OIL WATCH
Higher Oil Prices Magnifying the Ongoing Stagflation Shock
According to the Fed’s model of the US economy, a sustained $10 increase in oil prices is expected to increase inflation by 0.4% and lower GDP by 0.4%.
Tariffs also increase inflation and lower GDP growth.
Restrictions on immigration also increase wage inflation and lower employment growth.
In short, higher oil prices exacerbate the ongoing stagflation shock stemming from tariffs and immigration restrictions.
Stagflation is a problem for the FOMC when they meet next week. Higher inflation says the Fed should be hiking. Lower GDP growth says the Fed should cutting. So will the FOMC next week put more weight on the upward pressure on inflation or more weight on the coming slowdown in growth? (WSJ)
Ed Yardeni:
The latest war in the Middle East means that investors are facing a host of known unkowns. How long will the war last? Not long if Israel continues to knock out Iran’s military assets. Crippling strikes against Iran’s nuclear facilities haven’t occurred yet. But Iranians living near these sites have been warned by the Israelis to run for the hills to avoid radiation released when the sites are bombed.
Will the price of oil continue to soar, resulting in a global recession and another worldwide spike in inflation? Previous spikes have been associated with recessions in the US (chart). If Iran shuts the Strait of Hormuz, the price could soar, but there would likely be a swift response by the US and our allies to reopen the Strait by obliterating Iran’s naval forces.
The Israelis have destroyed the proxies that Iran had established in Gaza, Lebanon, and Syria. So instead of facing a multi-front war, the Israelis have been able to throw their massive military resources (directed by remarkably precise military intelligence) at the Mullahs, who might be toppled from power.
Port of LA Imports Drop 19% in May as Tariffs Hit US Businesses
(…) “We’ve already blown past summer fashion and looking forward now to back to school and Halloween before the all important year-end holidays,” Seroka said. “Cargo for those micro seasons needs to be here on the ground right now. I don’t necessarily see that in inventory levels.” (…)
In May, cargo handlers at the Port of Los Angeles processed a total of about 717,000 equivalent units, or TEUs. About 356,000 of those were imports, a 19% drop compared to last month and 9% lower than May 2024, Seroka said.
Exports through Los Angeles fell to just over 120,000 containers, marking the sixth straight month of year-on-year declines as other countries responded with retaliatory tariffs, particularly for US agricultural goods, Seroka said. (…)
Despite the canceled and delayed orders, importers still paid a record $23 billion in customs duties in May, US Treasury data released this week showed.
That translates to an average effective tariff rate of roughly 7.5% to 8%, up from 2.5% at the beginning of the year, according to Ernie Tedeschi, director of economics at Yale University’s Budget Lab and a former Biden administration official.
And there’s still a ways to go before all of the tariffs announced by the Trump administration are implemented, Tedeschi said at the Port of Los Angeles briefing. “We estimate that current policy is equivalent to a 15.5% average effective tariff rate, including the new announcements for 2025 and the levels prior to them.”
But:
China’s total exports slid modestly month-over-month in May. Underneath the relatively stable topline, the significant divergence continued.
Exports to the US (measured in USD value terms) dropped another 17% sequentially in May after a 20% decline in April. On the other hand, exports to EU, Japan and Africa gained. The past two months’ data highlighted the difficulty for bilateral tariffs to meaningfully reduce total Chinese exports. (Goldman Sachs)
China-US Deal Didn’t Address Some Rare Earths Controls: Reuters
The trade agreement reached by US and China in London left export restrictions tied to national security unresolved, Reuters reported, citing two people familiar with the matter.
Beijing hasn’t committed to granting export clearance for certain rare-earth magnets needed by US military suppliers in fighter jets and missile systems, according to the report.
US officials also signaled they may seek to extend existing tariffs on China for a further 90 days beyond an Aug. 10 deadline agreed during previous talks in Geneva, Reuters cited the people familiar as saying.
Taiwan Imposes Technology Export Controls on Huawei, SMIC
Taiwan’s International Trade Administration has included Huawei, SMIC and several of their subsidiaries in an update of its so-called strategic high-tech commodities entity list, according to the latest version that was made available on its website on Saturday. (…)
The new restrictions imposed by Taipei are likely to at least partially cut off Huawei and SMIC’s access to Taiwan’s plant construction technologies, materials and equipment essential to build AI semiconductors, like those made by Taiwan Semiconductor Manufacturing Co. for the likes of Nvidia Corp.
