Member Briefing May 28, 2025
U.S. Durable Goods Orders Tumble on Lower Aircraft Demand
Durable goods orders fell 6.3% in April amid a drop in civilian aircraft orders (chart). Coming on the heels of a 158% surge in aircraft orders the prior month and amid fairly soft orders data from Boeing, we had been expecting a larger decline than the 51% drop in aircraft that was revealed in today's report. Excluding transportation orders rose a scant 0.2%, a rise that was essentially negated by a downward revision to the prior month's flat reading which now shows up as a 0.2% decline. The upshot is that when you exclude the volatile transport sector, the level of underlying durable goods orders is only slightly lower in April than it was in February.
Despite choppy and broadly negative orders data, equipment spending was actually solid in the first quarter, marking the fastest quarterly pick-up in 14 years outside a one-quarter post-pandemic pop in Q3-2020. But most of the strength stemmed from the fastest quarterly gain in information processing equipment on record, which suggests businesses likely pulled-forward some demand ahead of tariffs. While aircraft continues to drive some strength, spending on computers & related products were the lone-bright spot in April where orders rose 6.5% during the month, and suggest demand here may be more than just tariff-induced.
U.S. Consumer Confidence Jumps Most in Four Years on Trade Truce
Consumer optimism got a much-needed boost in May on hopes for trade pace between the U.S. and China, according to a survey Tuesday. The Conference Board’s Consumer Confidence Index leaped to 98.0, a 12.3-point increase from April and much better than the Dow Jones consensus estimate for 86.0. Much of the positive sentiment, according to board officials, came from developments in the U.S.-China trade impasse, most notably President Donald Trump’s halting of the most severe tariffs on May 12. Other board sentiment indicators also increased.
- The present situation index increased to 135.9, up 4.8 points,
- The expectations index posted a major surge to 72.8, a 17.4 point gain.
- Investors also showed more optimism, with 44% now expecting stocks to be higher over the next 12 months, up 6.4 percentage points from April.
- Views on the labor market also improved, with 19.2% of respondents expecting more jobs to be available in the next six months, compared to 13.9% in April.
- At the same time, 26.6% expect fewer jobs, down from 32.4%.
Manufacturers Could Benefit From 'Big, Beautiful' Bill Depending On What They Make
Advocates for the manufacturing sector have hailed the advancement of President Trump's "big, beautiful bill" as a landmark moment for the sector, but at least two provisions could cut the ebullience for some factory owners, depending on what they produce and their company structure. The dynamic appears particularly acute for green energy manufacturers, as well as for multinational manufacturers with facilities both in the US and elsewhere. Both are set to eat some proverbial spinach alongside the range of goodies clearly on offer in the 1,000-plus-page package.
Overall, the bill has a range of provisions for factory owners, most notably a new plan for 100% expensing for structures that could be felt quickly. This would allow companies to immediately deduct the costs of building new factories and updating existing ones, with the credit currently set to be in force from 2025 through 2028. This provision is set to join other parts of the bill that would reinstitute previous business-world deductions around things like depreciation of property, interest expenses, and research and development costs. The bill also makes the 199A deduction permanent at a new rate of 23%. That deduction — also known as the pass-through deduction — is focused on often smaller businesses organized as S corporations or partnerships.
