Member Briefing June 9, 2025
U.S. Manufacturing Productivity Jumps 4.4% in Q1
Labor productivity in the manufacturing sector rose by 4.4% during the first quarter, the most significant increase in nearly four years, with output rising 4.8% and hours worked inching upward by 0.4%, according to Labor Department data. Durable manufacturing productivity jumped 7.2% behind a 7.9% surge in output, while nondurable manufacturing productivity rose 1.7%. However, unit labor costs in the sector increased by 2%.
Broader U.S. worker productivity dropped at a faster pace than initially thought in the first quarter, driving labor costs sharply higher at a time when businesses are already facing rising costs from tariffs on imported goods. Nonfarm productivity, which measures hourly output per worker, decreased at a 1.5% annualized rate last quarter, the Labor Department's Bureau of Labor Statistics said last Thursday. The much bigger than previously estimated decrease by productivity, a measure of output per hour, largely reflected a much bigger than previously estimated increase by hours worked.
U.S. Trade Deficit Narrows Sharply Amid Unwinding of Temporary Import Surge
The U.S. trade deficit narrowed sharply in April, with imports decreasing by the most on record as the front-running of goods ahead of tariffs ebbed, which could provide a lift to economic growth this quarter. A rush to beat import duties helped to widen the trade deficit in the first quarter, which accounted for a large part of the 0.2% annualized rate of decline in gross domestic product last quarter. The contraction in the deficit, at face value, suggests that trade could significantly add to GDP this quarter, but much would depend on the state of inventories.
The trade gap contracted by a record 55.5% to $61.6 billion, the lowest level since September 2023, the Commerce Department's Bureau of Economic Analysis said on Thursday. Data for March was revised to show the trade deficit having widened to an all-time high of $138.3 billion rather than the previously reported $140.5 billion. Imports decreased by a record 16.3% to $351.0 billion in April. Goods imports slumped by a record 19.9% to $277.9 billion. They were held down by a $33.0 billion decline in imports of consumer goods, mostly pharmaceutical preparations from Ireland. Imports of cellphones and other household goods fell $3.5 billion. Exports rose 3.0% to $289.4 billion, an all-time high. Goods exports increased 3.4% to a record $190.5 billion. They were boosted by a $10.4 billion jump in industrial supplies and materials, mostly finished metal shapes, non-monetary gold and crude oil.
U.S. Payrolls Increased 139,000 In May, More Than Expected; Unemployment At 4.2%
Hiring decreased just slightly in May even as consumers and companies braced against tariffs and a potentially slowing economy, the Bureau of Labor Statistics reported Friday. Nonfarm payrolls rose 139,000 for the month, above the muted Dow Jones estimate for 125,000 and a bit below the downwardly revised 147,000 that the U.S. economy added in April. The unemployment rate held steady at 4.2%. A more encompassing measure that includes discouraged workers and the underemployed also was unchanged, holding at 7.8%. Worker pay grew more than expected, with average hourly earnings up 0.4% during the month and 3.9% from a year ago, compared with respective forecasts for 0.3% and 3.7%.
The May jobs report was on the softer side, but it was more of a caution sign than a flashing red light in our view. Nonfarm payrolls increased by 139K in May, 13K better than the consensus forecast was expecting, but a combined -95K downward revision to job growth in April and March overshadowed the beat. The industry composition of employment growth pointed to resilience in health care but weakness in more cyclically-sensitive industries like manufacturing, trade and temporary employment.