In Huawei’s case, several of its overseas units including in Japan, Russia and Germany were also captured in the update to Taiwan’s entity list. Both Huawei and SMIC — and some of their subsidiaries — are also on the US entity list, which has significantly limited the companies’s ability to acquire foreign technology. (…)
While Taiwan has for years imposed certain blanket bans on the shipments of critical chipmaking equipment including lithography machines to China, it hasn’t included leading Chinese tech companies or chipmakers on its entity list previously. TSMC, the go-to chipmaker for Apple Inc. and Nvidia, cut off its supplies to Huawei in 2020 because of US export controls.
Huawei, together with SMIC, shocked American politicians in 2023 by releasing an advanced, made-in-China 7-nanometer chip. While the two are struggling to improve their technologies due to various curbs, they are still China’s best hope to help fill in the AI chip gap left by a lack of Nvidia’s most sophisticated semiconductors. (…)
CONSUMER WATCH
American travel demand declines as US consumers cut costs Travellers pare back holiday plans amid economic uncertainty
Fewer passengers travelled through US airports in the past 90 days than in the same period last year, as air traffic declined for the first time since the height of the Covid-19 pandemic, according to analysis of figures from the Transportation Security Administration by TS Lombard.
Prices for airline tickets and hotel accommodation also dropped on a seasonally adjusted basis between April and May, according to figures published by the Bureau of Labor Statistics on Wednesday. Operators said it had been increasingly difficult to fill rooms, as President Donald Trump’s trade war stokes fears of inflation and unemployment.
“The uncertainty in the environment is creating cautionary behaviours from guests,” Joan Bottarini, chief financial officer at hotel group Hyatt, told an investor conference last week in New York.
US consumers across all income levels cut their spending on lodging and airlines in the year to May, compared with the same period in 2024, according to an analysis of credit and debit card spending by Bank of America. The decline is a further blow to the US tourism industry, which is reeling from sharp drops in visitors from Canada and Europe amid political and economic tensions and some tourists experiencing hostile treatment at the US border.
Canadian air travel to the US fell almost a quarter in May compared with the same month in 2024, according to Statistics Canada. There were also more than 7 per cent fewer arrivals from France and Germany, the two largest US tourism markets in mainland Europe, in the year to April, according to the International Trade Administration.
The biggest pullback on travel spending was among lower-income households, according to Bank of America. Wealthier consumers only marginally reduced their spending, meaning that luxury hotels were mostly insulated from the slowdown. “The higher end is still actually prioritising travel and experiences and it’s showing up in our numbers,” said Hyatt’s Bottarini.
Selling available rooms was “definitely more difficult” for “lower end” accommodation providers, added Ewout Steenbergen, executive vice-president and chief financial officer at Booking Holdings, the owner of travel agencies Booking.com, Kayak and Agoda. He said company data showed both “shorter stays” and more last-minute bookings in the US.
As reservations come in later and later, many hotels and campsites, which typically adjust their fees in line with demand, have been “unable to command the price increases they’d like”, according to Adam Sacks, president of research group Tourism Economics. Sacks said the tourism industry’s slowdown was the result of low- and middle-income Americans choosing cheaper options, such as road trips, rather than cancelling their vacations altogether.
“Travel remains a priority for households but they’re trading down. They’re still taking a trip but it’s just closer to home or its shorter.” Jaime Chandra’s short-term rental property in the countryside near Durham, North Carolina, has been unusually quiet so far this year — even after she reduced her prices and cut the minimum booking duration from three nights to two.
“Normally by March we’d already have most of the summer weekends booked, but by that point this year we had next to nothing on the calendar,” said Chandra, who advertises on both Airbnb and Vrbo, and typically rents to road-trippers from nearby cities. Business has slowed at Cozy Hills and Skyridge Trails, the two campgrounds Lelah Campo runs in Litchfield County, Connecticut. (…)
“Travel has always been one of the best early indicators of a turn in the economy, because it is an expense most easily deferred,” said Steven Blitz, chief US economist at TS Lombard.
- Meet the Canadians Breaking Up With Their Beloved Maine Vacation Spot Summer stays at Old Orchard Beach were a cherished annual tradition for many neighbors to the north—until now
(…) Canadian travelers, which account for about a quarter of all international tourists to the U.S., are boycotting it in droves this summer. (…) Up to 40% of the Old Orchard’s visitors come from Canada, according to the local chamber of commerce, and many are canceling plans. (…)
Overall in Old Orchard Beach, bookings are down between 10% and 20% this summer, the local chamber says. John Donovan, who runs the Friendship Oceanfront Suites, has dropped his three-night minimum to draw more business but says U.S. tourists are being more cautious on spending, too.
