Member Briefing April 11, 2023
World Bank/IMF Convene Amid a Shaky Global Economic Backdrop
Global finance ministers and central bankers will descend on Washington in the coming days amid economic turmoil that could tip the world into recession. And they will struggle to mount a coordinated response. The war in Ukraine, stubbornly high inflation, rising interest rates, a fragile banking system and slower growth in China are all looming threats. There are also growing tensions among nations, with wealthy countries furiously hiking interest rates to kill soaring prices but creating crushing debt burdens in the developing world.
The expanding list of economic uncertainties will pervade this week’s spring meetings of the IMF and the World Bank, setting up major challenges for leaders as they grapple with food and energy constraints, severe debt loads on developing countries and global warming. The World Bank’s outgoing president, David Malpass, says the global economy is suffering from stagflation – meaning low growth with stubborn price inflation. That comes as the world experiences what he describes as a “reversal in development,” with rising poverty and worsening literacy problems.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- US Scrambles to Trace Source of Highly Classified Intel Leak - Reuters
- New Details on Intelligence Leak Show It Circulated for Weeks Before Raising Alarm - WSJ
- How the U.S. Intelligence Leaks Impact the Ukrainian Government and its War Strategy - NPR
- Russia Says Ramping Up Border Defense as Finland Enters NATO - Reuters
- Ukraine, Russia Send Home Around 200 Troops in Prisoner Swap - AP
- Ukraine Says Russia Is Using ‘Scorched Earth’ Tactics in Bakhmut - WSJ
- Russia Still Aims for the Extinction of Ukraine – National Review
- 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
Manufacturing Employment Stalled in February and March
After experiencing solid growth over the past couple of years, manufacturing employment rose in January to 12,985,000 workers, the highest level since November 2008. Since then, manufacturing employment edged down by 1,000 workers in both February and March. The March total of 12,983,000 remained just shy of the more than 14-year high, but with hiring clearly showing signs of stalling.
At the same time, the overall labor market remained solid, even with some weaknesses. The unemployment rate edged down from 3.6% in February to 3.5% in March, continuing to hover around “full employment” levels and just a tick away from January’s 3.4% reading, which was the lowest level since May 1969.Nonfarm payroll employment rose by 236,000 in March, with the U.S. economy adding 1,034,000 workers through the first three months of 2023, a healthy pace.
Labor Force Participation Continued Upward Trend in March
The labor force participation rate, at 62.6 percent, continued to trend up in March. The employment population ratio edged up over the month to 60.4 percent. These measures remain below their prepandemic February 2020 levels (63.3 percent and 61.1 percent, respectively). The number of persons employed part time for economic reasons was essentially unchanged at 4.1 million in March. These individuals who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. The number of persons not in the labor force who currently want a job was little changed at 4.9 million in March and has returned to its February 2020 level.
Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force was little changed at 1.3 million in March. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also was little changed over the month at 351,000.
COVID News – Study: COVID Death Rates Remained Higher Than Influenza in 2022-2023 Season
In a recent study published in the JAMA Journal, researchers compared the mortality rates associated with coronavirus disease 2019 (COVID-19) with those of seasonal influenza during the fall-winter season of 2022–2023. The results indicated that the mortality rate associated with COVID-19 among the veteran population during the fall-winter season of 2022–2023 continued to be higher than that of seasonal influenza infections.
At 30 days, the mortality rates for SARS-CoV-2 infection and seasonal influenza were 5.97% and 3.75%, respectively, with the excess death rate being 2.23%. Although the mortality rates associated with COVID-19 continue to be higher than the seasonal influenza mortality rates, it must be noted that the death rates for severe SARS-CoV-2 infections requiring hospitalization had decreased substantially since 2020 (when the mortality rates were between 17% and 21%). The seasonal influenza mortality rates have remained relatively steady since 2020 (3.8% vs. 3.7% in 2023).
State Legislators Approve Second Temporary Spending Extension
Members of the State Assembly and State Senate were back in Albany Monday morning to approve a second budget extender, this time to fund government operations through April 16th. The money covers so-called institutional payroll for about 83,000 state workers. Comptroller Tom DiNapoli warned last week lawmakers must have a budget extension approved by noon to avoid any disruption in paying state employees.
The state budget was due on April 1st however, legislative leaders and the Governor have hit a roadblock over changes to the state’s controversial 2019 bail reform law. Governor Kathy Hochul wants to change the law to eliminate the need for judges to utilize the “least restrictive provision” when it comes to considering bail for criminal cases. Hochul is advocating for judges to have discretion in these cases, but many state legislators are strongly opposed to any rollbacks of the bail reform law.
