Member Briefing April 10, 2024
NFIB: Small Business Optimism Index Hit 12-Year Low in March
The NFIB Small Business Optimism Index decreased by 0.9 of a point in March to 88.5, the lowest level since December 2012. This is the 27th consecutive month below the 50-year average of 98. “Small business optimism has reached the lowest level since 2012 as owners continue to manage numerous economic headwinds,” said NFIB chief economist Bill Dunkelberg. “Inflation has once again been reported as the top business problem on Main Street and the labor market has only eased slightly.” Key findings include:
The net percentage of owners who expect real sales to be higher decreased eight points from February to a net negative 18% (seasonally adjusted).
Twenty-five percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), up two points from February.
Owners’ plans to fill open positions continue to slow, with a seasonally adjusted net 11% planning to create new jobs in the next three months, down one point from February and the lowest level since May 2020.
Seasonally adjusted, a net 38% reported raising compensation, up three points from February’s lowest reading since May 2021.
US Trade Gap Grows in February to Highest Level Since April 2023
The U.S. trade deficit expanded in February by more than analysts expected to reach its highest level since April 2023, as imports once again exceeded exports, according to government data published last week. The overall trade gap grew to $68.9 billion, up $1.3 billion from a month earlier, the Commerce Department said in a statement. The February increase reflected a $7.1 billion rise in imports from a month earlier, which was counteracted by export growth of just $5.8 billion, meaning the overall trade gap rose.
Among the rise in goods exports, civilian aircraft and crude oil exports saw big increases, while imports were boosted by consumer goods including cell phones and other household goods and foods, feeds and beverages. The United States' trade deficit with China shrank to $21.9 billion but remained the widest of any country, while the trade deficit with Mexico surged to $15.3 billion. The continued gap in trade between the world's two largest economies is likely to be on the mind of Treasury Secretary Janet Yellen, who is on her second visit to China in less than a year in which she will raise concerns about overcapacity in certain sectors.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Lloyd Austin Says U.S. Has No Evidence Israel Is Committing Genocide In Gaza - Forbes
- Hamas Says Israeli Proposal Fails to Meet Demands, But is Under Review – Reuters
- Hamas, Israel Remain Far Apart on Gaza Cease-Fire Deal - WSJ
- Israel's Gaza Withdrawal Hints at What Comes Next - BBC
- UK Not Banning Israel Arms Sales, Says David Cameron – Politico
- Top Foreign Affairs Dem Wants ‘Assurances’ Before Approving F-15s for Israel – The Hill
- Israel Moving Ahead With Plan To Attack Rafah: ’There Is A Date,’ Netanyahu Says - Forbes
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- Ukraine Races to Fix and Shield its Power Plants After Russian Onslaught – Reuters
- Lithuania Promises Soviet Spare Parts to Ukraine Amid Energy Grid Barrage – Politico
- West Facing 'Authoritarian' Alliance, Says NATO Chief - BBC
- Russia, China to Work on ‘Double Counteracting’ US-Led Alliance - Bloomberg
- Farm Trade Rift Puts Ukraine’s EU Aspirations in Limbo - Politico
- Eggs, Ammo and Underwear: Inside Ukraine’s New Push Against Military Graft - WSJ
- 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
- Rwanda Genocide: World Failed Us in 1994, President Paul Kagame Says - BBC
- Russia, Kazakhstan Evacuate Over 100,000 People Amid Worst Flooding in Decades - Reuters
- Russia and China Double Down on Defying U.S. - WSJ
- How Japan Is Trying to Rebuild Its Chip Industry - NYT
- Medical Care and Supplies are Scarce as Gang Violence Chokes Haiti's Capital - ABC
- Elon Musk’s Feud With Brazil Escalates As Billionaire Promises ‘Data Dump’ Once Employees Are ‘Safe’ From Authorities - Forbes
- Argentina's Milei to Visit Tesla Factory, Meet Musk this Week – Reuters
- Four Dead After Blast at Italian Power Plant - BBC
- Why Did the Ecuadorian Police Raid the Mexican Embassy? - CNN
- Switzerland’s Climate Failures Breached Human Rights, Top Court Rules – Politico
Policy and Politics
Push to Get NY HEAT Act, Other Progressive Policy Priorities in State Budget as Negotiations Continue
As budget negotiations continue behind closed doors, advocates are rallying in hopes they can still push their priority investments across the finish line. One of those is the NY HEAT Act. The bill is intended to limit costs to customers as New York state transitions away from natural gas, while protecting them from predatory practices. The Senate passed the bill and put it in its budget counter proposal while Hochul’s Executive Budget includes what is known as the 100-foot rule. Hochul omitted a section that places a 6% cap on rates for low-to-moderate income New Yorkers.