Global Headlines
Middle East
- Syria And Israel In Direct Talks Focused On Security, Sources Say – Reuters
- Germany Shifts Tone On Israel Over 'Massive Military Strikes' In Gaza - Reuters
- France Lobbying Europeans, UK To Recognize Palestinian Statehood - Politico
- A New Aid System In Gaza Has Started Operations, A US-Backed Group Says - AP
- Palestinians Wary As US-Backed Aid Group Begins Operations In Gaza - Reuters
- Chaos, Looting Mar Start of New Aid Distribution System in Gaza - WSJ
- Iran Threatens Strike on Israel as US Talks Hang in Balance - 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
- Trump Weighs Sanctions Against Russia as Relationship With Putin Sours – WSJ
- Russia’s Struggling War Economy Might Be What Finally Drives Moscow To The Negotiating Table - CNBC
- The U.S. Reinforces Europe’s Northern Front, Fearing War With Russia - WSJ
- Russia Seizes Ukrainian Border Villages As Its Bombing Campaign Slows - AP
- Zelensky Raises Alarm Over New Russian Offensive: 'Ample Evidence' - Newsweek
- Trump Says Putin Is ‘Playing With Fire’ – The Hill
- 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
- NATO’s Rutte Says He Assumes Alliance Will Agree On 5% Spending Target – Reuters
- North Korea Says US 'Golden Dome' Risks 'Space Nuclear War' - BBC
- Why Europe Is Pivoting Back To Nuclear — One Of Its Most Divisive Energy Sources - CNBC
- King Charles Declares Canada ‘True North … Strong And Free’ - Politico
- Global Central Banks Talk Harsh New Economic Realities In Tokyo – Yahoo Finance
- US Aircraft Carrier Returns to South China Sea - Newsweek
- The Case for a Pacific Defense Pact, America Needs a New Asian Alliance to Counter China – Foreign Affairs
- Paris And Berlin Join EU Calls For Crackdown On Hungary Over Pride Ban - Politico
- IOC Keeps Olympic Ban On Russia Ahead Of 2026 Winter Games – The Hill
Policy and Politics
Judge Temporarily Blocks White House From Ending Congestion Pricing
A federal court judge on Tuesday temporarily blocked the Trump administration’s efforts to force New York to end congestion pricing, ensuring the tolling program would remain in place until at least early next month. The move effectively keeps congestion pricing, which charges motorists to enter Manhattan below 60th Street, running through at least June 9 by preventing the Trump administration from withholding funding for New York transportation projects if the program is not halted. President Trump has vowed to kill the toll.
Judge Lewis J. Liman granted the Metropolitan Transportation Authority’s request for a temporary restraining order against the Trump administration after oral arguments from both sides in federal court in Lower Manhattan. Judge Liman said that New York State “would suffer irreparable harm” without a restraining order. He also left open the possibility of issuing a longer-term protective order. Judge Liman noted that the M.T.A. “showed a likelihood of success” in its case to maintain congestion pricing. Despite both sides agreeing to let the case play out in court, Mr. Duffy said last month that his agency would begin withholding federal approvals and funding for a range of transportation projects beginning on May 28.
What Issues To Watch As ‘Big, Beautiful Bill’ Moves To The Senate
House Republicans were jubilant after muscling through President Donald Trump’s “big, beautiful” tax and immigration package by a single vote. But across the Capitol, senators were more cautious. Senate Majority Leader John Thune can afford to lose three Republican senators and still pass the bill, and there are more than that, right now, who have problems with it. Like the House, he will have to balance the concerns from moderate and conservative members of his conference. Republicans’ aspirational deadline is July 4, ahead of a potential debt default.
Several Republican senators have said the House’s multi-trillion-dollar tax package doesn’t have enough savings. Thune said many in his GOP conference favor the tax breaks in the bill but “when it comes to the spending side of the equation, this is a unique moment in time, in history, where we have the House and the Senate and the White House, and an opportunity to do something meaningful about how to control government spending.” Sen. Ron Johnson, R-Wis., a sharp critic of the House bill, wants the United States to go back to pre-pandemic spending levels. He has indicated he would be a no on the bill as it stands now, and he says he has at least three other senators aligned with him.
U.S. Economy Will Be Growing Faster Than 3% This Time Next Year, Predicts Treasury’s Bessent
The Trump administration expects U.S. growth to bounce right back in the coming 12 months after a first-quarter contraction, as the benefits of its economic agenda takes root. In a wide-ranging interview with Bloomberg Television on Friday, Treasury Secretary Scott Bessent predicted the combination of the administration’s pro-growth trade policies, tax cut agenda and deregulation would soon lead to a pickup in activity. During the 2024 campaign, Trump promised to improve the lives of lower and middle income voters in communities left behind by globalization.
