Council of Industry of Southeastern New York Logo

Member Briefing June 2, 2025

Date postedJune 2, 2025
Posted By: Harold King Daily Briefing,

Top Story

Commerce Dept: U.S. Consumers Pull Back Spending, PCE Slows to 2.1% Annually and Personal Income Rose By .8 % In April

Consumer spending rose 0.2% in April, but for the most part, the gains were in the services categories, the largest of which were non-discretionary categories such as housing and utilities as well as health care. Consumers cut back on spending in most goods categories in April after having pulled forward demand to get ahead of tariffs earlier in the year. The retreat was led by non-durable goods and motor vehicles as well as clothing and recreational goods. The only two goods categories that were meaningfully positive in April were household furnishings which notched a $1.1 billion gain and gasoline where the gain was mostly attributable to rising prices at the pump.

Meanwhile, Personal income shot higher in April rising 0.8%, well north of the 0.3% that had been expected. The fact that it comes on the heels of an upwardly revised increase the prior month makes the gain all the more impressive. Looking at the underlying details, a standout was a surge in transfer payments from the U.S. government, specifically Social Security payments, reflecting payments associated with the Social Security Fairness Act.

At this early stage, there is not any particularly compelling evidence tariffs have had a material impact on inflation...yet. Headline PCE rose just 0.1% in April, coming on the heels of last month’s goose-egg, the year-over-year measure slipped to just 2.1% from 2.3% in March. Core PCE similarly rose just 0.1% in April putting the annual rate of core PCE inflation at 2.5% (chart). As we think about the rest of the year, we suspect inflation will be characterized by a continued slight cooling in services inflation and a boost from the goods side that will largely be a function of how things play out in the ever-changing world of tariffs.

Read more at Wells Fargo


U.S. Economy Shrank At 0.2% Rate In First Quarter, Slight Improvement From 0.3% Estimate

U.S. GDP shrank by an annualised 0.2 per cent in the first quarter, according to revised data that confirmed the first contraction since 2022, as Donald Trump’s trade war ripples across the world’s biggest economy. The fall in GDP compared with a 2.4 per cent expansion in the final quarter of 2024, and was largely caused by a surge in imports as companies rushed to buy foreign-made goods before the US president’s “liberation day” tariff announcement in early April.

Thursday’s reading from the Bureau of Economic Analysis was revised slightly higher from the 0.3 per cent contraction reflected in initial data released last month. But the change was not enough to put the economy in positive territory for the period as consumer spending cooled. The statistics for the first quarter were distorted by a surge in imports — driven by companies’ tariff fears — that were not offset by a corresponding rise in inventory investment or purchases by consumers. While investment rose in the revised statistics, that was largely counteracted by a fall in the rate of growth in consumer spending — especially in services and housing — as Americans contend with higher prices and uncertainty stemming from the trade war.

Read more at The Financial Times

What's Next For Tariffs After Whiplash Court Rulings?

President Donald Trump's steepest tariffs fell into legal limbo last week. The Trump administration could ultimately prevail in a court battle over the levies or seek other legal authorities to reimpose some of the tariffs, experts told ABC News, but a complete revival of the policy now faces formidable obstacles. Two separate federal courts invalidated far-reaching levies on dozens of countries.  The rulings also struck down 30% tariffs imposed on China as well as a baseline 10% levy slapped on nearly all imports, among other measures. A federal appeals court moved to temporarily reinstate the tariffs on Thursday afternoon, however, keeping the levies in place while judges weigh the underlying legal justification.

  • Here's what to know about what's next for Trump's tariffs and what happens to the tax revenue already paid, according to experts.
  • The court rulings this week set off a legal battle over the tariffs that could stretch on for more than a year and make its way to the Supreme Court, experts told ABC News.
  • If the courts ultimately rule against Trump's tariffs, the White House may explore other legal authorities as a means of reviving some of the levies, experts said.
  • Importers who have paid the tariffs at issue will receive government refunds if the levies fall victim to legal challenges, experts told ABC News.

Read more at ABC

Global Headlines

Middle East

Ukraine

Other Headlines

Policy and Politics

Recycling, HEAT Act, Bottle Bill Are Key Issues As NYS Lawmakers Near End Of Session

New York State Democratic lawmakers are eyeing legislation that would reduce plastic packaging, increase recycling and move utilities away from fossil fuels before the legislative session ends in June. Proposed legislation also includes bills to increase the 5-cent bottle deposit to 10-cents to encourage recycling and to create a rebate for commercial landscapers who switch to electric leaf blowers.