State Senator Tom O’Mara says Republicans are “fully on board” with New York leading in clean energy, but says he worries that the bill gives NYSERDA and the Public Service Commission too much power in overseeing utility regulations while questioning how the 6% cap would impact New Yorkers above the threshold.
Read more at NY State of Politics
Census Department: US Foreign-Born Population Grew 15 Percent in 12 Years
The U.S. foreign-born population has grown by 15 percent in 12 years, per a new report from the U.S. Census Bureau released Tuesday. The foreign-born population in the country was around 40 million in 2010, making up 12.9 percent of the total population. The number jumped to 46.2 million in 12 years, with now making up 13.9 percent of the total population. People who are part of the foreign-born population are those living in the country who are not U.S. citizens at birth, lawful permanent residents, foreign students, refugees and unauthorized migrants.
The percentage of foreign-born individuals went up by close to five points, going from 68.3 percent in 2010 to 75.1 percent in 2022, according to the report. Half of the country’s foreign-born populace was from South America. New Jersey, California, Florida and New York are four states where immigrants make up more than one-fifth of the state’s population. California led the way with 26.5 percent, New Jersey was second with 23.2 percent, New York had 22.6 percent and Florida was fourth with 21.1 percent.
Marjorie Taylor Greene Keeps Pressure on Speaker Mike Johnson
Rep. Marjorie Taylor Greene (R., Ga.) ramped up her criticism of Speaker Mike Johnson (R., La.), defending her decision to file a motion to oust him before the Easter recess and excoriating his leadership ahead of contentious votes on extending the life of a controversial surveillance power and sending more U.S. aid to Ukraine. With the House returning to work this week, Greene laid out her case against Johnson in a “Dear Colleague” letter sent to fellow House Republicans on Tuesday, and at a town hall in Georgia on Monday night. But she stopped short of saying that she would activate her motion to vacate the speakership and she avoided drawing any clear red lines.
Greene criticized Johnson for describing funding Ukraine as a priority now, when he had voted against it in September before he became speaker. “The American people disagree—they believe our border is the only border worth fighting a war over, and I agree with them.”
Health and Wellness
Younger Adults Who Age Quickly May Boost Early-Onset Cancer Risk
“Accelerated aging” to cancer in younger adults. This might be the answer as to why cancers are rising in our younger generations. First of all, what is “accelerated aging” and how did researchers determine this? Accelerated aging occurs when your biological age—which is the wear and tear on your body—is greater than your actual age. For instance, a 45-year-old who experiences high levels of stress and spends many hours sitting at work while leading a sedentary lifestyle could have a biological age much higher than their chronological age.
The researchers examined cancer registries, specifically looking for any participants who received a cancer diagnosis before turning 55. Their findings revealed that younger adults identified as biologically aging faster had a higher risk of early-onset cancers. When compared to individuals with the lowest amount of biological aging, those who scored higher had a 42% more risk for early-onset lung cancer, 22% more risk for early-onset gastrointestinal cancer and a 36% more risk for early-onset uterine cancer. Furthermore, researchers noted that accelerated aging among older adults was linked to a 16% increased risk of late-onset GI cancer and a 23% increased risk of late-onset uterine cancer.
Election 2024
- The Senate, House, and White House Could All Change Hands in November- New York Magazine
- Biden Is Spending $1 Trillion to Fight Climate Change. Voters Don’t Care. - WSJ
- Biden’s Fate May be Settled in the Rust Belt Not the Sun Belt - CNN
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
Dali Container Removal Will Take Weeks, a Key to Port of Baltimore Reopening
The process of removing shipping containers from the 984-foot-long Dali has begun, but it is expected to take weeks to complete the job, tow the listing ship, and get the Port of Baltimore reopened for marine traffic after the bride collapse which occurred on March 26. Seven containers have been removed since Unified Command started the process on Sunday to clear up the canal and ultimately reopen for container traffic, a spokesperson for the Key Bridge Response 2024 Joint Information Center told CNBC.
