ECONOMY WATCH
Goldman Sachs routinely polls its analysts:
The Goldman Sachs Analyst Index (GSAI) declined by 3.5pt to 58.6 in June. The composition was mixed-to-weak, as the employment (-4.5pt to 44.0) and new orders (-5.8pt to 63.4) components both declined while the shipments component increased (+3.2pp to 67.2).
The exports component declined (-10.0pt to 40.0). The inventories component (-3.5pt to 39.8) and the orders less inventories gap (-2.3pt to 23.6) both decreased.
The GSAI’s materials prices component (-8.3pt to 66.7) declined while the output prices (+3.9pt to 56.9) and wages (+9.4pt to 63.6) components both increased. (…)
As we discussed recently, surveys from the New York and Atlanta Feds asked companies to provide quantitative answers to questions about how much of the tariff cost increase they intend to pass along eventually. On average they expect consumers to absorb about 50% of the direct cost of the tariffs.
Surveys from the New York and Dallas Feds also asked companies about the timeline for raising prices. Across these surveys, the average firm expected 60% of tariff cost passthrough to happen within one month, 85% to happen within three months, and 98% to happen within one year.
Half of surveyed analysts indicated that firms in their sector would face higher input costs as a result of tariffs, and all of those analysts expected firms to pass the cost of tariffs on to consumers. One third of those analysts, including those who cover hardware and infrastructure and machinery companies, expected firms to pass along at least 80% of the cost of tariffs to consumers. On average, analysts expected that consumers would absorb 60% of the cost of tariffs, slightly above the average from the New York and Atlanta Fed surveys.
- The daily data for the top 10 airports in the US shows some weakness among foreign arrivals (Apollo)
(…) The annual automotive selling rate likely fell to 15 million in June — the slowest pace in the last 12 months — from 17.6 million in April as consumers grow cautious about big-ticket purchases over worries about the economy. With already high car prices expected to rise further as automakers manage billions of dollars in tariff costs, it may only get worse from here.
“The party is over,” Jonathan Smoke, chief economist for researcher Cox Automotive Inc., said in an interview. “It’s clearly slowing. It’s because of affordability getting worse and forcing what we think will be production declines to keep supply in balance.”
Smoke sees the annualized monthly rate of US auto sales sticking around 15 million in the second half of the year, down from 16.3 million in the first six months of 2025. Last year, Americans purchased roughly 16 million cars and light trucks. (…)
Automakers have so far refrained from large, across the board price increases. Instead, they’ve pulled other levers such as cutting incentive spending, or raising the price of select models affected by tariffs.
Average monthly car payments reached a record $747 in June, up $22 from a year ago, according to J.D. Power. That has more people stretching car loans to 84 months — 7 years — which accounted for 12% of all auto financing last month, up 3 percentage points from last year. (…)
The firm [consultant AlixPartners] predicts automakers will pass along 80% of the cost of Trump’s tariffs to consumers, driving up prices by nearly $2,000 per car.
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Sun Belt Slowdown (Axios)
The once-hot housing markets in the Sun Belt are cooling fast with a buildup of unsold houses sitting on the market for weeks.
- Real estate agents in the South and Southwest say they’re seeing more people list homes, giving up on hopes that mortgage rates will drop anytime soon.
- Houses in Florida now take a median 73 days to sell, up from 55 days two years ago and twice as long as in New Jersey and Virginia. Meanwhile, in Colorado, inventory has surged 51% in May from last year, according to Realtor.com.
- It’s a stark shift from the pandemic-era frenzy when cheap mortgages and an influx of people to the south triggered bidding wars and record-fast sales.
- Meanwhile, tenants in New York City’s roughly 1 million rent-stabilized apartments face a fourth straight year of price hikes.
Did you miss yesterday’s YOUR DAILY EDGE: 30 June 2025: Houston, … Houston?
