Member Briefing April 10, 2023
March Jobs Report Shows Hiring Gradually Cooling
The U.S. economy added 236,000 jobs in March, short of expectations, according to the Bureau of Labor Statistics. In manufacturing, employment edged down by 1,000. Overall unemployment has reached a historically low 3.5%. And the overall employment rate for workers in their prime working years, defined as ages 25 to 54, rose to 80.7% of the population — the highest such rate since 2001, meaning that the losses of the pandemic have more than been recovered in that group.
"The March employment report shows some steam is coming out of the job market, but it isn’t falling out of bed," Mark Hamrick, Bankrate's senior economic analyst, said. "Growth in payrolls was largely as expected, and substantially below the pace of the previous two months." The Fed is hoping to bring down inflation without tipping the country into a recession — thought to be a difficult task. But Friday's report is a sign of hope to the extent that it shows that employment growth is at a sustainable pace without unemployment rising.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Leaked Documents Reveal Depth of U.S. Spy Efforts and Russia's Military Struggles - NYT
- DOJ Opens Investigation Into Leaks of Apparent Classified US Military Documents – CNN
- Pope Appeals to Russians on Ukraine, Decries Middle East violence, in Easter Message - Reuters
- Journalist Evan Gershkovich Formally Charged With Espionage in Russia - BBC
- Russia’s Ruble Slides on Capital-Flight Fears - WSJ
- The Russians Are Running Out Of Tanks and Tank Crews. And It's Going To Get Worse - Forbes
- Xi Willing to Call Ukraine's Zelenskiy, EU Chief Says - Reuters
- Ukraine Strikes Russian Military Base in Occupied South as Offensive Looms
- Russia Launches Thermobaric Rockets, Ukraine Flings A Line-Charge—And Bakhmut Explodes - Forbes
- 'It Was Heartbreaking': Ukraine Children Back Home After Alleged Deportation – Reuters
- 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
Saudi Arabia-Led Oil Cuts Run Into Gusher of Alternative Supplies
A burst of supply from a grab bag of smaller oil-producing countries threatens to undermine efforts by Saudi Arabia and its allies to keep prices high. Iran, Guyana, Norway, Kazakhstan, Brazil and Nigeria have pumped more oil since the fall, boosting the world’s supplies even as some of the biggest producers throttled back.
Since September, the recent high point for Saudi production, the kingdom has lowered daily crude output by 560,000 barrels to about 10.5 million, according to International Energy Agency data from February. Iraq, the U.A.E. and Kuwait have each cut output by more than 100,000 barrels a day, too. The cuts prompted analysts to predict a huge rise in prices for the first quarter of 2023 to $115 a barrel. That is not how it panned out. Most-active Brent futures averaged $82 a barrel in the first quarter and slid to a closing low of less than $73 a barrel in mid-March.
NFIB: Labor Quality Continues to Hold Back Small Business Hiring
Owners reporting labor quality as their top small business operating problem remains elevated at 23%, according to NFIB’s monthly jobs report. Labor costs reported as the single most important problem to business owners decreased one point to 11%, just two points below the highest reading of 13% reached in December 2021. Forty-three percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down four points from February. Thirty-four percent of owners have openings for skilled workers and 19% have openings for unskilled labor.
Overall, 59% reported hiring or trying to hire in March, down one point from last month. Of those hiring or trying to hire, 90% of owners reported few or no qualified applicants for the positions they were trying to fill. Twenty-six percent of owners reported few qualified applicants for their open positions and 27% reported none.
COVID News – The Latest Numbers from Johns Hopkins
The US CDC is reporting:
- 1 million cumulative cases
- 12 million deaths
- 139,991 cases week of March 29 (down from previous week)
- 1,596 deaths week of March 29 (down from previous week)
- 2% weekly decrease in new hospital admissions
- 4% weekly decrease in current hospitalizations
The Omicron sublineages XBB.1.5 (87.9%), XBB.1.9.1 (4.6%), XBB (2.5%), and XBB.1.5.1 (2.1%) currently account for a majority of all new sequenced specimens, with various other Omicron subvariants accounting for the remainder of cases.
NYS COVID Update – (Now Reporting Weekly)
The Governor updated COVID data for the week ending April 7.