The initial goal is to remove 10 to 12 containers to create a safe working area for the crews involved in recovery efforts for missing workers and removal of debris. The containers that are being removed are leaning over on the port side of the Dali’s bow and pose a risk to crews working in the area. Approximately 140 containers in all are expected to be removed to lighten the Dali so the grounded vessel can be refloated and moved by tugs. It is expected to take approximately two weeks to unload all of the containers.
Yellen Says China’s Overcapacity Poses Risks to World Economy
U.S. Treasury Secretary Janet Yellen said concerns are growing over the global economic fallout from China's excess manufacturing capacity as she kicked off a four-day visit there. "Overcapacity can lead to large volumes of exports at depressed prices," she said in a speech in the southern city of Guangzhou, noting that overcapacity would undercut American businesses, as well as those globally, including those from India and Mexico. "And it can lead to over concentration of supply chains, posing a risk to global economic resilience," she said.
Apart from saying China’s factories risk producing more than the world can easily absorb, she also criticized China’s government for “unfair” treatment of American and other foreign companies. China has pursued “unfair economic practices, including imposing barriers to access for foreign firms and taking coercive actions against American companies,” Yellen said in her speech.
Jamie Dimon Says AI May be as Impactful on Humanity as Printing Press, Electricity and Computers
Jamie Dimon, the veteran CEO and chairman of JPMorgan Chase, said he was convinced that artificial intelligence will have a profound impact on society. In his annual letter to shareholders released Monday, Dimon chose AI as the first topic in his update of issues facing the biggest U.S. bank by assets — ahead of geopolitical risks, recent acquisitions and regulatory matters. The impact will be “possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet.”
his focus on AI, first mentioned in Dimon’s annual letter in 2017, stood out. The technology, which has gained in prominence since OpenAI’s ChatGPT became a viral sensation in late 2022, can generate human-sounding responses to queries. Enthusiasm for AI has fueled the meteoric rise of chipmaker Nvidia and helped propel tech names to new heights. JPMorgan now has more than 2,000 AI and machine learning employees and data scientists working on 400 applications including fraud detection, marketing and risk controls, Dimon said. The bank is also exploring the use of generative AI in software engineering, customer service and ways to boost employee productivity, he said.
A Divided Amazon Labor Union Lurches Toward a Leadership Election
Two years after clinching a historic victory at a warehouse in New York City, the first labor union for Amazon workers in the United States is divided, running out of money and fighting over an election that could determine who will lead the group in the near future. Despite campaigns at several facilities in the past few years, the warehouse on Staten Island still is the only site in the U.S. where the retail giant’s workers have voted in favor of union representation. Cracks emerged within the Amazon Labor Union ranks after it lost the votes at a second Staten Island warehouse and at one in upstate New York, spurring disagreements about the group’s organizing strategy.
Some felt Chris Smalls, the union’s president, spent too much time traveling and giving speeches instead of focusing on Staten Island, where the union still does not have a contract with Amazon. Prominent members resigned quietly or left to form a dissident labor group, which sued the union in federal court last summer to force an election for new leadership. Amazon, for its part, has accused the National Labor Relations Board and the ALU of improperly influencing the outcome of the successful unionization vote. Amazon also claims the results - 2,654 in favor and 2,131 against - do not represent what the majority of employees want. About 8,300 people worked at the JFK8 Fulfillment Center at the time of the April 2022 vote
Norfolk Southern Settles East Palestine Derailment Lawsuit For $600 Million
Norfolk Southern will pay $600 million to settle a class-action lawsuit related to last year’s train derailment in East Palestine, Ohio, the company announced Tuesday, following complaints from residents who said they were affected by the incident after hazardous chemicals leaked into the nearby water, air and soil. The settlement, if approved by the court, will resolve all class action claims from a 20-mile radius of the derailment and personal injury claims within a 10-mile radius for those who choose to participate, Norfolk Southern said.
Compensation from the settlement can be used to address any “potential adverse impacts” from the derailment, the company said, including healthcare needs, property restoration and any business losses. People within 10 miles of the derailment can choose to receive additional compensation for any previous or future personal injury caused by the derailment.
U.S. and European Union Strengthen Transatlantic Trade Ties
Secretary of State Antony Blinken, joined by Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai, joined European Commission leaders in a discussion that centered on fostering economic security, the importance of AI governance, cooperation on secure supply chains and a transatlantic commitment to reducing reliance on high-risk suppliers at the sixth ministerial of the United States–European Union Trade and Technology Council, held in Leuven, Belgium.