Goldman Sachs: Shifting to a September Cut and a Lower Terminal Rate
We are pulling forward our forecast for the next cut to September. We had previously expected a cut in December because we thought that the peak summer tariff effects on monthly inflation would make it awkward to cut sooner. But the very early evidence suggests that the tariff effects look a bit smaller than we expected, other disinflationary forces have been stronger, and we suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect. And while the labor market still looks healthy, it has become hard to find a job, and both residual seasonality and immigration policy changes pose near-term downside risk to payrolls.
While it is far from clear, we think the odds of a cut in September are somewhat above 50% because we see several routes to get there—underwhelming tariff effects, larger disinflationary offsets, and either genuine labor market softness or a scare from month-to-month volatility. We are penciling in three 25bp cuts in September, October, and December because if there is any insurance motive for cutting, it would be most natural to cut at consecutive meetings, as in 2019. We do not expect a cut in July, barring much weaker-than-expected employment data this week.
Ed Yardeni:
The stock market seems to be carefree. Investors likely figure that any signs of slower economic growth increase the odds that the Fed will ease. Plus, inflation remains remarkably subdued through May notwithstanding Trump’s tariffs. June’s CPI inflation rate is tracking around only 2.6% y/y according to the Cleveland Fed’s Inflation Nowcasting model. The dollar’s weakness is viewed as boosting corporate earnings. And stock investors probably figure that if the bond market doesn’t seem to care much about the deficit-bloating potential of Trump’s Big, Beautiful Budget Bill, why should they? “Summertime, and the livin’ is easy,” as the song goes from Porgy and Bess.
In an interview today with CNBC’s Jim Cramer, Amazon CEO Andy Jassy said the retail and tech giant hasn’t seen significant price increases, and he explained why as follows: “We did a lot of forward buying several months ago, and then a lot of our sellers, our third-party selling partners, forward deployed a lot of inventory to avoid some of the issues with the uncertainty around where tariffs are going to settle,” he said. “And we have, so far, not seen prices appreciably go up.”
MANUFACTURING PMIs
Eurozone: Marginal expansion of production volumes in June
At 49.5 in June, up fractionally from 49.4 in May, the HCOB Eurozone Manufacturing PMI® reached its highest level since August 2022. Although still below the neutral 50.0 threshold, the latest reading signalled only a marginal downturn in manufacturing conditions. Reduced staffing numbers and lower stocks of purchases were negative influences on the headline PMI in June, while rising production had a positive impact.
There was a mixed picture across the national Manufacturing PMIs in June, with Ireland and Greece once again posting the strongest improvements in overall business conditions. Spain and the Netherlands also registered strengthening manufacturing performances, with the latter posting the fastest upturn since May 2024. In contrast, Austria, Italy and France all registered faster declines in manufacturing sector conditions. Goods producers in Germany also signalled a sustained downturn in June, but the speed of contraction was only marginal and the least marked since August 2022.
Production volumes across the Euro area manufacturing sector increased for the fourth successive month in June. However, the rate of expansion was only marginal and eased to its weakest since March. Higher levels of output were supported by stable order books and, in some cases, efforts to clear backlogs of work.
Despite a rise in output and an improved trend for incoming new work, the latest survey indicated a further modest decline in staffing numbers. Lower employment has been recorded throughout the past 25 months and the rate of job shedding was slightly faster than in May. Cutbacks to input buying also continued in June, albeit to the least marked extent for three years. Reduced purchasing activity partly reflected ongoing efforts to streamline inventories. Stocks of purchases have declined in each month since February 2023.
Suppliers’ delivery times worsened for the first time since January, despite subdued demand for manufacturing items. Purchasing costs meanwhile decreased for the third successive month, which led to another marginal reduction in average prices charged by euro area manufacturers.
Finally, business optimism continued to recover from April’s recent dip. Confidence levels regarding prospects for output growth over the next 12 months were the highest for more than three years in June and comfortably above the long-run series average.
China: Manufacturing sector returns to growth in June
The headline seasonally adjusted Purchasing Managers’ Index™ (PMI) rose to 50.4 in June, up from 48.3 in May. Posting above the 50.0 no-change threshold in June, the latest figure signalled that manufacturing sector conditions improved at the end of the second quarter. Business conditions have now improved in eight of the past nine months.