Hochul Names a New Candidate to Become New York's Top Judge
New York Gov. Kathy Hochul on Monday nominated Associate Justice Rowan Wilson from for chief judge of the state Court of Appeals. Wilson is expected to face a far easier path to confirmation than her initial pick for the position. The Position includes oversight of the state’s entire judicial branch and its more-than-$2 billion budget. They also issue key decisions that have a vast impact for New Yorkers. Along with nominating Wilson for chief judge, Hochul also selected former state Solicitor General Caitlin Halligan — another of the seven finalists for chief judge — to replace Wilson as associate justice.
Senate Judiciary Chairman Brad Hoylman-Sigal, a Manhattan Democrat, issued a statement saying positive things about both Wilson and Halligan. He had previously hinted that Wilson would likely have a smooth path to confirmation in the Senate. That’s in direct contrast to LaSalle, who drew immediate skepticism from labor unions and Democratic lawmakers.
Record Spending on Manufacturing Construction Heralds a Made-in-the-U.S. Rebound
Manufacturing has always been an integral part of American life. Paul Revere opened a foundry that produced bells and cannons following his famous midnight ride. Henry Ford’s assembly line made cars affordable to the masses. And U.S. industrial might helped win World War II, when nearly half of private-sector employees worked in factories. That portion plunged after the war, thanks to automation and U.S. companies seeking lower costs overseas. Production capacity, which had grown at about 4% a year for decades, flattened after China’s 2001 entry into the World Trade Organization.
Tennessee-based nutritional supplement company Vireo Systems Inc. imports one of its key ingredients—creatine, an energy-boosting natural compound popular with weightlifters and athletes—from China. After the Covid-19 pandemic interrupted the flow, Chief Executive Mark Faulkner decided to build a plant in Nebraska. The facility, scheduled to open in two weeks, will make creatine with ingredients sourced from nearby, including ethanol processed from local corn crops.
More Workers Take Parental Leave as States, Employers Expand Eligibility
There has been an explosion in the number of workers taking parental leave. In the 12 months through February, a monthly 406,000 workers were absent on average due to paid or unpaid parental leave, up 13.5% from 2021, according to Labor Department data. The 478,000 working parents absent in January was the most since records began in 1994. A greater propensity by fathers to take leave is an important contributor. The number of men on parental leave tripled to an average of 76,500 in the six months ended in February from five years earlier.
The main factor appears to be government and employer policies. While the U.S. remains the only advanced economy without nationally mandated paid parental leave, the share of workers with access to leave is growing, to 25% in March last year versus 19% in 2019, according to the Labor Department. Seven states plus the District of Columbia now require employers to provide paid leave, up from four in 2018, while private employers are also expanding the benefit. Four more states will require paid parental leave by 2026.
Gen Z is Unhappy: 5 Ways HR Can Create the “EX” Young Workers are Craving
Generation Z is the newest generation entering the workforce. As this group of humans, born between 1997-2012, becomes an increasingly significant segment of the global workforce, understanding their concerns and expectations is critical for HR leaders. And as recent reports suggest that Gen Z is generally unhappy at work, it’s up to HR now to create a better employee experience to address this dissatisfaction.
To address Gen Z’s dissatisfaction, organizations must focus on creating a better employee experience that aligns with their expectations. Here are some strategies to achieve this: Enhancing work life balance, Fostering inclusivity, Providing opportunities for growth and development, Emphasizing purpose and impact, Leveraging technology. The boundaries between work and personal life continue to blur, and companies must recognize the importance of meeting the evolving expectations of their employees both inside and outside the workplace.
Buzzkill - Cannabis Jobs Are Going Up In Smoke
According to a new report by the cannabis job platform Vangst, which Forbes exclusively obtained, there are currently 417,493 legal cannabis jobs in the United States, down from 428,059 in 2022. That 2% drop might not sound like a dramatic change, but as marijuana has become the country’s sixth-most valuable cash crop, the dip signals that the $26 billion industry is going through a “reset.”
The nation’s largest marijuana market, California, experienced the biggest drop in jobs—a 13% decrease since 2022. The job market is down in other mature marijuana markets, including Colorado and Oregon. “As more states opened legal stores, [Colorado] lost some of its allure as a cannabis tourism destination,” the report explains. It’s not all bad news. In states that have legalized recently, such as Missouri, and states that have opened hundreds of new dispensaries quickly, like Michigan, jobs and revenue are growing hand in hand.
