Member Briefing June 30, 2025
Beyond Aircraft-Related Pop Higher, Durable Orders Steady in May
Orders for long-lasting U.S. manufactured goods rebounded sharply in May, boosted by a surge in commercial aircraft bookings, though economic uncertainty stemming from import tariffs remains a constraint for business spending on capital. Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, jumped 16.4% last month after a revised 6.6% decline in April, the Commerce Department's Census Bureau said on Thursday.
- Transportation equipment orders soared 48.3%, driven by a 230.8% surge in commercial aircraft orders, which are extremely volatile.
- Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rebounded 1.7% in May after an upwardly revised 1.4% decline in April.
- Shipments of core capital goods rose 0.5% after being unchanged in the prior month.
- Non-defense capital goods orders accelerated 49.4% after plunging 19.1% in April. Shipments of these goods were unchanged after advancing 3.6% in April.
Commerce Dept: May PCE = 2.3%, Core PCE = 2.7%, Consumer Sending Fell, Personal Income Fell
The personal consumption expenditures price index, the Fed’s primary inflation reading, rose a seasonally adjusted 0.1% for the month, putting the annual inflation rate at 2.3%. Economists surveyed by Dow Jones had been looking for respective levels of 0.1% and 2.3%. Excluding food and energy, core PCE posted respective readings of 0.2% and 2.7%, compared with estimates for 0.1% and 2.6%. Fed policymakers consider core to be a better measure of long-term trends because of historic volatility in the two categories. The annual rate was 0.1 percentage point ahead of the April reading.
Along with the inflation numbers, consumer spending and income showed further signs of weakening. Spending fell 0.1% for the month, compared with the estimate for an increase of 0.1%. Personal income declined 0.4%, against the forecast for a gain of 0.3%. Food prices increased 0.2%, but that was offset by a 1% decline in energy-related goods and services costs, including a 2.2% slide in gasoline and other energy goods. Shelter prices increased 0.3%. Services prices have been responsible for most of the upward pressure on inflation, as they posted a 3.4% increase from a year ago. Goods have risen just 0.1%.
Fed On Hold To See If Tariff-Induced Inflation Persists, Powell Says
Federal Reserve Chair Jerome Powell on Wednesday said the central bank is holding the benchmark interest rate steady while determining whether tariff-induced inflation proves to be persistent or short-lived. “In a situation like this, where the process could go on for a long time, where the effects could be large or small, it’s just something you want to approach carefully,” Powell said in testimony to the Senate Banking Committee, referring to the potential impact from the highest, most sweeping U.S. import duties since the 1930s.
Under one scenario, price pressure from tariffs “comes in quickly and is over and done,” like the jolt from a surge in oil prices, Powell said. The Fed also needs to consider the risk that import duties may trigger “a process that goes on multiple shocks for years, for example, or if the shocks are very large,” he said.
Read more at Supply Chain Dive
Global Headlines
Middle East
- Trump Calls For A Deal On Israel's War In Gaza, As Signs Of Progress Emerge – NPR
- UN Nuclear Watchdog Chief Says Iran Could Again Begin Enriching Uranium In ‘Matter Of Months’ - CNN
- Iranian Lawmakers Vote To Suspend Cooperation With UN Nuclear Watchdog – France 24
- Iran Turns To Internal Crackdown In Wake Of 12-Day War - Reuters
- U.S. Strikes On Iran's Nuclear Sites Set Up "Cat-And-Mouse" Hunt For Missing Uranium - Reuters
- Battered By War, Tehran Responds With Repression And Paranoia – France 24
- How Israel-Aligned Hackers Hobbled Iran’s Financial System - WSJ
- Iran's Khamenei Gives US Fresh Warning in First Statement Since Ceasefire - 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
- Russia Masses 50,000 Troops Around Sumy, Putting Ukraine in Precarious Position - WSJ
- Russia Launched Its Largest Aerial Attack Of The War, Ukraine Says – Fox
- Ukraine F-16 Pilot Killed While Repelling Large-Scale Russian Air Attack On Ukraine - Reuters
- Ukrainian Forces Halt Russian Advance In Sumy Region, Says Army Chief - BBC
- Ukraine On Track To Withdraw From Ottawa Anti-Personnel Mines Treaty, Zelenskiy Decree Shows - Reuters
- Zelensky And Council Of Europe Rights Body Sign Accord For Ukraine War Tribunal – France 24
- Video: Prisoners Of War Are Welcomed Back In Ukraine As Part Of Swap With Russia Agreed In Istanbul - AP
- Rubio Surprises NATO Allies With Softer Rhetoric On Russia Sanctions – 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
- The Major Trump Question Left Unanswered at NATO Summit – Newsweek
- Hong Kong's Last Active Pro-Democracy Group Says It Will Disband Amid Security Crackdown - Reuters
- EU Considers Lowering Tariffs on U.S. Imports in Bid to Woo Trump - WSJ
- France To Cut Extra €4.7B In Spending This Year As Debt Hits New Record - Politico
- Ecuador's Most Wanted Drug Lord Captured In 'Underground Bunker' - BBC
- The Coup Leader Who’s Become an Anti-Western Hero in Africa and Beyond - WSJ
- UK Police Studying Glastonbury Performances After Anti-Israel Chants - Reuters
- Europe Is Recruiting Academics Disenchanted With America - WSJ
- China Reacts to 'Massive' NATO Warning - Newsweek
Policy and Politics
Sweeping Tax-Cut, Spending Bill Clears First US Senate Hurdle
The Senate geared up Sunday for an all-night session of debate and amendment votes on the GOP’s “big, beautiful bill,” after Republicans narrowly advanced the measure in a 51-49 vote that set up more push-and-pull before final passage. The 940-page legislation is driving a wedge between the GOP’s two wings, just as the party is racing to pass the measure early this week. Centrists have raised concerns about cutting benefit programs and straining state budgets, while fiscal conservatives are pushing for even more cuts to rein in federal budget deficits.