“I expect certainly by this time next year we will be north of three [percent growth], and that we will be turning the corner toward the end of the year,” Bessent said. During the first three months of this year, the U.S. economy shrank at an annualised rate of 0.3% as businesses stocked up on imports in advance of punitive tariffs levied by the Trump administration. Pessimism over the global outlook subsequently soared among CEOs polled in April by Fortune and Deloitte. During the interview, Bessent spoke about a number of key economic issues the administration is currently pushing, such as the tax cut package Trump calls the “one big, beautiful bill”.
Political Headlines
- Map: After Harvard, Top 10 Research Institutions Are All in China – Newsweek
- Trump Administration Seeks to Fully End Harvard’s Federal Contracts - WSJ
- TRO Keeps Congestion Pricing Alive In New York City - Politico
- Desantis Slams Congress For Not Acting On DOGE Cuts: ‘Betrayal Of The Voters’ – The Hill
- NPR Sues Trump Over Executive Order Cutting Federal Funding - CNBC
- California Republicans Would Love Kamala Harris To Run For Governor - Politico
- Kristi Noem Meets With Israeli Officials In Jerusalem After Embassy Killings – The Hill
- Trump Team Pauses New Student Visa Interviews As It Weighs Expanding Social Media Vetting - Politico
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
CDC Ends COVID Shot Recommendation For Healthy Children, Pregnant Women
The Centers for Disease Control and Prevention will no longer recommend routine COVID-19 shots for healthy children and pregnant women, Health and Human Services Secretary Robert F. Kennedy Jr. announced in a Tuesday morning post on X. “Last year, the Biden administration urged healthy children to get yet another COVID shot, despite the lack of any clinical data to support the repeat booster strategy in children,” Kennedy said in a video.
The coronavirus has killed more than 1 million people in the past five years, and annual shots have served as a dose of protection. Yet fewer and fewer people have been getting them, and top administration officials argue there’s no benefit and even potential harm to individuals. During his confirmation hearings, Kennedy assured lawmakers that he would not take away anyone’s vaccines. But removing the vaccine from CDC’s recommended list will have a similar impact. Axing the shot from the CDC’s list of routine vaccines will make it much more difficult for people who want the shot to get it. Insurance companies will no longer have to cover it, and government programs like Medicaid won’t either.
Industry News
Trade War Updates
- Trump's Tariff Revenue Has Already Topped $22 Billion In May - Yahoo
- US and EU Race for Trade Deal With Six Weeks Left Until Truce Expires – YahooFinance
- Ahead Of Trade Talks, Brussels Seeks Detail On Companies' US Spending - Reuters
- China’s Industrial Profits Grow In April Despite US Trade War - SCMP
- Trump Advisor Hassett Says ‘We Don’t Want To Harm’ Apple With Iphone Tariffs - CNBC
- US iPhone Imports From India Soar as Trump Threatens 25% Tariff on Apple - Newsweek
- Mexico Sees USMCA Review Starting In Late September Or Early October – Reuters
Experts Advise Manufacturers To ‘Keep It Calm, Keep It Cool’ As Tariffs Drive Uncertainty
As manufacturers navigate tariff uncertainty, experts on a panel at the Medical Design & Manufacturing East expo in New York City on May 22 said it’s important to keep a level head and make rational decisions about business operations and relationships. Global makers of drugs, microchips, cars and more have responded to the Trump administration’s trade policy with pledges to invest or relocate their production to the United States to avoid higher taxes on goods and services. However, the panelists said not everyone should make the same move.