Global Headlines
Middle East
- Gaza-Bound Activist Boat With Greta Thunberg Intercepted, Boarded by Israel – WSJ
- IAEA's Grossi: Iran's Nuclear Facilities Buried Too Deep Underground To Be Hit By 'Surgical Strike' - I24
- Overcrowding Forces Halt To Gaza Aid Distribution, Eid Holiday Marked By Violence - Reuters
- US Vetoes UN Security Council Resolution Demanding An Immediate Gaza Ceasefire - AP
- Netanyahu Admits Israel Backing Anti-Hamas Group in Gaza – France 24
- A Family’s Decadelong Search for Children Stolen by Assad’s Regime - WSJ
- Israeli Military Recovers Body Of Elusive Hamas Leader Mohammed Sinwar - CNN
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Putin Unleashes A Summer Offensive To Break Ukraine - CNN
- Russia Cuts Interest Rates to 20% From Two-Decade High As Economy Slows – France 24
- Russia’s Opposition Talking With Ukraine Behind The Scenes, Top Dissident Says – Politico
- Russian Missile And Drone Attacks Across Ukraine Kill 4, Injure Around 50 - AP
- Russia Strikes Ukraine in Retaliation for Covert Drone Operation - WSJ
- Zelensky Looking To Meet With Trump At G7 – The Hill
- Just How Much Damage Did Ukraine Do In Its 'Spiderweb' Drone Attack On Russia? - NBC
- Russia Awaits Ukraine’s Confirmation On A Planned Exchange Of Dead Fighters, Officials Say - AP
- 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
- Colombian Senator And Presidential Hopeful Shot In Assassination Attempt - CBS
- Honouring the Legacy: D-Day’s Enduring Story in 2025 – History Hit
- Dutch Snap Election Set For Oct. 29 - Politico
- NATO Is On The Cusp Of Accepting Trump’s 5% Defense Investment Demand, Rutte Says - AP
- After Trump Meeting, Merz Says He Has ‘No Doubt’ US Remains Committed To NATO - Politico
- Mystery Balloons Near Kim Jong Un’s Capsized Warship Puzzle Experts - WSJ
- Hundreds of Cholera Cases Are Declared Per Day in Sudan – Inter Press Agency
- Japan Turns To Thai And Vietnamese Rice As Prices Soar – Nikkei Asia
- South Koreans Have a New President, and Mixed Emotions – NYT
Policy and Politics
What to Know About the Los Angeles Protests and Trump’s Response
Members of the National Guard began deploying in Los Angeles on Sunday following two days of clashes between protesters and federal officers, including Immigration and Customs Enforcement agents. Here’s what to know:
The Trump administration said it is sending at least 2,000 National Guard troops to Los Angeles, calling California Gov. Gavin Newsom and Los Angeles Mayor Karen Bass “incompetent. ” Newsom called the president’s move “purposefully inflammatory” and Bass said she is working closely with law enforcement to “find the best path forward.”
The National Guard forces were deployed under the orders of the federal government, known as Title 10 authority, a U.S. Northern Command spokesman told The Wall Street Journal on Sunday.
The first protests began Friday in Los Angeles, when residents reacted to federal agents engaged in what appeared to be an immigration enforcement operation. Federal agents were seen in at least two locations in the city. As word spread, more people showed up and the protests grew and lasted into the night.
On Saturday, residents of Paramount, a city within Los Angeles County about 16 miles south of the downtown area, saw federal agents gathering in an industrial park. The residents began trying to block the streets nearby. The protest turned into a standoff between federal agents and approximately 300 people, according to the mayor. It lasted most of the day.
There were widespread reports of verbal harassment of federal agents, with protesters yelling and shouting for them to leave their communities. The protests drew responses from local law enforcement. In some instances, tear gas and flash bangs were used in an attempt to disperse or control the crowds. Some protesters launched fireworks in response. At least one protester was injured Friday. There were no immediate reports of injuries on Saturday.
In Los Angeles, ICE claimed it made 118 arrests last week, including five alleged gang members and other immigrants with criminal histories.
After Delgado Announcement County Democratic Party Chairs Go In For Hochul
The support for Gov. Kathy Hochul is continuing to roll in following the announcement by her lieutenant governor that he will challenge her in next year’s Democratic gubernatorial primary. In a letter shared exclusively with City & State, the vast majority of county Democratic committee chairs offered their endorsement of Hochul over Lt. Gov. Antonio Delgado. The chairs of 49 of the 62 county Democratic parties signed onto the letter led by state Democratic Party Chair Jay Jacobs.
The chairs made clear in the letter that they are endorsing in their personal capacities rather than speaking officially on behalf of their committees, but the support is still significant and signals that Hochul will easily win the state party’s endorsement next year. “In these consequential times, we felt it incumbent upon us as party leaders to leave no uncertainty as to where our support lies in the 2026 gubernatorial race,” the letter reads. A majority of the county chairs from Delgado’s old congressional district signed the letter. The chairs from Columbia, Sullivan, Ulster, Broome, Dutchess, Montgomery and Rensselaer counties all gave their backing to Hochul.