“We’re getting hit from both ends,” he says. (…)
Tomorrow we get US retail sales for May. Spending on goods has likely weakened as BofA warned us last week
Seasonally adjusted (SA) spending per household declined 0.7% month-over-month (MoM), with the three-month seasonally adjusted annualized growth rate (SAAR) at -0.9% for May.
Bank of America card data shows that the decreases in both gasoline and retail (excluding gasoline and restaurants) spending offset the increase in spending on services. Payback from tariff buy ahead was clear in electronics, which saw a sharp pullback in May.
We’ll have to wait for the end of the month to get how services are actually offsetting. We know that labor income is still growing near 5% YoY so total spending probably followed.
Now we have to worry about oil prices, piling on tariffs angst.
A Day in a Life Without Immigrants
From John Authers:
(…) According to George Saravelos of Deutsche Bank AG:
While everyone is focused on the impact of tariffs, the real story for the US economy is the collapse in immigration: down more than 90% compared to the run rate of previous years, equivalent to a slowing in labor force growth of more than 2 million people. This represents a far more sustained negative supply shock for the economy than tariffs.
Also unlike tariffs, anti-immigration policies have strong popular support, while Americans appear evenly divided over the ugliness on the streets of Los Angeles. (…)
An economic experiment lies ahead — do the benefits of immigration outweigh the costs? (…)
Not even Democrats want to encourage migration. As vice president, Kamala Harris told potential migrants: “Do not come. Do not come.” Coming from her, the message didn’t land. It does now. And the meaning is clear that there is no statute of limitations. However long you’ve been in the US, if you’re not legal, “you gotta go home.”
In theory, immigration can have positive or negative effects on inflation and unemployment. Migrants mean greater demand, which pushes up prices. They also increase the supply of labor, reducing costs for businesses and prices for consumers. The question for economists is whether there is a shortage or surplus of labor.
This divides the Republican Party — although their answers to an economic question tend to reflect cultural priorities. Turning Point USA’s Charlie Kirk, a vocal Trump proponent, argues that it’s time “to ban Third World immigration, legal or illegal” because the US has “reached our limit, and we have a huge cultural, educational, housing, financial and essential services problem to fix now because of it.”
The business wing of the party, and its natural supporters in Wall Street, take the opposite position. Vincent Deluard, macro strategist at StoneX Financial, argues that MAGA policies raise labor costs and are part of a “long march towards economic populism” and an agenda of “redistributing income to workers.”
After the pandemic, the US suffered a severe labor shortage, and job vacancies surged to an all-time record. That fueled a return to inflation and a wave of immigration, leading to what Deutsche’s Saravelos calls a Goldilocks mix of high employment growth and low wages. If the immigration halt endures, he says, “it must follow that over the course of the year the reverse will happen.”
For economists, the issue isn’t difficult. As Andrew Harris, of London’s Fathom Consulting, puts it: “There’s a negative supply shock, from restricted migration, and a positive demand shock from reshoring. How is that not going to be inflationary?”
It’s possible that minds will change if the economic experiment plays out, and America discovers that it needs its migrants after all. Absent that clear evidence, however, the issue is cultural. Anti-immigrant sentiment long predates Trump, and spreads far beyond the US. Though now driven primarily by the populist right — from Nigel Farage’s various British parties that drove Brexit, through France’s Le Pen to the Alternative für Deutschland — it’s also about the left, and it involves intellectuals as much as the masses.
The British liberal journalist David Goodhart published “The British Dream” in 2013, arguing that the left had been wrong about immigration, which, he said, created “a kind of development distortion, the human equivalent of global trade and fiscal imbalances” in which well-educated people left countries that needed them for places where they could enjoy a higher standard of living.
Labour Prime Minister Keir Starmer shocked many observers last month with a white paper to “restore control over the immigration system.” Just as conservatives were ready to compromise before Trump arrived, now figures on the left feel they must appease the anti-immigrant movement.