Shay Luo, a partner at management consulting firm Kearney, said companies should consider factors like demand, location and cost before upheaving or expanding their production. “We have to keep reminding people, like, be rational. Do not be emotional on this topic,” Luo said. A common factor among companies who successfully make the transition is that they work with their existing suppliers rather than pivot to others, Luo said. “You will be surprised how many of your suppliers based out of Asia are willing to work together with you to establish another factory or production line in Mexico or in the U.S.,” she said.
Read more at Manufacturing Dive
Global Steel Tonnage Falling Again. US Production Unimpacted by Tariffs So Far
Global steel production dropped to 155.7 million metric tons to start Q2 2025, down -6.7% from March to April. Still, the new total is nearly even with the April 2024 (-0.3%) result, and the year-to-date (January-April 2025) is likewise on par (-0.4%) with the comparable figure for last year. Steel production worldwide continues to face weak demand, and steelmakers in most industrialized regions continue to restrain any surplus tonnage that may weaken prices, continuing a multi-year trend. In each of the top 10 steelmaking countries reporting to the World Steel Assn., the results for April were flat or lower than March 2025, and mostly lower than the April 2024 totals.
The month-to-month decline recorded for April is mainly the effect of markedly lower output reported for China. With 86.0 million metric tons posted for the latest month, China’s raw-steel tonnage dropped -7.9% from March and was merely even with the April 2024 total. Indian raw-steel production also dropped from March to April, down -7.0% to 12.9 million metric tons. Japanese steelmakers produced 6.6 million metric tons of raw steel during April, or -9.1% less than in March and -6.4% less than in April 2024. In the U.S., April raw-steel production showed no effect of the 25% tariff on imported steel products implemented in March – instead falling to 6.6 million metric tons. The new U.S. monthly total is down -1.5% versus the March figure and barely even (-0.3%) with the April 2024 total. With 26.4 million metric tons (29.1 million short tons) produced from January through April, there is no change from last year’s four-month total.
Read more at American Machinist
GM, LG Energy Target Commercializing Manganese-Rich Batteries For Evs
Battery engineers at General Motors and its joint venture partner LG Energy Solution have developed an improved lithium manganese-rich (LMR) prismatic battery cell design for the company’s future electric vehicles, the automaker announced in a May 13 press release. The LRM battery chemistry uses a higher percentage of lower-cost manganese to replace Cobalt, a critical raw material for EV batteries, making them less costly to produce while still delivering high energy density.
GM aims to be the first major automaker to deploy LMR batteries in EVs. Its Ultium Cells joint venture with LG Energy plans to start commercial production of the battery cells in the U.S. by 2028 for full-size electric trucks and SUVs. GM’s current EV models use nickel manganese cobalt aluminum oxide (NMCA) batteries, which contributes to improving driving range, but are costlier manufacture. LRM battery chemistry, on the other hand, can help GM make its future EVs more affordable. A high nickel battery cell typically consists of roughly 85% nickel, 10% manganese and 5% cobalt, according to GM. But LMR cells contain around 35% nickel, 65% manganese, and “virtually no cobalt,” which can significantly reduce costs.
Gilead Sciences Invests $11B To Expand Pharmaceutical Manufacturing And R&D Facilities In The United States
Gilead Sciences has announced plans to expand its manufacturing and research capabilities across the United States. The company, which develops and produces medicines, is investing $11 billion into capital and operational projects, creating around 800 new direct jobs and supporting more than 2,200 indirect jobs by 2028.
The investment will support the construction of three new facilities and upgrades to three existing sites, focused on boosting U.S. manufacturing and research and development capacity. Of the total investment, $4 billion will be allocated to capital projects such as laboratories and equipment, $5 billion will fund technology, operations, and R&D activities, and $2 billion will support digital and advanced engineering efforts. These developments are part of Gilead’s broader plan to invest $32 billion in U.S. manufacturing and R&D through 2030, which is projected to generate $43 billion in value to the U.S. economy over five years.