Hochul Paused Carbon Pricing to Get More Feedback — But Hasn’t Asked for Any
When Governor Kathy Hochul abruptly hit the brakes in January on a sweeping program to price pollution, she said the state needed more time to “get it right.” Holding off on the cap and invest program would allow “more space and time for public transparency,” her 2025 agenda briefing book promised. Climate advocates who had discussed details of cap and invest with state officials late last year told New York Focus they haven’t heard anything from the administration since then about the core parts of the program.
DEC is focused on a narrower component of it: creating rules for how companies would be required to report their greenhouse gas emissions. The agency published a draft version in late March, and held hearings on those rules this week, as part of a mandatory public review process — marking the state’s first public forum on cap and invest since Hochul’s about-face in January. the centerpiece of the program — an auction system requiring companies to pay for the right to pollute — remains on hold. (Cap and invest, as proposed over the last two years, hinged on three pieces of regulation: the reporting rule, as well as one to determine which emissions polluters to charge and another to structure how the auctions should run.)
Political Headlines
- Supreme Court Allows DOGE To Access Social Security Data – CNN
- Trump To Deploy National Guard In Response To Los Angeles Immigration Protests -CNBC
- Abrego Garcia Returns to U.S. After Mistaken Deportation. Here’s What’s Next. - WSJ
- Trump, White House Aides Signal A Possible Détente With Musk - Politico
- GOP Downplays Trump-Musk Feud’s Impact On Midterms – The Hill
- Andrew Yang Is Ready to Team Up With Elon Musk - Politico
- US Sanctions Four International Criminal Court Judges – The Hill
- Congress Has Until July 18 To Act On Trump’s Request To Claw Back $9.4B - Politico
- Students As Spies? US-China Educational Ties Strained By Rising Claims Of Espionage - SCMP
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
Employers to Maintain or Expand Well-Being Programs Despite Economy
Soaring health care costs, an uncertain global economy and other world events won't disrupt employers who remain committed to investing in well-being for the coming year, according to Business Group on Health’s 2025 Employer Well-being Strategy Survey. A strong majority, 93%, have reported plans to maintain or even expand well-being offerings for 2025, with 73% maintaining these programs and 20% increasing them. Other survey findings:
- One hundred percent of employers include mental health in their well-being strategy, according to the survey. In addition, 47% of employers consider mental health as the most important well-being dimension, while another 44% consider it to be the second most important.
- Physical health is a top well-being priority for employers, especially for weight management. Almost two-thirds of employers reported that the growing utilization of GLP-1s had impacted their approach to well-being, by making changes to their well-being offerings or increasing vendor accountability.
- Financial health programs are nearly ubiquitous among employer strategies. Ninety-two percent of employers include financial health as a dimension of well-being strategy in 2025, with 100% of employers projected to include it for 2026.
- Well-being strategies include social connectedness and community, for three-quarters of employees, through initiatives such as employee resource groups (ERGs) and peer coaching or mentoring.
Industry News
Trade War Updates
- Trump's Top Economic Officials To Meet With China Counterparts In London Next Week - SCMP
- New Disputes Emerge Ahead Of US-China Trade Talks In London - AP
- Renegotiating USMCA May Boost North American Trade - Freightwaves
- Lowe’s To Maintain Competitive Pricing Structure Despite Tariffs – Supply Chain Dive
- Think Splitting a Check is Tough? Try Splitting a Tariff - WSJ
- US Declines To Label China A Currency Manipulator, But Blasts Its Transparency Policies - AP
- China's E-Commerce Sellers Say Trump's Tariffs Have Been A 'Rollercoaster' Ride - Marketplace
- Trump’s Tariffs: Tracking The Status Of International Trade Actions –Supply Chain Dive
Trump Wants To Bring Manufacturing Jobs Back. The Aviation Industry Can’t Hire Fast Enough
The average age of a certified aircraft mechanic in the U.S. is 54, and 40% of them are over the age of 60, according to a joint 2024 report from the Aviation Technician Education Council and consulting firm Oliver Wyman, which cites Federal Aviation Administration data. The U.S. will be short 25,000 aircraft technicians by 2028, according to the report. “A lot of them were hired on in the ’80s and early ’90s. You just start doing some math and you start saying at some point they’re going to retire,” said American Airlines Chief Operating Officer David Seymour, who oversees the carrier’s more than 6,000 daily flights.