The proposals come as the state looks to reduce its greenhouse gas emissions and increase the use of renewable energy under the 2019 climate law, which sets a goal of getting all electricity from emission-free sources by 2040 and reducing statewide emissions by 85% from 1990 levels by 2050. But the state Legislature is facing a condensed time period after the state’s $254 billion budget was passed more than a month late. Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers) told reporters this month she expects her house to be done June 12 on time. State Assembly Speaker Carl Heastie (D-Bronx) said he plans to keep his conference until June 17.

Read more at Newsday

America Let Its Military-Industrial Might Wither. China’s Is Booming.

Adapting to the dual challenge of China’s military and its economy has been a focus of U.S. administrations for years. America is losing ground. Modern warfare is a contest of industrial might, as Russia’s invasion of Ukraine has shown. Both sides are burning through arsenals of artillery shells, rockets and military vehicles. Automated factories now spit out drones day and night. Even an old-fashioned howitzer requires precision manufacturing. The U.S. won World War II in part by producing more of everything—from bullets to food—than its enemies. One California shipyard in 1942 assembled a supply ship in less than five days.

America is no longer capable of that kind of manufacturing feat. Today, the country that can make the most of almost everything is China. Its products run the gamut from basic chemicals to advanced machinery. With tensions rising between the U.S. and China, the two countries’ industrial capacity is coming into focus as a key battleground in any conflict. China not only has more factories, it is also modernizing them faster, with technologies such as 5G private networks for automation. That means it can more quickly and efficiently link manufacturing equipment to designers and users, updating products at speeds that traditional manufacturing can’t achieve. In Ukraine, constant feedback from front-line troops to drone makers has allowed the country to make rapid advances in robotic aircraft.

Read more at The WSJ

Supreme Court Limits Agency Environmental Reviews – Only Direct Effects to Be Considered

The Supreme Court on Thursday ruled that federal agencies conducting environmental reviews can take a more limited view of the impacts of transportation and energy infrastructure projects they are permitting. The 8-0 ruling follows years of lower courts demanding broader consideration of the effects of projects like liquefied natural gas export terminals and energy-moving projects like rail lines and pipelines to account for the climate effects of fossil fuels that move through them and will later be burned.

The ruling follows years of complaints from industry and Republicans — and some Democrats — that NEPA reviews had ballooned in scope and become a legal hurdle in some cases. Lawsuits launched by environmental groups against major energy projects have sometimes led to delays or approvals being overturned after courts dinged agencies for not sufficiently studying the impacts of climate change or environmental justice — a reference to the disproportionate pollution impacts experienced by communities of color, low-incomes residents and rural areas.

Read more at Politico

Political Headlines


Health and Wellness

A New Covid Variant Could Drive Up Summer Cases: Here's What You Should Know

A new Covid variant that’s gaining momentum globally has landed in the U.S. The World Health Organization announced last week that it was monitoring the variant, NB.1.8.1, following a rise in cases in several parts of the world, including Europe, Southeast Asia and North and South America. The variant appears to be more transmissible than the dominant strain worldwide, LP.8.1, meaning it has the potential to drive up cases this summer. But it does not seem to be much better than LP.8.1 at evading protection from vaccines or a prior infection. And the WHO has found no evidence that it leads to more severe illness, so the agency has determined that it doesn’t pose an added health risk.

Infectious disease doctors said NB.1.8.1 could potentially lead to a small surge of infections for two reasons: The U.S. hasn’t seen a Covid wave in awhile and less than a quarter of adults have received the latest booster, meaning population immunity has likely waned. “It may unfortunately come back with a little bit of vengeance on us. Let’s hope that doesn’t happen, but I am concerned that we may be setting ourselves up for that with this combination of factors,” said Dr. Thomas Russo, chief of infectious diseases at the University at Buffalo Jacobs School of Medicine and Biomedical Sciences. Covid cases typically rise twice a year — in the summer and winter — regardless of what variant is circulating, said Dr. Scott Roberts, associate medical director of infection prevention at the Yale School of Medicine.

Read more at NBC

Industry News

Trade War Updates

Trump And Xi Are Likely To Talk Soon About Trade, Though No Date Has Been Set, Hassett Says

National Economic Council director Kevin Hassett suggested on Sunday that President Donald Trump and China’s President Xi Jinping could have a conversation about trade as soon as this week. Hassett said, however, that a specific date for a conversation between the two leaders has not been set. He followed up by saying that he’s not sure if it’s been scheduled for a specific date, “but it has been discussed that the two of them will talk about the Geneva agreement, which we’re all very favorably inclined towards.”