- Weekly: 61
- Total Reported to CDC: 79,272
- Average Daily Patients in Hospital statewide: 977
- Average Daily Patients in ICU Statewide: 108
7 Day Average Cases per 100K population
- 08 positive cases per 100,00 population, Statewide
- 40 positive cases per 100,00 population, Mid-Hudson
New York AG, Hochul Challenge Congressional District Maps
New York Attorney General Letitia James and Gov. Kathy Hochul on Friday filed an amicus brief alleging the current congressional map drawn by a court-appointed special master last year must not remain in effect until 2030, or the remainder of the next decade until the next federal census. Special Master Jonathan Cervas was appointed to redraw the lines ahead of the 2022 election after the Legislature rejected the lines crafted by the state Independent Redistricting Commission and after the state Court of Appeals rejected the lines drawn by the Legislature.
The governor and James assert the 10-member commission has significant time to generate new maps and follow the process outlined in the state Constitution to create congressional maps going forward, according to the brief, filed in the Appellate Division, Third Department.
Just Like That a Proposal to Modify NY’s Climate Law Got Nixed
Last week, in a blink-and-you-missed-it moment of political drama, climate change very briefly became the topic du jour when Gov. Kathy Hochul reportedly tried to throw a last-minute proposal into the negotiations. The first report of Hochul’s attempt to change how the state measures methane gas emissions and her administration’s subsequent withdrawal of the proposal happened over less than a week’s time. But a lot happened in those few days.
Activists mobilized quickly, holding a rally in the state Capitol on April 3. In the face of backlash, the Hochul administration initially dug in. “As it stands today, the climate act’s emissions accounting method is certain to be a major driver of future costs for New York families,” it was argued defending the idea that sparked such fierce opposition as a smart fiscal move that would still keep New York on track to hit its ambitious climate goals. But just two days later, on April 5, the administration pulled the controversial proposal from budget talks in favor of other climate change agenda items of Hochul’s.
WTO Report: Global Trade Growth to Slow to 1.7 Percent in 2023
Global trade growth in 2023 will slow to 1.7 percent, the World Trade Organization (WTO) said in its annual trade statistics and outlook report, published on Wednesday. The volume of world merchandising trade has been weighed down by the effects of the conflict in Ukraine, high inflation, tighter monetary policy and financial market uncertainty, the report said.
However, the forecast for trade growth in 2023 is up from the previous estimate of 1.0 percent from last October. China's adjustment of its COVID-19 measures is a "key factor" in this increase, the report said. The reopening of China is expected to boost international trade, the report said. Dragged down by a sharp slump in the fourth quarter, world trade volume grew by 2.7 percent, "a smaller-than-expected increase". According to WTO economists projections for trade and GDP growth in 2023 are below the averages for the past 12 years, of 2.6 percent and 2.7 percent respectively.
NY Fed Model: Inflation Persistence Declined Modestly in February
NY Fed economists updated their estimate of inflation persistence, following the release of personal consumption expenditure (PCE) price data for February 2023. The estimates are obtained by the Multivariate Core Trend (MCT). The MCT is a dynamic factor model estimated on monthly data for the seventeen major sectors of the PCE price index.
The MCT declined slightly to 4.5 percent in February from 4.6 percent in January. By comparison, the standard twelve-month core PCE measure declined from 4.7 percent in January to 4.6 percent in February following monthly readings of 0.6 percent in January and 0.3 percent in February. The sectoral composition remained stable with the contribution of core goods, core services excluding housing, and housing not too different from their values in October 2022. The trend in housing inflation appears to have stabilized at 8.9 percent (a tick lower from 9.0 percent in January). This is in contrast with the twelve-month measure that has continued to increase.
Bosses Want Work Ethic —So They’re Hiring Older People
Older workers are in demand at a growing number of companies. Perceptions of generational differences don’t always match reality, but three-quarters of people 65 and older said in a Wall Street Journal-NORC survey of Americans’ values last month that hard work is very important to them personally. Among 18-to-29-year-olds, 61% said hard work is very important.
People 55 and older are the fastest-growing segment of the workforce, according to federal data. Demographic shifts help explain the trend—people are living longer and having fewer children—and some retirement-age folks have little choice but to work because of inflation and a weak stock market. But certain businesses are targeting seniors on the premise that age is an asset. The AARP since 2012 has asked companies to sign a pledge to give workers over 50 a fair shot in hiring. Commitments rose 122% last year, compared with 2021, the group says.
Tech Companies Have Been Pouring Billions into VR Tech that Teens Don’t Really Care About
Digitally obsessed teens are a target market for companies selling virtual reality headsets that transport users into entirely new worlds. But it turns out, the younger set isn’t particularly interested—even though tech companies are spending billions on VR. Very few teens use VR devices daily, according to a study published Tuesday by investment bank Piper Sandler. The bank surveyed over 5,600 U.S. teens and found that close to a third of them owned VR devices, but only 4% use them every day and only 14% use them every week.