Helping to lift the headline index was a renewed expansion in manufacturing production in June following a brief decline in May. While modest, the rate of growth was the quickest since November 2024, and driven by reports of firmer demand conditions.
According to panellists, better trade conditions and promotional activities supported a fresh rise in new orders. The rate of new order growth was only marginal, however, as external demand remained muted. New export orders declined for the third month in a row in June, albeit at a noticeably weaker pace than in May.
Meanwhile, a slight accumulation of backlogged orders was recorded for the first time in three months. This was attributed to both higher new work inflows and a reduction in workforce capacity. Employment across the Chinese manufacturing sector fell in June amid both resignations and redundancies, according to panellists.
Firms were generally cautious with hiring on the back of cost control measures and reduced optimism regarding output in the next 12 months. While the Future Output Index posted above the neutral 50.0 threshold to reflect positive expectations for the year ahead, the level of confidence eased since May and remained below the series long-run trend. Nevertheless, companies were hopeful that business development efforts and new product launches will help to drive sales and production growth.
Sufficient holdings of input stocks at goods producers led to a reduction in input buying in June. The level of pre-production inventory across the sector was unchanged on the month. In contrast, stocks of finished goods were depleted slightly as items were shipped out for order fulfilment.
Finally, supply chain conditions continued to deteriorate at the end of the second quarter, as Chinese manufacturers experienced delivery delays again in June. That said, reports of lower raw material prices drove a fourth monthly reduction in average input costs.
Chinese manufacturers often shared cost savings with their clients, resulting in another decline in average selling prices. Export charges continued to increase, however, driven by rising shipping and logistics costs.
The official manufacturing purchasing managers index for June–the first full month after the China-U.S. trade truce was reached in London–came in at 49.7, edging up from May’s 49.5 and matching the 49.7 tipped by a Wall Street Journal poll of economists, according to data released by the National Bureau of Statistics on Monday.
The subindex for total new orders moved back to the expansionary territory and climbed to 50.2 in June, compared with 49.8 in May, and the new export orders subindex rose to 49.7 from 47.5.
Japan: Manufacturing conditions stabilise in June
The headline S&P Global Japan Manufacturing Purchasing Managers’ Index™ (PMI®) rose from 49.4 in May to just above the neutral 50.0 level at 50.1 in June. The latest reading was therefore consistent with broadly stable operating conditions following an 11-month period of deterioration.
Data split by broad industrial group indicated that business conditions improved for makers of consumer goods, but weakened slightly across both intermediate and investment goods segments.
Helping to push the headline index higher was a fresh rise in output during June. Though modest, it marked the first increase since last August, with some panel members raising production due to hopes of improvements in customer demand in the months ahead. Other firms noted the rise was also to help reduce backlogs.
Overall demand conditions remained subdued in June, with manufacturers recording a further decline in overall new orders. The rate of contraction quickened slightly since May but remained mild. There were reports that US tariffs and lingering uncertainty over the outlook had dampened sales. New export business likewise declined in June and at a solid rate, with lower demand across key markets in Asia, Europe and the US noted by panel members.
Muted customer demand led manufacturers to remain cautious with regards to purchasing activity, which fell further in June. That said, the rate of contraction was the slowest seen in the current nine-month sequence of decline. Companies also remained wary regarding inventory levels, with stocks of finished items falling slightly, while inventories of inputs rose only fractionally.
Average supplier performance continued to deteriorate, though lead times lengthened only slightly overall. According to panel members, stock and labour shortages at vendors contributed to delivery delays.
Employment across Japan’s manufacturing sector remained on an upward trajectory in June. Though modest, the latest upturn in staff numbers was the most pronounced in 14 months. Companies often noted that staffing levels had increased due to the filling of vacancies and expectations of firmer customer demand.
Alongside higher output, improved staffing capacity supported a further reduction in backlogs of work, which fell solidly overall.
After easing to a 14-month low in May, average input cost inflation accelerated slightly in June and remained sharp overall. Manufacturers noted a variety of inputs had gone up in price, including raw materials, labour, energy and transport.