“I’d like to also add that people are talking every day,” Hassett said, noting that U.S. Trade Representative Jamieson Greer’s team is talking with their Chinese counterparts “every day trying to move the ball forward on this matter.” A discussion between Trump and Xi would mark a major step in negotiations between the two nations, weeks after leaders of both countries met in Switzerland and reached a 90-day trade deal.

Read more at CNBC

Company Earnings of Note

Dell Technologies on Thursday raised its full-year earnings forecast and issued a stronger-than-expected forecast for the current quarter. However, Dell’s adjusted earnings per share came up short versus LSEG estimates on in-line revenue. Earnings per share were $1.55 adjusted vs. $1.69 estimated and revenue was $23.38 billion vs. $23.14 billion estimated. Dell said it expects $2.25 in adjusted earnings per share for the current quarter, with between $28.5 billion and $29.5 billion in revenue. Company officials attributed the strong guidance to $7 billion in artificial intelligence systems that are expected to ship during the quarter, which are higher-margin than other Dell systems. - CNBC

Gap delivered another strong earnings beat, but President Donald Trump’s trade war is weighing on its turnaround. Tariffs could cost the company between $250 million and $300 million, it said, but with mitigation efforts it expects the cost to be between $100 million and $150 million. Earnings per share were 51 cents vs. 45 cents expected and revenue was $3.46 billion vs. $3.42 billion expected. The company’s reported net income for the three-month period that ended May 3 was $193 million, or 51 cents per share, compared with $158 million, or 41 cents per share, a year earlier. Sales rose to $3.46 billion, up about 2% from $3.39 billion a year earlier. - CNBC

Sanofi, Regeneron Respiratory Drug Delivers Mixed Results in Key Trials

Sanofi and Regeneron Pharmaceuticals reported mixed results for two late-stage trials of an experimental respiratory drug they are jointly developing, with one study meeting the primary goal and a second missing the main target. Sanofi had touted the drug, itepekimab, as a potential blockbuster candidate and estimated in late 2023 that it could generate annual peak sales of between 2 billion and 5 billion euros ($2.27 billion-$5.68 billion). The companies are looking at the data from both trials and will discuss next steps with regulatory authorities, they said Friday.

The clinical trials evaluated the efficacy of the drug in reducing moderate or severe acute exacerbations of chronic obstructive pulmonary disease in former smokers compared to a placebo, the companies said. One of the trials met the primary goal with a statistically significant reduction of 27% after one year of patients getting the treatment every two weeks, while the other study missed the objective with a 2% reduction, according to data released by Sanofi and Regeneron. The second study didn’t meet the primary endpoint despite a benefit seen earlier in the study, they added.

Read more at The WSJ

E.l.f. Beauty Remains Committed To Manufacturing In China Despite Tariffs

Affordable cosmetics company e.l.f. Beauty (ELF) has long relied on China to keep its prices low and create value-oriented "dupes" of higher-end products. Now, President Trump’s economic agenda is putting that model to the test. E.l.f. sources 75% of its products from China, making it highly exposed to higher costs from Trump's tariffs (though less so than in 2019, when the company sourced 100% of its products from the country).

Unlike other companies that have vocally pivoted to American onshoring to avoid being singled out by the president, CEO Tarang Amin said on the company's earnings call that e.l.f. remains committed to its Chinese suppliers. "We believe our unique China-based supply chain is an area of competitive advantage we've been honing for the past 21 years," Amin said. "It underpins our value proposition, delivering the best combination of quality, cost, and speed in our industry. We're ... committed to our China team and suppliers."

Read more at Yahoo Finance

Motorola To Acquire Defense Radio Maker For $4.4B

Motorola Solutions is set to acquire defense radio maker Silvus Technologies for $4.4 billion, the Chicago-based technology, communications and security company said Wednesday. The all-cash agreement, expected to close by the end of 2025, would expand Motorola’s portfolio to include technologies that address safety, security and defense use cases for autonomous systems and secure high-bandwidth communications. Silvus, based in Los Angeles, could also receive an additional payout of $600 million based on its business performance through 2027 and 2028 as part of the deal.

Motorola’s success over the years has stemmed largely from focusing on rugged, weather-proof technologies used across industries, such as radios and video surveillance systems, as well command center and support services software. Acquiring Silvus would expand Motorola’s portfolio to include devices with mobile ad-hoc network technology, also known as MANET, which can transmit data, audio and video without any pre-existing network infrastructure. The technology is currently used in military and law enforcement use cases.