In the US, a country almost entirely made up of migrants and their descendants, opposition to migration is more complicated. But in 2004, the Harvard political scientist Samuel Huntington published a hugely controversial essay, The Hispanic Challenge. He argued that Hispanics were less prepared to assimilate than their predecessors, kept themselves apart in enclaves, and rejected “Anglo-Protestant values that built the American Dream.” They hadn’t crossed oceans, but merely walked across a border. Indeed, most came to the US not just to settle but to earn money to build “una casa por mama.” Huntington warned of a risk ahead from
the rise of an anti-Hispanic, anti-black, and anti-immigrant movement composed largely of white, working- and middle-class males, protesting their job losses to immigrants and foreign countries, the perversion of their culture, and the displacement of their language.
Writing in the year of Un Dia Sin Mexicanos, he invoked another movie: 1993’s Falling Down, in which Michael Douglas plays a frustrated white man who has lost his job and explodes with violence against the migrants who now dominate Los Angeles.
A sequel to Un Dia is in the works. The original ends with the migrants reappearing as suddenly as they had vanished, and emotional scenes of reconciliation. “Damn these gringos are f***ing cool,” says one immigrant as he’s hoisted on the shoulders of border control agents who cannot contain their delight that Mexicans are back. Such a cinematic ending would be preferable — but it looks as if the US will have to experience life without immigration for a while before any such happy ending is possible.
President Trump has ordered Immigration and Customs Enforcement (ICE) to “expand efforts to detain and deport” undocumented immigrants in Democratic-run cities. (…)
Trump wrote via Truth Social he’s ordering ICE officers to “do all in their power to achieve the very important goal of delivering the single largest Mass Deportation Program in History.”
- To achieve this, Trump wrote “we must expand efforts to detain and deport Illegal Aliens in America’s largest Cities, such as Los Angeles, Chicago, and New York, where Millions upon Millions of Illegal Aliens reside.”
- He added that these and other cities were the “core of the Democrat Power Center” as he echoed baseless claims he made during the 2024 presidential election about Democrats using undocumented immigrants to “cheat in Elections,” among other allegations that he did not provide evidence on.
Top Trump aide Stephen Miller and Homeland Security Secretary Kristi Noem demanded late last month that ICE seek to arrest 3,000 people a day — triple what agents were arresting in the early days of the second administration.
- However, Trump acknowledged Thursday that his “very aggressive” immigration policies were ripping long-time workers from the farming and hospitality industries and moved to halt ICE raids on those working at hotels, farms, meatpacking plants and restaurants.
- The administration’s hardline immigration policy has triggered nationwide protests, and many of the millions at Saturday’s “No Kings” demonstrations that were held to counter the military parade Trump hosted on his birthday displayed signs that were critical of ICE raids.
An Axios analysis found that efforts to arrest and remove unauthorized immigrants already appear most aggressive in five southern states with Democratic-leaning cities, while deeply red, rural states are seeing less activity.
- The Axios review of removal orders, pending deportation cases and agreements between immigration officials and local law enforcement agencies sheds light on where the Trump administration is dispatching resources to support its mass deportation plan.
- The analysis shows local law enforcement agencies in Texas, Florida, Georgia, North Carolina and Virginia have been most cooperative with ICE through deals known as “287 (g)” agreements.
The data analyzed by Axios and the locations of the agreements between federal and local authorities reflect a few simple truths about immigration enforcement across the U.S.
- There aren’t nearly enough federal agents to meet Trump’s unprecedented deportation goal of deporting a million immigrants a year.
- In some places where the Trump administration faces a gap in resources, local law enforcement agencies are unable or unwilling to meet the feds’ demands or expand beyond their usual enforcement duties.
I wrote last week:
This chart illustrates the contribution to employment, and to the economy, and to inflation through lower wages, that foreign born workers have had in the last 10 years, even more so in the last 5 years. Native Americans in the labor force have barely increased since 2019 while the total labor force rose by 12.5 million, virtually all foreign born. That is truly part of American exceptionalism, isn’t it?
Trump is now considering shielding farming, hotel and leisure sectors, but how about construction, so crucial for MAGA plans, and all others listed in the above chart?
Gosh, the economy is so complicated!
Axios adds:
There are about 8.5 million undocumented workers in the U.S., according to an estimate, soon to be published, provided by Matthew Lisiecki, senior researcher and policy analyst at the Center for Migration Studies.
“There’s a fairly high share of undocumented workers in fast-growing occupations like data scientists and software developers,” he says. (…)
Many firms are now undertaking I-9 audits to make sure their workers are authorized.