Companies looked to partially pass on higher cost burdens by raising their selling prices again in June. The rate of output charge inflation was solid, having edged up to a three-month high.
Japanese goods producers generally anticipate production to increase over the next year, with overall optimism improving to the highest level since January. Forecasts of stronger market conditions and increased sales supported growth projections, while some firms also cited company expansion plans and new product releases.
ASEAN manufacturing sector downturn deepens at midway point of 2025
The S&P Global ASEAN Manufacturing Purchasing Managers’ Index™ (PMI®) posted below the neutral mark of 50.0 for a third straight month in June. At 48.6 down from 49.2 in May, the index signalled a modest, yet the most pronounced worsening in operating conditions since August 2021.
Both new orders and output remained in contraction territory since April. Recent figures revealed a sharper decline in incoming new orders for ASEAN goods producers, marking the most significant drop since August 2021.
The overall new orders landscape was once again hampered by declining foreign demand for ASEAN goods, which continued to worsen. In fact, the rate of decrease in new export orders was solid and the most pronounced in eight months. Meanwhile, the downturn in production remained shallow, with the rate of decrease consistent with that observed in May.
Manufacturing companies across ASEAN aligned their purchasing of inputs and employment in line with the deteriorating demand picture. Both measures recorded steeper contractions, with payroll numbers being reduced to the greatest extent since October 2021.
The latest ASEAN manufacturing performance was coupled with historically muted inflationary pressures. The rate of input price inflation softened further since May, to indicate only a modest increase in cost burdens, which was the slowest in just over five years. Although the pace of charge inflation accelerated during the month, manufacturers raised their prices only marginally. (..)
The US PMIs are out later today.
China Vows to Rein In Intense Competition, Build Unified Market
China’s top leadership has pledged to curb aggressive price competition among businesses, aiming to accelerate efforts toward a unified national market to help boost domestic demand.
Officials at a high-level economic meeting chaired by President Xi Jinping said they would crack down on “disorderly” low-price competition and phase out outdated industrial capacity, Xinhua News Agency reported on Tuesday.
For years Beijing has sought to dismantle local protectionist barriers in hopes of spurring consumption and domestic demand. With global trade tensions rising, that mission has taken on greater urgency. The renewed focus on curbing excessive competition and overcapacity suggests top leaders are concerned about the deflationary pressures weighing on the economy.
To build a more integrated and efficient domestic market, China plans to standardize rules and infrastructure, align government practices, and unify markets for labor, land, capital and other inputs. Officials also called for the regulation of local investment promotion efforts and strengthening disclosure of related information. The fiscal system will be improved to support the push.
Authorities pledged to encourage private sector investment as part of efforts to boost homegrown innovation in maritime technology and nurture leading companies in the sector.
US narrows trade focus to secure deals before Donald Trump’s tariff deadline President’s 90-day pause on reciprocal levies expires on July 9
Donald Trump’s top trade officials are scaling back their ambitions for comprehensive reciprocal deals with foreign countries, seeking narrower agreements to avert the looming reimposition of US tariffs. (…)
The narrower, piecemeal plan for new deals marks a retreat from the White House’s vow to strike 90 trade deals during the 90-day pause in the sweeping “reciprocal” tariffs the president announced on April 2.
But it also offers some countries a chance to strike modest agreements. The administration would seek “agreements in principle” on a small number of trade disputes ahead of the deadline, the people said.
Countries that agree these narrower deals would be spared the harsher reciprocal tariffs, but left with an existing 10 per cent levy while talks on thornier issues continue, the people said.