If the Senate manages to pass the bill, getting the measure to Trump by Republicans’ self-imposed July 4 deadline would require another vote from the House. That may be challenging in that chamber as well, where Republicans have a narrow 220-212 majority and their initial version of the bill passed by just one vote last month. Moderate House lawmakers such as Rep. David Valadao (R., Calif.) are warning about Medicaid cuts. Others are expected to object because the bill increases deficits by nearly $500 billion more than House Republicans previously said they could accept.
Trump Wants More Drones And Missiles, Fewer F-35s In Flat $893 Billion Budget Request
U.S. President Donald Trump wants a pay raise for troops, more high-tech missiles and drones in next year's defense budget, while cutting Navy jobs, and buying fewer ships and fighter jets to save money, according to budget materials posted Wednesday. At $892.6 billion, the defense and national security budget request is flat compared with this year. The White House said the funding will be used to deter Chinese aggression in the Indo-Pacific, and revitalize the defense industrial base.
In the 2026 budget Trump requested fewer F-35 jets made by Lockheed Martin and only three warships. Procurement of a Virginia-class made by General Dynamics and Huntington Ingalls Industries (and 15 other ships are expected to be included in a separate appropriation bill, the Navy said. The budget asks for a 3.8% pay raise for troops, but also trims costs by retiring older weaponry including ships and planes that are more expensive to operate. Under the plan, the Navy will reduce its civilian employee workforce by 7,286 people. Defense spending usually accounts for about half of the U.S. discretionary budget; the rest goes to transportation, education, diplomacy and other departments.
Administration Takes on ACA Enrollment Fraud With New Plan
Officials at the Centers for Medicare and Medicaid, the agency in charge of the ACA exchange system, said in a new set of ACA exchange system final regulations that they're going ahead with imposing tough new enrollment rules. The new enrollment rules will cut enrollment in the short run but should make the system healthier, CMS officials say the introduction to the new regulations. Although enrollment would be much lower in 2026 than in 2025, it would be about the same as in 2022.
During the peak years of the COVID-19 pandemic, exchange programs offered universal or nearly universal access to special enrollment periods. Congress also provided a temporary increase in the generosity of the ACA premium tax credit program, to help pay for coverage if the premiums would eat up too much of their income even if their income was over 400% of the federal poverty level. The COVID emergency subsidy increase is set to expire Dec. 31.
Political Headlines
- US, China Announce A Trade Agreement — Again. Here’s What It Means – AP
- Canada Drops Digital Services Tech Tax To Restart US Trade Talks - BBC
- Tracking PFAS Legislation Across The US – Manufacturing Dive
- US Judge Extends Block On Trump's Bid To Eliminate Job Corps Program - Reuters
- North Carolina Sen. Thom Tillis Won’t Seek Re-Election After Crossing Trump - WSJ
- Zohran Mamdani’s Victory In NYC Mayoral Primary Leaves Wall Street ‘Alarmed’ And ‘Depressed’ - CNBC
- SCOTUS Limits Federal Judges’ Ability To Block Executive Actions Nationwide - Politico
- SCOTUS Upholds Key Obamacare Measure On Preventive Care - NPR
- SCOTUS: Parents Can Opt Kids Out Of Classes With LGBTQ Book Characters - NPR
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
Milli Spinner: A Game-Changing Way To Treat Stroke
Researchers at Stanford Engineering have developed a new technique called the milli-spinner thrombectomy that could significantly improve success rates in treating strokes, as well as heart attacks, pulmonary embolisms, and other clot-related diseases. When treating an ischemic stroke – where a clot is blocking the flow of oxygen to the brain – every minute counts. The more quickly doctors can remove the clot and restore blood flow, the more brain cells will survive, and the more likely patients are to have a good outcome. But current technologies only successfully remove clots on the first try about 50% of the time, and in about 15% of cases, they fail completely.