“Employers are scrambling to figure out who they can employ because one of their obligations is to verify someone if their employment authorization is ending,” says Daniel Pierce, an immigration lawyer at Fragomen. (…)
Instead of hiring Americans, some multinationals with offices outside the U.S. are just hiring more workers overseas, says Krause-Vilmar. “The reality is this is not good for America. It’s in our national interest to keep jobs here.”
China’s Consumer Boom Seen Temporary as Weak Sentiment Persists
(…) Retail sales grew 6.4% last month, the fastest pace since December 2023 and exceeding all estimates. That contrasted with a mild slowdown in industrial output and fixed-asset investment, as Donald Trump’s tariffs hurt overseas demand.
The official data released Monday positions China for solid growth in the second quarter at around 5%, which is the official target for the year. This resilience gives Beijing more breathing room as it copes Donald Trump’s trade war, while potentially delaying broad stimulus measures.
The risk is that retail sales may pull back as temporary tailwinds fade. An earlier-than-usual online shopping festival in May, for instance, could cannibalize June sales. A gloomy job market and worsening home prices will likely continue to push households toward saving over spending. (…)
Retail sales benefited from the so-called 618 annual shopping festival that typically started at the end of May. A similar early shopping season also boosted receipts in October, but the bump turned out to be short-lived as November figures slowed.
Also boosting consumption was a government initiative subsidizing home appliances like television sets and gadgets. Among products covered by the initiative, the sales of household electronics soared 53% in May from a year ago, the fastest pace on record. Sales of mobile phones and other communication equipment also jumped 33%.
Sales of product categories covered by the government program are now running almost 20% above where they’d be without the subsidies, according to Oxford Economics estimates. Other items were broadly flat in May from a year ago, based on its estimates.
These government subsidies are largely drawn from Beijing’s issuance of ultra-long special sovereign bonds this year, of which 300 billion yuan ($41 billion) was earmarked for the program. Local media reports indicate funds in some regions are already depleting, indicating the need for more funding allocation if authorities wish to sustain the spending frenzy.
While the subsidies have proved an effective tool for boosting domestic spending, economists contend a lasting rebound in consumer sentiment demands broader fixes. Falling home prices — which recorded the worst drop in months — continue to erode people’s wealth and income, sapping their desire to consume. Salary cuts across various sectors perpetuate a deflationary cycle that pressures corporate profits and household purchasing power. (…)
The government also brought forward its sales of bonds this year, providing an early boost to infrastructure project funding. Infrastructure investment expanded 5.6% in the first five months of the year, keeping the momentum largely intact since the beginning of 2025. (…)
The WSJ adds:
Property investment in the January-to-May period was down 10.7% from the year-ago period, data showed, while new construction starts fell 22.8%. Average home prices across 70 major cities tracked by the government fell last month.
In a research note published after the data were released, Capital Economics economist Zichun Huang said she expects growth to slow this year to around 3.5%, as measured by the consultancy’s proprietary gauge of the Chinese economy, citing an expected weakening in exports because of trade conflict and the ongoing property crisis.
China’s Home Prices Fall Faster as Officials Pledge Support
New-home prices in 70 cities, excluding state-subsidized housing, dropped 0.22% from April, when they slid 0.12%, National Bureau of Statistics figures showed Monday. Values of used homes fell 0.5%, the sharpest decline in eight months.
Residential sales by value declined 6.1% in May from an already low base a year earlier, according to Bloomberg calculations based on other official data released Monday. The monthly decline has exceeded 6% so far this quarter, accelerating from 0.4% in the first three months.
Real estate investment saw a deepening decline, slumping 12% on year in May, Bloomberg calculations showed. That was the steepest drop since December.
In an April survey of 2,500 respondents, UBS found elevated expectations for further property price declines. That will likely continue to dissuade homebuyers and depress market activity in the coming quarters, they cautioned.
At a State Council meeting last Friday, Premier Li Qiang pledged action to make the real estate market “stop declining,” state broadcaster CCTV reported. When China’s top leaders first voiced such a policy target last September, a stimulus package ensued.
Goldman Sachs shows the big difference between primary (new) and secondary (existing) markets. Everybody is underwater with no end in sight:
And adds in another analysis:
China’s falling population and slowing urbanization suggest decreasing demographic demand for housing, although declining family sizes provide a partial offset. We calculate that annual demographic demand in urban China will average only 4.1mn housing units per year in 2025-2030, compared to 9.4mn units per year in the 2010s. It is striking that China’s demographic demand for new urban housing likely halved within a decade. (…)
Academic and industry research suggests that the home vacancy rate in urban China was around 20% in 2020 (significantly higher than the rate in the US and Japan). With house price expectations falling, we expect an annual average investment demand of -1.8mn units in 2025-2030, followed by -1.2mn units per year in the 2030s. In other words, holders of investment properties are likely to be net sellers (to owner-occupiers) for the foreseeable future.