Compared to the same time last year, use has actually dropped to 14% compared to 17%. Piper Sandler’s results reflect the relatively slow adoption of VR among younger people given that 95% of teens in the U.S. own smartphones and 80% own gaming consoles, according to Pew Research. Still, companies like Facebook parent Meta are pouring billions of dollars into VR and augmented reality, which involves overlaying virtual effects on the real world.
UAW May Target Suppliers More As Wins Against Automakers in the South Fail
Excluding unionization efforts at Ford and General Motors in the 1970s, the UAW has overall been unsuccessful at organizing workers at plants in the South. Location of new electric-vehicle and battery-assembly plants matters for the UAW, as workers are reassigned and some existing plants either retooled or closed. It’s one bargaining chip automakers can use in negotiations, says Steve Silvia, a labor relations professor at American University and author of the new book The UAW’s Southern Gamble.
Suppliers, however, are actually in a more vulnerable position than the OEMs in UAW negotiations going forward, says Robert Chiaravalli, a labor attorney who works with Tier 1 and 2 suppliers in union negotiations. Not only are their pockets less deep than the OEMs, “they’re not going to be in a position where they can take a strike, simply because the OEMS are not going to allow them to stop production.” Chiaravalli recommends suppliers pay attention to and address worker dissatisfaction and give workers a voice before labor organizing starts at their facility.
Gen Z is leading the growing pack of workers who want to go to the office more,
Workers have dealt with more than a year of high inflation and a barrage of negative headlines about an impending recession. And three years into the pandemic, employers are still struggling to strike a balance between in-office and remote work.
The Morning Consult's 2023 State of Workers report indicates that fewer American workers are now working remotely, with 63% of employed adults currently doing most of their work in person, up from 60% in 2022. While 27% of those surveyed said they prefer to work remotely, only 23% currently do so. In the study, 90% of Gen Z workers cite productivity as the reason why they prefer going into the office.
Imports Climbing But Remain Below Pandemic Peaks
While import cargo volume at the nation’s major container ports should climb steadily through this summer, it will remain below record-setting levels seen during most of the pandemic, according to the Global Port Tracker. "The priority at the moment is resolving labor negotiations at the West Coast ports and avoiding any self-inflicted supply chain challenges on top of those we’ve faced the past three years," NRF Vice President for Supply Chain and Customs Policy Jonathan Gold
U.S. ports covered by Global Port Tracker handled 1.55 million TEU in February, the latest month for which final numbers are available. That was down 14.4% from January and down 26.8% year over year. February is historically the slowest month of the year, but the number was the lowest since 1.53 million TEU in May 2020, when many factories in Asia and most U.S. stores were closed due to the pandemic. Ports have not yet reported March numbers, but Global Port Tracker projected the month at 1.68 million TEU, down 28.2% year over year.
Utilities Pursue Pipeline Sales as Natural-Gas Bans Catch On
Dominion Energy Inc. is considering selling its gas-distribution companies serving North Carolina, Ohio and parts of the Western U.S., according to people familiar with the matter. Combined, the assets could be worth as much as $13 billion, some of the people said, though they are unlikely to be sold all together. Meanwhile, National Grid PLC is exploring a possible sale of part of its pipeline network serving the Northeast as lawmakers there look to curtail fossil-fuel use, according to people familiar with the matter. One option under discussion at the British utility company is to sell a minority interest in the network, some of the people said.
The potential sales come as lawmakers and regulators across the U.S. debate the future of natural gas for home heating and cooking as more towns and cities look to phase it out. Utilities are working to determine how to modify or repurpose their natural-gas delivery networks in response.
Toyota Pushes IT Automation Into Overdrive
Toyota claims hyperautomation has saved the company $10 million thus far, at a rate of roughly $5 million annually. One single team saved 6 weeks of labor through the efforts, representing a savings of $250,000, according to the company, which has at least 100,000 automated scripts running on schedulers on its ETL platforms across thousands of databases alone. Hyperautomation “is a disciplined approach for doing three things: rapidly identifying, vetting, and automating as [many processes] as possible,” Karamouzis says. “It could be a business process or an IT process. And to do that, people use a whole myriad of technologies.”
Toyota isn’t quite there yet, even as the company’s ramped-up automation agenda spans business, development, and manufacturing processes. CTDO Kursar is keenly focused on Toyota’s cloud engineering and development practices, which enable all business units to exploit cloud automation features for their needs in ways that are easy to implement.