However, talks remain complex, and alongside its narrower approach to deals, the administration was also still considering imposing tariffs on critical sectors, people familiar with the matter said. (…)
People familiar with the talks said the poor visibility of possible new sectoral tariffs the US might impose at a later date were hindering discussions. On Monday, Treasury secretary Scott Bessent suggested the US was focused primarily on the reciprocal tariffs, and would leave sectoral levies until later. (…)
Japan has said it will not sacrifice its farmers to secure tariff exemptions from the US, as Tokyo and Washington hardened their positions in a rice diplomacy stand-off and hopes of an imminent trade deal between the allies faded. (…)
Japanese rice production has for decades been an intensely political issue. The crop commands an outsized national importance and farmers have been a crucial base of support for the long-ruling Liberal Democratic party. The US exports some rice tariff-free to Japan under a World Trade Organization “minimum access” agreement, but Japan imposes a levy on any imports beyond a 770,000-tonne limit. (…)
Tokyo has consistently demanded a full exemption from Washington’s blanket 25 per cent tariff on automotive imports, as well as the revocation of the 24 per cent “reciprocal” tariffs that Trump has threatened to impose on Japan. Those levies have been paused until a July 9 deadline to sign a trade deal.
But Japan’s chances of securing any tariff exemption in the short term appeared to be low and falling, said two people close to discussions. (…)
In an interview with Fox News last weekend, Trump bemoaned the “unfair” trading relationship in blunt terms, claiming that the US “[takes] millions and millions” of Japanese cars, while the Japanese “won’t take our cars”.
Japan’s biggest auto companies have established large manufacturing facilities in the US over decades. Car and truck exports to the US totalled 1.37mn vehicles in 2024, with the automotive sector representing about 28 per cent of Japan’s goods exports to the US.
The US, in turn, exports few vehicles to Japan, where American car models are generally seen as too large and fuel consumptive. (…)
Richest 20% Get an Average $6,055 Income Boost in Trump Tax Bill
The Senate’s version of President Donald Trump’s proposed tax cut bill will cost the bottom 20% of taxpayers an average of $560 a year while giving an average boost of $6,055 to those at the top end.
That analysis from economists at the Budget Lab at Yale University bolsters Democratic critiques that the bill takes money out of the pockets of the working poor to give tax cuts to the rich.
The uneven distribution of the bill’s costs and benefits comes from a mix of tax and spending provisions. While the poorest taxpayers bear the brunt of cuts to Medicaid and the Supplemental Nutrition Assistance Program, those at the top end of the income charts would get the biggest benefit of the tax cuts, including income rate cuts and an expanded state and local tax deduction.
A proposal by Republican Senator Rick Scott of Florida would cut Medicaid even further. But the Budget Lab, a nonpartisan policy research group, cites economic studies showing that a little more than half of changes to the federal-and-state-funded health insurance program fall on providers rather than enrollees. And it assumes that states will pick up part of the cost of the social safety net programs, replacing about 1% of the income that the poorest families would have lost. (…)
The analysis excludes the effects of tariffs, which Senate negotiators have floated as a potential way to pay for income tax cuts. The Budget Lab said the bill would be even more regressive if tariffs were included.
- SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too More than 40 million people relied on the food-assistance program in 2024, or about 12% of the population. Many are located in red districts represented by legislators who support gutting the aid.
Shell-Led LNG Canada Ships First Cargo to Meet Asian Demand
Shell Plc has started exports from Canada’s first liquefied natural gas project, helping to meet rising Asian demand and extending its position in the global LNG market.
The first cargo from the plant in British Columbia was loaded on the vessel Gaslog Glasgow. Operator LNG Canada Development Inc. said on Monday that the ship is destined for “global markets.” Shell owns 40% of the project.
LNG Canada is ramping up at a time when demand for gas is on the rise and buyers are focused on trading routes that avoid geopolitical flashpoints — particularly around the Persian Gulf. The plant at Kitimat on Canada’s west coast is relatively close to customers in East Asia and comes on stream ahead of new export plants in the US and Qatar, which won’t add substantial supplies to the market until next year at the earliest. (…)
A second production unit, known as a train, will start up later this year, and the 14 million-ton-a-year facility will reach full capacity in 2026, Cremers said. Once both trains are online, Canada would rank eighth in global LNG exports, behind Nigeria, data compiled by Bloomberg show.