Japan’s Nippon Expected To Close Acquisition Of U.S. Steel At $55 Per Share, Sources Say
Japan’s Nippon Steel is expected to close its acquisition of U.S. Steel for $55 per share, sources familiar with the matter told CNBC’s David Faber. President Donald Trump cleared Nippon’s bid for U.S. Steel on Friday, referring to the deal as a “partnership.” Trump said Nippon will invest $14 billion over the next 14 months. U.S. Steel’s headquarters will remain in Pittsburgh, the president said. The $55 per share bid for U.S. Steel is the offer that Nippon originally made for the company before the deal was blocked in January.
The $14 billion that Nippon will invest includes $2.4 billion that will go to U.S. Steel’s operations at Mon Valley outside Pittsburgh, McCormick said. The deal will save 10,000 jobs in Pennsylvania and add another 10,000 jobs in the building trades to add another arc furnace, the senator said. When asked what Nippon gets from the deal, McCormick said the Japanese steelmaker will “have certainly members of the board and this will be part of their overall corporate structure.”
Chinese-Owned Volvo Cars To Cut 3,000 Jobs
Sweden-based car maker Volvo Cars says it will cut around 3,000 jobs as part of its cost-cutting measures. The firm says the layoffs will mainly impact office-based positions in Sweden, representing about 15% of its white collar workforce. Last month, Volvo Cars, which is owned by Chinese group Geely Holding, announced an 18 billion Swedish kronor ($1.9bn; £1.4bn) "action plan" shake-up of the business. The chief executive of Volvo Cars, Håkan Samuelsson, pointed to the "challenging period" faced by the industry as a reason for the layoffs.
Earlier this month, the firm said its global sales for April fell by 11% compared to the same period last year. Volvo Cars has its main headquarters and development offices in Gothenburg, Sweden. It has major production plants in Sweden, Belgium, China and the US. The company was sold by US motor industry giant Ford to China's Geely in 2010. In 2021, Volvo said all of its cars would go electric by 2030. Last year it scaled back that ambition due to a number of issues including "additional uncertainties created by recent tariffs on EVs in various markets".
Pratt & Whitney Machinists End 3-Week Strike After Approving A New Contract
About 3,000 machinists at jet engine-maker Pratt & Whitney in Connecticut approved a new four-year contract Tuesday, ending a three-week strike over wages, job security and other issues. Union members were expected to return to work Wednesday after 74% of them voted in favor of the new deal, according to locals 1746 and 700 of the International Association of Machinists and Aerospace Workers.
About 3,000 machinists at jet engine-maker Pratt & Whitney in Connecticut approved a new four-year contract Tuesday, ending a three-week strike over wages, job security and other issues. Union members were expected to return to work Wednesday after 74% of them voted in favor of the new deal, according to locals 1746 and 700 of the International Association of Machinists and Aerospace Workers. The company said in a statement that the contract “recognizes the skill and dedication of our workforce by keeping them among the highest compensated in their field, while ensuring the company is well-positioned for the future.”
Oklo Inks Deal With South Korean Nuclear Giant For Global Push
Oklo Inc. on Tuesday announced that it has inked a memorandum of understanding (MOU) with South Korean Nuclear Giant Korea Hydro & Nuclear Power (KHNP). The agreement sets the stage for joint efforts to advance and deploy Oklo’s nuclear technology worldwide. As per the deal, KHNP and Oklo will collaborate to advance the standard design and verification of Oklo’s Aurora powerhouse. The partnership will also focus on early-stage project development, including manufacturability assessments, major equipment planning, supply chain development for the balance of plant systems, and construction planning.
Notably, Oklo plans to deploy its 75 MWe Aurora reactor at the Idaho National Laboratory and is currently in the licensing process. The company is working with the U.S. Nuclear Regulatory Commission through a Pre-Application Readiness Assessment and plans to submit a Combined License Application (COLA) later this year. Oklo also plans to file additional applications to support a growing pipeline of over 14 GW in customer demand.