New York Seeks to be Part of Hydrogen Energy Hub
Gov. Kathy Hochul's administration last week announced New York, along with New Jersey, Maine, Rhode Island, Connecticut, Vermont and Massachusetts submitted a group proposal for the hub, potentially landing a $1.25 billion share of $8 billion in federal funding as part of an infrastructure law approved last year by Congress. The money could lead to a broader spending push for more than a dozen projects in the northeast to advance hydrogen energy production and infrastructure projects.
Officials hope hydrogen energy can be part of a broader transition to renewable and cleaner forms of energy as the state moves to phase out fossil fuels in the coming decades. The following guiding principles are included in the clean hydrogen hub proposal: Prioritization of clean electrolytic hydrogen production or hydrogen made without creating greenhouse gas emissions using clean electricity and water. And Utilization of clean hydrogen as a complement to electrification efforts by focusing on hard-to-electrify sectors of the economy.
Occidental Plans to Suck Carbon From the Air—So It Can Keep Pumping Oil
About fifty miles southwest of Midland, Texas, deep in the oil-saturated Permian Basin, more than 100 workers are busy laying out roads and water lines, preparing to build an elaborate complex of fans, each as large as a tennis court. When they start running in 2024, the fans will suck massive amounts of carbon dioxide out of the air. The carbon will be funneled thousands of feet down deep wells into geological formations, where it should remain for centuries.
The company behind this environmental moonshot is Occidental Petroleum Corp., one of the country’s most successful oil-and-gas producers. It hopes the enterprise will give it license to keep operating as a driller decades into the future. It is spending more than $1 billion to build the first in a planned fleet of plants using direct-air capture to pull the CO2 out of the air, a budding technology with fuzzy economics. Bolstering the move are generous tax incentives included in the climate package President Biden signed into law last year that cover up to 45% of Occidental’s expected initial costs per metric ton.
Tyson Foods Workers Strike at US Chicken Plant Set to Close
About 150 employees of a Tyson Foods Inc (TSN.N) chicken plant in Arkansas went on strike on Monday for better treatment before the company shuts the facility, an organizer said. Tyson plans to close the plant in Van Buren, Arkansas, on May 12, eliminating jobs for 969 employees, as it seeks to improve performance in its chicken business.
Employees refused to work in part because Tyson said they would not receive full payouts for vacation time they accrued, said Magaly Licolli, director of Venceremos, an organization that advocates for poultry workers in Arkansas. She said the strike may continue on Tuesday and Wednesday. Tyson told Reuters later on Monday it will give full payouts to employees with unused vacation or holiday time and pay $1,000 to workers who stay in their jobs until the plant closes.
Tesla Plans New Shanghai Plant to Build Megapack Batteries
Tesla will manufacture Megapack large-scale energy-storage units in the new facility, which adds to its factory for electric vehicles in Shanghai. Tesla made the announcement at a signing ceremony for the project in Shanghai. Tom Zhu, Tesla’s senior vice president of automotive, and Shanghai government officials including vice mayor Wu Qing attended, with Tesla Vice President Tao Lin signing the contract.
Tesla CEO Elon Musk was also reportedly in China at the time. Tesla is leveraging China's world leading battery supply chain to ramp up output and lower costs of Megapack lithium ion battery units to meet rising demand of energy storage globally as the world shifts to use more renewable energy.
Airbus Building Second A320 Line in China
Airbus SA committed to install a second production line in Tianjin, China, for its top-selling A320 series jets, which will bring its Chinese output to 10 aircraft/month, and help the OEM toward its goal of increasing production of single-aisle aircraft from 45 per month currently to 75 per month by 2026. Currently there are nine assembly lines for the A320 series, four in Germany, two in France, two in Mobile, Ala., and the current line in Tianjin.
The A320 series (A319, A320, A321) are twin-engine, narrow-body aircraft that currently stands as the best-selling aircraft in the world. Airbus projects the Chinese market to grow at an average annual rate of 5.3% through 2043, representing demand for 8,420 new passenger jets and freighter aircraft – more than 20% of the world's total demand during that time. The announcement of the new line came as Airbus secured agreements with the China Aviation Supplies Holding Co. finalizing the purchase of 160 Airbus commercial aircraft previously ordered by domestic Chinese airlines.