A further expansion is under discussion between Shell and its partners — Petroliam Nasional Bhd., PetroChina Co., Mitsubishi Corp. and Korea Gas Corp. — with a final investment decision likely next year, Cremers said. (…)
In The Globe & Mail:
“With LNG Canada’s first shipment to Asia, Canada is exporting its energy to reliable partners, diversifying trade and reducing global emissions – all in partnership with Indigenous peoples,” Prime Minister Mark Carney said.
B.C. Premier David Eby said: “It’s more important than ever that we get our resources to global markets and reduce our reliance on the United States.”
Happy Canada Day!
Trump to Powell:
BTW: LT rates back to normal?
Musk to Trump: “A massive strategic error is being made right now to damage solar/battery that will leave America extremely vulnerable in the future,” Musk tweeted Sunday, after the Senate unveiled new changes to the bill.
Axios explains:
The “big, beautiful bill,” which would gut key Biden-era clean energy subsidies and potentially impose new taxes on solar and wind projects, could reach Trump’s desk as soon as this week.
Jason Bordoff, who leads Columbia University’s energy think tank, said the bill could hinder the U.S. in the AI race with China.
- “Winning that race is going to require that we increase electricity generation capacity in the U.S. really fast — and by a lot,” he told Axios.
- That soaring demand is creating tailwinds for natural gas and nuclear, but even those “great” sources can’t ramp up fast enough to meet the urgent near-term needs of data centers and AI infrastructure, Bordoff said.
Power prices may rise, with new projects delayed just as U.S. electricity demand climbs for the first time in 15 years. Wind, solar and batteries make up roughly 95% of the projects proposed to connect to the grid.
Trump replies: Trump suggests Doge reviews subsidies to Musk’s companies
Trump to Musk: Elon Musk “may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa.”
Deflationary, really: Florida Gov. DeSantis Announces Tax Holiday On Guns
AI CORNER
China’s humanoid robots generate more soccer excitement than their human counterparts
Four teams of humanoid robots faced off in fully autonomous 3-on-3 soccer matches powered entirely by artificial intelligence on Saturday night in China’s capital in what was touted as a first in China and a preview for the upcoming World Humanoid Robot Games, set to take place in Beijing.
According to the organizers, a key aspect of the match was that all the participating robots operated fully autonomously using AI-driven strategies without any human intervention or supervision.
Equipped with advanced visual sensors, the robots were able to identify the ball and navigate the field with agility
They were also designed to stand up on their own after falling. However, during the match several still had to be carried off the field on stretchers by staff, adding to the realism of the experience.
China is stepping up efforts to develop AI-powered humanoid robots, using sports competitions like marathons, boxing, and football as a real-world proving ground.
Cheng Hao, founder and CEO of Booster Robotics, the company that supplied the robot players, said sports competitions offer the ideal testing ground for humanoid robots, helping to accelerate the development of both algorithms and integrated hardware-software systems. (…)
Booster Robotics provided the hardware for all four university teams, while each school’s research team developed and embedded their own algorithms for perception, decision-making, player formations, and passing strategies—including variables such as speed, force, and direction, according to Cheng.
Are “humanoids”—human-like robots with arms, legs, hands and brains powered by artificial intelligence—on their way to work in factories, stores and your own kitchen? Not yet—but they are quickly evolving, and the market for humanoids could be twice the size of the auto industry in the coming decades.
Morgan Stanley Research estimates the humanoids market is likely to reach $5 trillion by 2050, plus related supply chains as well as repair, maintenance and support. There could be more than 1 billion humanoids in use by 2050.
“Adoption should be relatively slow until the mid-2030s, accelerating in the late 2030s and 2040s,” says Adam Jonas, Morgan Stanley’s Head of Global Autos and Shared Mobility Research.
By 2050, about 90% of humanoids, or about 930 million units, will likely be used for repetitive, simple, and structured work—primarily industrial and commercial purposes. China is likely to have the highest number of humanoid robots in use by 2050, at 302.3 million, trailed by the U.S. at 77.7 million (up from the previous forecast of 63 million).
“The forecast for household usage is much more conservative, with only 80 million humanoids in homes by 2050,” Jonas says. “We are not going to see a robot in every home overnight.”