Taken together, China’s urban demand for new properties is likely to remain slightly below 5mn units per year in the coming years, 75% below its peak of 20mn in 2017. (…) Barring major policy changes regarding urbanization and regional development, however, it is difficult to see the need for new home construction to rise above 5mn units per year in urban China.
EARNINGS WATCH
From LSEG IBES:
497 companies in the S&P 500 Index have reported earnings for Q1 2025. Of these companies, 76.3% reported earnings above analyst expectations and 18.9% reported earnings below analyst expectations. In a typical quarter (since 1994), 67% of companies beat estimates and 20% miss estimates. Over the past four quarters, 77% of companies beat the estimates and 17% missed estimates.
In aggregate, companies are reporting earnings that are 6.2% above estimates, which compares to a long-term (since 1994) average surprise factor of 4.3% and the average surprise factor over the prior four quarters of 6.8%.
Of these companies, 63.3% reported revenue above analyst expectations and 36.7% reported revenue below analyst expectations. In a typical quarter (since 2002), 62% of companies beat estimates and 38% miss estimates. Over the past four quarters, 62% of companies beat the estimates and 38% missed estimates.
In aggregate, companies are reporting revenues that are 0.9% above estimates, which compares to a long-term (since 2002) average surprise factor of 1.3% and the average surprise factor over the prior four quarters of 1.2%.The estimated earnings growth rate for the S&P 500 for 25Q1 is 13.7%. If the energy sector is excluded, the growth rate improves to 15.7%.
The estimated revenue growth rate for the S&P 500 for 25Q1 is 5.0%. If the energy sector is excluded, the growth rate improves to 5.4%.
The estimated earnings growth rate for the S&P 500 for 25Q2 is 5.7%. If the energy sector is excluded, the growth rate improves to 7.6%.
Trailing EPS are now $251.76. Full year 2025e: $263.14. Forward EPS: $269.57e. Full year 2026e: $299.97
Corporate officers are not terribly worried for now:
Same for analysts although their energy forecasts could prove too pessimistic, which might make their consumer-related forecasts too optimistic:
Goldman’s David Kostin:
The resilience of household demand for equities is vital because households represent the largest ownership category of the US equity market. Households directly own 38% of the US equity market and control an even larger share including indirect ownership through funds. In particular, most household equity ownership is concentrated among relatively wealthy individuals. The top 10% of households by wealth represent 87% of aggregate household equity ownership.
Households allocate 49% of their total financial assets to equities, the highest level on record and slightly above the previous peak of 48% in 2000. US households’ high allocation to equities is a key differentiator relative to other regions where households allocate a much lower share of their assets to equities, such as Japan (13%) and the Euro Area (10%).
Within 401(k) plans, the average allocation to equities has grown from 66% in 2013 to 71% in 2022 and has been especially pronounced for participants in their 20s (76% to 90%).
Very interesting chart:
Source: @jimwpaulsen
Trump cuts US public spending on health science to lowest level in decade Cost-cutting drive forces universities to dip into endowments and harms companies selling lab supplies
Treasury department data shows cash disbursed from the National Institutes of Health dropped to $2.8bn in May, down 28 per cent from April and the lowest absolute dollar outlay since September 2014, according to Jefferies, an investment bank.
Already in June, pancreatic cancer grant funding for the University of Florida and cash for a coronavirus study at Washington State University have been eliminated, according to Grant Watch, a website set up by researchers to track funding cuts.
The research halted goes well beyond diversity, equity and inclusion projects that the Trump administration has criticised. For decades, the US has funded billions of dollars in research at universities, which had the scientific expertise that the government lacked.
The NIH is the biggest government provider of medical and health research. Its budget totalled $47.7bn in 2024 and four-fifths of that money is disbursed to universities and hospitals as grants for specific projects, according to the Congressional Research Service. (…)
Northwestern has not been paid since late March but has received no official notification from the government about a funding freeze, a university spokesman said. (…)
The funding freezes have forced universities to cancel existing purchase orders with companies, according to sources involved in these transactions. Already, companies that sell to university labs have been hit hard by the NIH cuts. (…)
