans to remove the dyes from its U.S. products before the end of 2027. Kraft Heinz also said it would no longer use artificial colors in new products in the U.S. The move comes as the Trump administration is pushing to strip artificial dyes from the U.S. food supply. The Health and Human Services Department and Food and Drug Administration said in April that it aimed to work with the food industry to remove six synthetic dyes by the end of next year.
Kraft Heinz, which is co-headquartered in Chicago and Pittsburgh, said that nearly 90% of its U.S. products, in terms of sales, don’t use artificial dyes. For those that do, including many Crystal Light, Heinz relish, Kool-Aid, Jell-O and Jet-Puffed products, the company said that it would remove, replace or reinvent colors. For most products, Kraft Heinz said it can replace artificial colors with natural ones. With existing colors harder to re-create naturally, like greens and blues, the company said it would replace those with other colors. In products where color isn’t critical, Kraft Heinz will remove them entirely.
Jabil Plans $500M Venture To Build AI Data Centers
Electronics component maker Jabil is betting on surging infrastructure demand for AI data centers throughout the U.S. Jabil said on Tuesday that it’s investing $500 million over the next several years to expand its footprint to support cloud and AI data center customers. The investment includes large-scale production facilities, capital investments and workforce development. Jabil has not announced any sites for new facilities yet, but expects its newest data center to be operational by mid-2026.
Based in St. Petersburg, Florida, Jabil is a global manufacturing and supply chain solutions company. Jabil’s customers include major brands in logistics, packaging, mobility, automotive, wearables, aerospace, enterprise, digital home, point-of-sale, printing and energy. Some of the company’s largest clients include Apple, UPS and Amazon. Jabil has 30 facilities across the U.S. and more than 100 worldwide, with investments in automation, robotics and process optimization. The company’s $500 million investment follows recent announcements by tech companies Apple, Nvidia and Foxconn, to create manufacturing facilities in the U.S.
Mattel Brings AI Into the Toy Room With OpenAI Deal
Mattel, the toy giant behind Barbie and Hot Wheels, has struck a deal with OpenAI to help design and develop toys using the startup’s technology, signaling a new era of AI-assisted play tied to its billion-dollar brands. The first product born out of this partnership—powered by OpenAI’s flagship product ChatGPT and its other generative AI tools—is expected to debut later this year, though details remain under wraps.
The discussion between the two companies began last year. The deal does not entail licensing Mattel’s intellectual property to OpenAI, retaining full creative control over its products. The partnership also includes Mattel adopting ChatGPT Enterprise across its business to bolster product development and creative brainstorming with the aim of accelerating innovation. OpenAI also launched its “most intelligent mode,” GPT o3-pro, earlier this week. The model handles everything from analyzing files to searching the web, pushing the bar for AI capabilities.
Lilly To Buy Gene-Editing Partner Verve For Up To $1.3 Billion In Cardiac Care Push
Eli Lilly will acquire gene-editing startup Verve Therapeutics for up to $1.3 billion, the companies said on Tuesday, to boost its pipeline of experimental medicines beyond its blockbuster weight-loss and diabetes drugs. The U.S. drugmaker, which has struck multiple partnership deals with gene-editing companies in the last two years, will buy Verve for $10.5 per share, which is at a premium of 67.5% to the company’s last close.
Lilly - the world’s largest drugmaker by market capitalization - and Verve were already partnering to develop one-time gene-editing therapies to reduce high cholesterol in people with heart disease, which are expected to be used in combination with other drugs. Verve’s lead therapies, which are in early-stage trials, use a form of gene editing known as base editing that causes one-time changes to the DNA, potentially turning off genes that contribute to high cholesterol levels. Base editing is a next-generation form of gene editing which erases and rewrites a specific letter in a gene. Verve’s gene-editing medicines target the PCSK9, ANGPTL3 and LPA genes responsible for regulating blood cholesterol.
Startup JetZero To Build $4.7B Factory In North Carolina
Aerospace startup JetZero unveiled plans on Thursday to build its first manufacturing and assembly facility in Greensboro, North Carolina as it looks to break into commercial aerospace production. The $4.7 billion plant is expected to create 14,500 jobs, the largest job announcement in state history, according to the Economic Development Partnership of North Carolina. JetZero aims to begin construction next year, and eventually produce 20 planes per month when at full capacity by late next decade. The startup plans to deliver its first commercial aircraft by the early 2030s.
JetZero is aiming to take on the market by offering a wider design that tackles what the startup says are some of the key pain points with current aircraft. Its signature Z4 plane will feature a wider boarding door and more passenger sections that prioritize personal space and individual overhead bins, according to a release. The startup also claims its planes will feature 50% better fuel efficiency as a result of its all-wing design. Each plane will seat 250 passengers and be able to fly routes up to 5,000 nautical miles.
Read more at Manufacturing Dive
Japan And UK To Sign Memorandum For Nuclear Fusion Collaboration
On Thursday, the UK and Japan are expected to sign a collaboration agreement on the development of nuclear fusion. The target is to present a viable demo of the technology by the end of the 2030s, reports the Nikkei. Japan’s contribution is expected to be it’s manufacturing capabilities while the UK’s contribution is expected to be its expertise in remotely operating robots inside nuclear facilities and managing fusion reactors.
Both countries have been working together to use remotely controlled robots in the de-commissioning of the Fukushima nuclear power plant. Both sides will cooperate on R&D and establishing safety procedures. Earlier this month the UK’s Tokamak Energy – a spin-off from UKAEA – announced the establishment of a subsidiary in Tokyol
Read more at Electronics Weekly