Creating a general-purpose humanoid that is capable of doing a vast array of useful tasks at home will require technological progress in both hardware and AI models, which should take about another decade. To get those humanoids into homes, prices need to decline significantly, in parallel with regulatory and societal acceptance of this use of humanoids.
“Once we get to that stage, humanoid volume and penetration should pick up quickly,” Jonas says. (…)
Morgan Stanley Research estimates that the cost of one humanoid was around $200,000 in 2024 in high-income countries.
As the technology advances and production volumes increase, prices are likely to fall to about $150,000 by 2028 and $50,000 by 2050. In lower-income countries, which may take more advantage of the cheaper Chinese supply chain, prices could fall to as low as $15,000 by 2050.
At that point, the U.S. penetration rate could range from 3%, for households earning between $50,000 and $75,000 a year, to 33%, for those with annual income above $200,000. About 10% of U.S. households overall could have a humanoid by 2050, totaling 15 million units in the country. Although China is likely to have the larger number of humanoids, only 3% of households are likely to own a humanoid, totaling about 4 million units.
“We recognize that, hypothetically, the average household could have more than one unit, creating a fleet of humanoid butlers,” Jonas says. “However, in our forecasts, we assume one humanoid per household at this time.”
Investors may want to watch the fact that China is dominating the field of AI-enabled robotics, humanoids or otherwise, and the gap with the U.S. is widening.
“It is becoming apparent that national support for ‘embodied AI’ may be far greater in China than in any other nation, driving continued innovation and capital formation,” says Sheng Zhong, Morgan Stanley’s Head of Industrials Research. “In our opinion, China’s lead in AI-robotics may need to widen before rivals, including the U.S., pay closer attention.”
Chinese supply-chain players are currently working on different solutions to improve the performance level of their components, via new design structures, new materials, refined manufacturing processes and AI algorithms to address the precision gap.
“There are some leading U.S. players in humanoid design and development at this stage, but China could catch up when humanoids reach downstream application and mass production, riding on its strong self-sufficient supply chain,” Zhong says.
Meanwhile, there are few U.S.-based alternatives for many humanoid components, such as screws, reducers, motors and batteries. Nearly every robot developer in the world still requires critical components sourced from China and other parts of Asia.
“While it is too soon to declare a final champion in the race for agentic humanoid robot supremacy, the U.S. will need to make significant changes in manufacturing capability, education and national policies to remain competitive in this area,” Jonas says.
WATCH: AI Is About to Get Physical
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Amazon Is on the Cusp of Using More Robots Than Humans in Its Warehouses The e-commerce giant now counts more than one million of the machines at its facilities
(…) One of Amazon’s newer robots, called Vulcan, has a sense of touch that enables it to pick items from numerous shelves. Amazon has taken recent steps to connect its robots to its order-fulfillment processes, so the machines can work in tandem with each other and with humans.
“They’re one step closer to that realization of the full integration of robotics,” said Rueben Scriven, research manager at Interact Analysis, a robotics consulting firm.
Now some 75% of Amazon’s global deliveries are assisted in some way by robotics, the company said. The growing automation has helped Amazon improve productivity, while easing pressure on the company to solve problems such as heavy staff turnover at its fulfillment centers. (…)
The average number of employees Amazon had per facility last year, roughly 670, was the lowest recorded in the past 16 years, according to a Wall Street Journal analysis, which compared the company’s reported workforce with estimates of its facility count.
The number of packages that Amazon ships itself per employee each year has also steadily increased since at least 2015 to about 3,870 from about 175, the analysis found, an indication of the company’s productivity gains. (…)
Amazon is also rolling out artificial intelligence in its warehouses, Chief Executive Andy Jassy said recently, “to improve inventory placement, demand forecasting, and the efficiency of our robots.” Amazon said it will cut the size of its total workforce in the next several years. (…)
“You have completely new jobs being created,” such as robot technicians, said Yesh Dattatreya, senior applied scientist at Amazon Robotics. Warehouse workers are being trained in mechatronics and robotics apprenticeships. (…)