To boost their ranks, airlines and big manufacturers of airplanes and their thousands of components are trying to get more younger people interested in the field. Wages for technicians that repair aircraft at airlines, as well as big manufacturers like Boeing, have gone up in recent years, with skilled workers still in short supply and travel and airplane demand robust. But some workers said that’s not enough. “We need to increase wages,” said Sarah MacLeod, executive director of the Aeronautical Repair Station Association. Most of the companies the association works with are small businesses. She warned that the “entire world is going to feel this workforce shortage.
Check out Dutchess Community College’s Aviation Programs
Commercial Aerospace Industry Contributes $545.2B To Economy
The U.S. commercial aerospace industry contributed $545.2 billion in total economic output, including $306.9 billion in aerospace products, according to a recently report commissioned by the Aerospace Industries Association. The report highlights the industry’s impact on the national economy and its role in innovation, employment and trade. Other findings include:
- The industry contributed $151.1 billion directly to the national gross domestic product. When indirect contributions are counted, it totaled $284.1 billion.
- The industry supported 1.6 million jobs with 545,400 in aerospace. Aerospace workers earned $79.5 billion in wages, and the industry supported $157.2 billion in labor income.
- The industry contributed $54 billion in taxes, and invested $34.5 billion in research and development, $8.4 billion in expanded production capacity and $2.9 billion in infrastructure.
- Aerospace products and parts were the only manufacturing sector to maintain a trade balance.
Read more at Transportation Today
US FAA Not Currently Considering Lifting Boeing 737 MAX Production Cap
The acting head of the Federal Aviation Administration said he is not currently considering lifting a production cap of 38 planes per month on Boeing's 737 MAX imposed after a January 2024 mid-air emergency involving a new Alaska Airlines Boeing plane missing four key bolts. Boeing CEO Kelly Ortberg said last week the planemaker is "pretty confident" that it can increase production of its best-selling 737 MAX jets to 42 a month.
After the FAA approves Boeing increasing output to 42 a month, "we do have subsequent rate increases in our plan," which will typically be in increments of five aircraft a month and at least six months apart, he said. The FAA limited Boeing’s ability to make more than 38 737 MAX planes a month following the 2024 emergency landing, which raised questions about the company’s production standards, especially after it was revealed that four bolts meant to secure the door plug were missing. Production of the company’s bestselling airplane have been fluctuating between the teens and low thirties per month in the aftermath of the incident.
Westinghouse Pursues U.S. Nuclear Expansion After Trump Orders
Nuclear equipment supplier Westinghouse is in talks with U.S. officials and industry partners about deploying 10 large reactors, in response to presidential executive orders, the Financial Times reported on Sunday, citing the company’s CEO. President Donald Trump’s executive orders, which were published on May 23, directed the government to cut down on regulations and fast-track licences for reactors and power plants to shrink a multi-year process to 18 months.
Dan Sumner, Westinghouse’s interim chief executive, told the FT that the company was “uniquely positioned” to deliver the president’s agenda because it had an approved reactor design, a viable supply chain, and recent experience of building two of its AP1000 reactors in Georgia. “There is active engagement with the administration, including key points of interface with the loan programs office, recognizing the importance of financing to the deployment of the model,” he told the FT.
NFIB: Main Street Labor Market Weakened In May
NFIB’s May jobs report found that 34% (seasonally adjusted) of small business owners reported job openings they could not fill in May, unchanged from April, and the lowest since January 2021. Overall, 55% of small business owners reported hiring or trying to hire in May, down one point from April. Forty-eight percent (86% of those hiring or trying to hire) of owners reported few or no qualified applicants for the positions they were trying to fill. Twenty-nine percent of owners reported few qualified applicants for their open positions and 19% reported none.