Read more at Manufacturing Dive

Boeing to Restart China Deliveries Soon, Up Production of 737 Max Jets

Boeing Corp. will resume aircraft deliveries to Chinese airlines sometime during June, according to CEO Kelly Ortberg’s remarks to an investor conference, on May 29. Such a development would be significant to the aircraft builder’s earnings, which are impacted by its inability to collect the revenue products completed but undelivered to buyers. Currently, Boeing lists a total of 128 outstanding orders for Chinese customers, including 95 737 MAX single-aisle jets, 22 777 long-range aircraft, and 11 wide-body 787 Dreamliners. 

Ortberg also told the investor conference that the OEM’s 737 MAX 7 and MAX 10 aircraft variants are on track for FAA certification by the end of 2025.  The CEO also forecast that Boeing soon will increase its production rate for 737 MAX jets to 42 per month, with Federal Aviation Administration approval. Since last year the FAA has set the rate at 38 jets/month, to ensure that safety and quality-control standards are maintained. Ortberg held out the further possibility that Boeing could increase the rate to 47 jets/month later this year.

Read more at American Machinist

Controversial Constitution Pipeline Project in New York Is About to Be Revived

Developers of two left-for-dead natural-gas pipeline projects in New York are preparing to file permitting paperwork with federal energy regulators to move forward with the projects, according to people familiar with the matter. Pipeline company Williams is set to try again to build the Constitution and Northeast Supply Enhancement pipelines, which would shuttle natural gas from Appalachian gas fields throughout the Northeast.

The resurrection follows President Trump’s decision last week to reverse his April stop-work order on a major wind project off the state’s coast and suggests horse-trading between Trump and New York Gov. Kathy Hochul. They spoke by phone earlier this month in a bid to save one of the signature economic development projects of her administration and deliver a promise Trump has made to bring back the dormant pipeline project.

Read more at The WSJ

How the Classic Navy Blazer Became a Case Study for ‘Made in America’

Jacob Hurwitz started his company, American Trench, in 2013 with a trench coat and seven pairs of socks, all designed and produced in the United States. In the years that followed, he expanded American Trench’s range with items such as canvas trousers, oxford shirts and mesh shorts, that were all made in America—and, when possible, made from materials themselves sourced or produced here, too. “It was all I wanted to do. If I couldn’t make it here, I wasn’t interested,” he said recently, sitting in his office in Ardmore, Pa.

As he and his small team built out their offering, one garment in particular eluded him: the classic navy blazer. The Trump administration’s proposed tariffs are meant to reinvigorate American manufacturing. But stiff import taxes can’t instantaneously address two stark and interconnected facts that designers face: There are significantly fewer American factories capable of producing high-quality textiles and clothing than there once were, and doing so is more expensive here than in other countries to begin with. Today, Hurwitz explained, some 98% of the clothing purchased by Americans is imported—a precise inversion, he notes, of the proportion during the country’s midcentury manufacturing peak.  And much of the know-how, to say nothing of the production capacity, has disappeared as clothing companies shipped production overseas. “We not only lost machines and spaces and capacity, we also lost the people who knew how to do this,” said Rachel Slade, author of “Making It in America.”

Read more at WSJ

Ben & Jerry’s Calls Gaza Conflict a Genocide, Putting Unilever in a Tough Spot

Ben & Jerry’s is calling the Gaza conflict a genocide, a rare move for a big consumer brand and one that puts its corporate parent in a difficult position. “We stand with all who raise their voices against genocide in Gaza—from petition-signers to street marchers to those risking arrest,” Ben & Jerry’s independent board said in a statement viewed by The Wall Street Journal. “When humanity is at stake, silence is not an option, now is the time to speak truth to power.” Under an unusual provision of the acquisition agreement Unilever struck with Ben & Jerry’s in 2000, the brand’s independent board retains decision-making about its social mission and marketing.

The ice cream brand and its corporate parent have fought bitterly for years over the social activism of Ben & Jerry’s independent board—particularly its public stances on Israel and the Palestinian territories. Unilever’s relationship with Ben & Jerry’s independent board turned acrimonious in 2021, when Ben & Jerry’s halted sales of its products in Jewish settlements in the Israeli-occupied West Bank and contested East Jerusalem, saying selling there was inconsistent with its values.  As a result, many countries found Unilever to be in violation of their anti-boycott, divestment and sanctions laws. That led to lawsuits and sanctions against Unilever, and the divestment of hundreds of millions of dollars in Unilever’s stock, Unilever said in a March legal filing. Unilever is now planning to spin off its ice cream assets, as part of a strategy to simplify Unilever and boost growth at the company.

Read more at The WSJ

 

 

Categories

Most Recent Posts