In a paper published June 4 in Nature, the researchers used both flow models and animal studies to show that the milli-spinner significantly outperforms available treatments and offers a new approach for fast, easy, and complete clot removal. “With existing technology, there’s no way to reduce the size of the clot. They rely on deforming and rupturing the clot to remove it,” said Renee Zhao, an assistant professor of mechanical engineering and senior author on the paper. “What’s unique about the milli-spinner is that it applies compression and shear forces to shrink the entire clot, dramatically reducing the volume without causing rupture.”
Industry News
US Goods Trade Deficit Widens In May As Exports Fall
The U.S. trade deficit in goods increased in May amid a decline in exports, but an ebbing inflow of imports likely positions trade to make a big contribution to gross domestic product in the second quarter. The goods trade gap widened 11.1% to $96.6 billion last month, the Commerce Department's Census Bureau said on Thursday. Exports of goods dropped $9.7 billion to $179.2 billion. Goods imports were little changed at $275.8 billion.
This accompanied off-setting changes in wholesale and retail inventories, which saw the former decrease by .3 percent while the latter increased at the same rate. In real dollars, that translated to end-of-month Advanced Wholesale Inventories of $905.4 billion and Advanced Retail inventories of around $806.6 billion. Both were up compared to the same month one year earlier. Imports likely remained high because businesses tried to pull in more goods before the tariffs took effect.
Jobless Claims Decreased More Than Expected
The number of Americans filing new applications for jobless benefits fell last week, but work opportunities are becoming scarce as businesses remain hesitant to hire because of an uncertain economic outlook, raising the risk of the unemployment rate increasing in June. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 236,000 for the week ended June 21, the Labor Department said. Economists polled by Reuters had forecast 245,000 claims for the latest week.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, jumped 37,000 to a seasonally adjusted 1.974 million during the week ending June 14, the highest level since November 2021, the claims report showed. The so-called continuing claims covered the week during which the government surveyed households for June's unemployment rate. Continuing claims increased between the May and June survey weeks, leading economists to expect that the unemployment rate rose to 4.3% in June from 4.2% in May.
Intel To Shutter Its Automotive Business, Lay Off Department Employees
Intel Corp. plans to shut down its automotive business, the company confirmed Thursday morning. The move is the latest step in the chipmaker’s downsizing under CEO Lip-Bu Tan. The company will fulfill existing customer contracts, but will lay off “most” employees working in Intel’s automotive group, The Oregonian/Oregon Live initially reported after receiving an internal memo about the decision this week.
“We are refocusing on our core client and data center portfolio to strengthen our product offerings and meet the needs of our customers,” the company said in an emailed statement. Details about Intel’s automotive chipmaking business are not disclosed in earnings reports, but the broader client computing group is a significant part of the company. It generated $7.6 billion in the first quarter, comprising roughly half of Intel’s revenue. Approximately 50 million vehicles currently use Intel processors and 18 automotive equipment manufacturers partner with the chipmaker for its technology, according to the company’s website.
Read more at Manufacturing Dive
Trump Now Wields Sweeping Veto Power Over U.S. Steel. Here’s How The ‘Golden Share’ Works
President Donald Trump now personally holds sweeping veto power over U.S. Steel’s decisions in key areas, according to an amended corporate charter filed with the Securities and Exchange Commission. U.S. Steel says Trump holds what the White House calls a “golden share” in the Pittsburgh-based company. The amended charter, however, does not reference future presidents. Instead, it says the veto power passes to the Treasury and Commerce Departments as representatives of the U.S. government after Trump leaves office, according to the SEC filing. A White Housesaid that future presidents can either designate someone to hold the golden share, or assume direct veto power themselves, as Trump has done.
- The golden share gives Trump, and later the Treasury and Commerce Departments, veto power over the following business decisions at U.S. Steel, according to the SEC filing:
- Changing U.S. Steel’s name, moving its headquarters from Pittsburgh, and relocating the company outside the U.S.
- Closing, idling, selling production locations through 2035, and U.S. Steel’s Granite City Works through 2027.
- Cutting the base salary of employees through 2030.
- Reducing, waiving or a delaying the timeline set out for $10.8 billion in capital investment.
- Acquiring any business in the U.S. that competes with U.S. Steel or its suppliers.
- Read more at CNBC
Stellantis Plans $388M Parts Distribution ‘Megahub’ In Metro Detroit
Stellantis is building a $388 million automotive parts “Megahub” in Metro Detroit, the automaker announced in a May 21 press release. The new facility in Van Buren Township is set to be operational by 2027, “further advancing the efficiency and sustainability” of Stellantis’ Mopar service parts distribution network, according to the release. The facility will be key in the automaker’s “long-term plan to modernize and centralize its service parts distribution network”, the company said. “With the Metro Detroit Megahub, we’re building a faster, smarter and more reliable parts distribution network that puts [customer] needs first,” Darren Bradshaw, senior vice president and head of Mopar North America, said in a statement. “This investment reflects our commitment to innovation, sustainability and operational excellence, while also creating a modern, high-tech workplace for our employees.”