The meeting underscored unwavering support for Ukraine from the U.S. and the EU amid geopolitical challenges, as well as a commitment to driving innovation and security in technology and trade. One tangible outcome of the TTC was an update of the “Terminology and Taxonomy for Artificial Intelligence” (i.e., of the definitions of key terms used by the EU and U.S. when discussing AI). This underpins the workstream of the TTC to “ensure the safe, secure and trustworthy development and use of AI,” according to the U.S.–EU joint statement. Both the U.S. and EU pledged to continue working together to address destabilizing Chinese exports of semiconductors in the coming years, including to collect and share nonconfidential information and market intelligence about nonmarket policies and practices, to consult each other on planned actions and to potentially develop joint or cooperative measures to address distortionary effects on the global supply chain for legacy semiconductors.
Gates-Backed Startup Spearheads e-Fuel Production
The Sacramento, California-based startup Infinium, which Gates has backed, aims to create low-carbon alternatives to aviation fuel, diesel and Naptha. Its Corpus Christi, Texas plant is up and running, generating fuel for customers such as Amazon. If successful, Infinium's bid to create sustainable fuel could help to decarbonize some stubborn areas of transportation such as trucking and aviation, according to Bloomberg. American Airlines has also entered into an agreement to buy Infinium's sustainable aviation fuel, once another of its facilities begins production, possibly as soon as 2026, Bloomberg reported. The startup inked a deal in 2022 to power some Amazon delivery trucks in California with its electrofuels.
Infinium's industrial-scale facility in Texas, called Project Pathfinder, uses electricity from neighboring wind and solar facilities to break down water into hydrogen and oxygen parts. The hydrogen is then paired with captured CO2 to create a fuel gas, known as syngas. Infinium then processes this syngas into synthetic liquid fuels including sustainable alternatives to aviation fuel, diesel, and Naptha that the company says are drop-in ready to replace equivalent petroleum-based products.
Commercial Aircraft Services Market Growing to $45B
Airbus S.A. forecasts that the North American commercial aircraft services market will grow by 45% to $45 billion through 2042 due to annual increased in air-traffic volume, the growth of the total fleet serving the region, and requirements for more digitally-enabled and connected aircraft. The Airbus Global Services Forecast is a 20-year outlook study of commercial aviation’s requirements for asset maintenance, personnel training, fleet operation, and “passenger experience enhancement,” for passenger aircraft and freighter aircraft.
- Airbus forecasts that the North American aircraft maintenance market will expand by more than 2.0% annually over the next two decades, from $25.9 billion in 2023 to $37.8 billion in 2042.
- Passenger-jet-to-freighter conversion and used serviceable material will be worth an estimated cumulative market value of $17 billion over the next 20 years.
- Aircraft enhancement and modernization will achieve an average annual growth rate above 4.1% between 2023 and 2042, from $1.9 billion to $4.1 billion, involving cabin and system upgrades as part of fleet and air traffic infrastructure modernization.
- Aircraft connectivity will be another driver of growth in commercial aircraft services, according to Airbus. Whereas currently close to 60% of the North American fleet is “connected,” by 2042 that total will be 90% as airlines implement technologies for better real-time communication for on-the-ground, in-flight, and maintenance operations, as well as to offer better passenger services.
- Finally, Airbus predicts that training and operations activity will rise by a consolidated +0.8% through 2042, from a $2.5-billion market to $3-billion market. Airbus anticipates a need for 366,000 new skilled professionals in North America over the next 20 years, or 104,000 new pilots, 120,000 new technicians, and 142,000 new cabin crew members.
Read more at American Machinist
Stunning Images of Solar Eclipse that Transfixed North America
Millions of people across Mexico, the US and Canada looked to the skies on Monday to witness a total solar eclipse carve a narrow path of darkness across the continent Monday. Its shadow first touched the surface of the Earth in the Pacific Ocean before travelling across Mexico, turning daylight into darkness as crowds watched on.
The eclipse rolled over the border into the US and brought darkness to large areas of Texas, including the cities of Austin and Dallas. Total solar eclipses happen about every 18 months, but they’re often in unpopulated or remote areas whereas this one passed over several big cities across three countries.
Read more at Material Handling & Logistics