Thirty percent have openings for skilled workers (up one point) and 13% have openings for unskilled labor (unchanged for the fourth consecutive month). Job openings were the highest in the construction, transportation, and manufacturing sectors, and the lowest in the wholesale and professional services industries. The percent of job openings in all industries except for wholesale have decreased from last year. The percent of small business owners reporting labor quality as their top operating problem fell three points from April to 16%.
Procter & Gamble To Cut 7,000 Jobs As Part Of Broader Restructuring
Procter & Gamble will cut 7,000 jobs, or roughly 15% of its non-manufacturing workforce, as part of a two-year restructuring program. The layoffs by the consumer goods giant come as President Donald Trump’s tariffs have led a range of companies to hike prices to offset higher costs. P&G CFO Andre Schulten announced the job cuts during a presentation at the Deutsche Bank Consumer Conference on Thursday morning. The company employs 108,000 people worldwide. P&G faces slowing growth in the U.S., the company’s largest market. In its fiscal third quarter, North American organic sales rose just 1%.
P&G, which owns Pampers, Tide and Swiffer, is planning a broader effort to reevaluate its portfolio, restructure its supply chain and slim down its corporate organization. Schulten said investors can expect more details, like specific brand and market exits, on the company’s fiscal fourth-quarter earnings call in July. P&G is projecting that it will incur non-core costs of $1 billion to $1.6 billion before taxes due to the reorganization.
Siemens Energy and Eaton Announce Collaboration to Accelerate Data Center Development
Eaton and Siemens Energy will collaborate to enable the construction of data centers with integrated onsite power. The companies will provide standardized modular systems and grid-independent energy supplies to fast-track data center deployment. The joint initiative aims to meet data center needs as demand for cloud computing and AI continues to grow. The collaboration “targets one of the most urgent bottlenecks in the global data center buildout: energy availability,” reports Data Center Frontier. “In an era when artificial intelligence models are driving exponential compute requirements … traditional timelines for grid interconnection are falling dangerously out of sync with digital infrastructure timelines.”
At the heart of the Eaton–Siemens Energy solution is a modular power architecture designed to decouple data center construction from grid delays. Siemens Energy’s baseline configuration features a 500 MW onsite power plant built around the company’s high-efficiency SGT-800 gas turbines, supported by redundancy, battery storage, and options for future hydrogen integration. This configuration supports a range of deployment scenarios—particularly in regions where power infrastructure lags behind land availability.
Read more at Data Center Frontier
AI Chipmaker Broadcom Beats On Earnings And Revenue
Broadcom reported second-quarter earnings on Thursday that beat Wall Street expectations, and the chipmaker provided robust guidance for the current period. Earnings per share were $1.58 adjusted and revenue was $15 billion. Broadcom said it expects about $15.8 billion in third-quarter revenue, versus $15.7 billion expected by Wall Street analysts. Revenue in the latest quarter rose 20% on an annual basis.
The company said net income increased to $4.97 billion, or $1.03 per share, from $2.12 billion, or 44 cents per share, in the year-ago period. The company instituted a 10-for-1 stock split a year ago. In March, Broadcom CEO Hock Tan said it was developing AI chips with three large cloud customers. Tan said in a statement that Broadcom expects $5.1 billion in AI chip sales in the third quarter, adding that the company’s “hyperscale partners continue to invest.” He said he expected the company’s AI growth to continue through fiscal 2026. Hyperscalers are companies that build out large cloud systems to rent out to their own customers. They include Amazon, Google and Microsoft.
Happy Centennial to the Goodyear Blimp
The Goodyear Tire & Rubber Company already celebrated its 100th anniversary a quarter century ago: Now, it’s the blimp’s turn. On June 3, the Goodyear Blimp celebrated its 100th birthday at its hangar in Suffield, Ohio, outside of Akron, by hosting a variety of corporate and local athletic mascots.
Goodyear’s Aeronautics department was founded in 1910, and its first balloon was produced two years later, but the Pilgrim, its first “helium-filled non-rigid airship,” was first introduced in 1925: Its maiden flight was June 3, 1925. During World War II, the tire company hosted a pilot training program to train U.S. Navy airship pilots: According to the U.S. Naval Institute, blimps were used during the war as coastal escorts, mine spotters, and search-and-rescue craft.