The 2023 collective bargaining agreement between Stellantis and the United Auto Workers included the automaker’s plan to overhaul its parts distribution centers. Consolidation is a major component of Stellantis’ plan. The automaker recently sold its Michigan sites in Center Line and Marysville as well as its Milwaukee, Wisconsin parts distribution facility. The centers will continue operating under a sale-leaseback agreement until the Metro Detroit Megahub opens, according to the release.
Read more at Supply Chain Dive
Europe Is Pouring Money Into Defense. Can US Firms Reap The Reward Amid Trans-Atlantic Tension?
European nations are in the process of pouring billions of dollars into their defense budgets, individually and collectively, quickly becoming one of the hottest growth markets for defense on the planet. As Anduril executive Greg Kausner put it, the continent is “having a moment right now.” And at this year’s Paris Air Show, it was evident that the influx of cash has caught the attention of American companies eager to expand their customer base and to do what they can to dive, Scrooge McDuck-style, into that new European pot of money.
The NATO alliance formally adopted a goal of spending 5 percent of members’ GDP on defense and security-related capabilities, an increase that NATO Secretary General Mark Rutte said amounted to “trillions” of extra dollars. Then there’s the European Union’s €800 billion ($928 billion) ReArm Europe spending plan, which includes a €1.5 billion ($1.7 billion) pot of money to boost Europe’s defense industrial base between 2025 to 2027. How much of that is up for grabs by US businesses remains to be seen, as that €1.5 billion fund comes with stipulations mandating that 65 percent of an item’s cost must derive from European companies, Reuters reported earlier this month.
LG opens $1.4 Billion Michigan Factory To Make LFP Batteries For The Grid
LG Energy Solution, a division of the major Korean battery manufacturer, is now producing battery cells for grid-scale energy storage at a site in Holland, Michigan. The company spent $1.4 billion to expand the factory, which previously made electric vehicle batteries. At full capacity, the new lines will produce 16.5 gigawatt-hours of lithium iron phosphate cells per year.
The lithium iron phosphate chemistry, often abbreviated as LFP, has grown increasingly popular for stationary storage and EVs; it offers fire-safety benefits, durability, and lower costs compared to the typical electric vehicle chemistries, at the expense of some energy density. Until now, American battery customers had to turn to China for any LFP supplies. LG’s facility appears to be the largest giga-scale LFP production in the U.S. Japan’s AESC recently launched LFP production at its factory in Smyrna, Tennessee, and Tesla is working to onshore LFP production as well.
GE Appliances To Spend $490 Million Reshoring Production Of Washing Machines From China
Chinese-owned GE Appliances said on Thursday it will spend $490 million to shift production of some washing machines to the U.S. from China as it rebalances its factory footprint amid extreme trade tensions between the world’s two largest economies. The washers will be built at the company’s "Appliance Park" in Louisville, Kentucky, a sprawling complex of factories that serves as its U.S. hub. The company, a division of China’s Haier, said it will add 800 workers after U.S. production begins in early 2027. The Kentucky government will provide up to $113.5 million in tax incentives for the project.
CEO Kevin Nolan said GE Appliances planned to bring the production back to the U.S. before the latest trade friction and tariffs, but the clash sped the process. "There was a lot more urgency to the plan given the current climate," said Nolan, speaking to Reuters. GE Appliances' recent $180 million revamp of its Georgia range factory included moving some production from Mexico. The washer line to be made in Kentucky originated with a product development model GE Appliances started in Louisville before its acquisition by Haier in 2016.
AI Is Doing 30%-50% Of The Work At Salesforce, CEO Marc Benioff Says
Salesforce is accelerating its use of artificial intelligence in automating workloads, according to CEO Marc Benioff. “All of us have to get our head around this idea that AI could do things, that before, we were doing, and we can move on to do higher-value work,” he said in an interview with Bloomberg, noting that the technology currently accounts for about 30% to 50% of the company’s work.
Technology companies are hunting for new ways to trim costs, boost efficiencies and transform their workforce with the help of AI. The aftershocks have already hit the tech industry, with the software giant cutting more than 1,000 positions earlier this year as it restructured around AI. Benioff called the rise of AI in the workforce a “digital labor revolution,” estimating that the software company has reached about 93% accuracy with the technology. “It’s pretty good,” he said, but it’s not “realistic” to hit 100%. He added that other vendors are at “much lower levels because they don’t have as much data and metadata” to build higher accuracy.