Member Briefing April 12, 2022
Recession Risk Is Rising, Economists Say
Economists surveyed by The Wall Street Journal this month on average put the probability of the economy being in recession sometime in the next 12 months at 28%, up from 18% in January and just 13% a year ago. “Risk of a recession is rising due to the series of supply shocks cascading throughout the economy as the Fed lifts rates to address inflation,” said Joe Brusuelas, chief economist at RSM US LLP.
Economists slashed their forecast for growth this year. On average they see inflation-adjusted gross domestic product rising 2.6% in the fourth quarter of 2022 from a year earlier, down a full percentage point from the average forecast six months ago, though still higher than the 2.2% average annual growth rate in the decade before the pandemic.
Invasion of Ukraine Headlines
- Ukraine and Russia: What You Need to Know Right Now – Reuters
- Ukraine’s Economy to Shrink by 45% Because of War, World Bank Says – WSJ
- Austrian Leader has ‘Open and Tough’ Talks with Putin in Moscow – Reuters
- After Russia’s Ukraine Invasion, Sharp Focus On Calls For UN Reform – Agence France-Presse
- Kharkiv Mayor Says New Weapons Targeting City – The Hill
- Ukraine, Russia Gear Up for War’s Biggest Battles – WSJ
- Warsaw’s Mayor Explains How His City is Coping with a 17% Increase in its Population – The Economist
- What Is the U.S.’s Long-Term Policy Toward Russia Now? – WSJ
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Four of the Top Five Metropolitan Areas for New COVID Cases are Currently in New York, Syracuse Tops the List
While COVID-19 cases have remained low in the U.S. since the decline of the omicron wave this winter, the “stealth” BA.2 variant has reached the U.S. and is causing a rise in cases in some parts of the country, particularly in regions of New York state. The BA.2 strain is currently the dominant strain in the U.S., accounting for about 3 out of 4 new coronavirus cases, according to the Centers for Disease Control and Prevention (CDC).
Health experts had said that the U.S. would likely see an uptick in new coronavirus cases, reflecting what occurred in parts of Europe and Asia. However, a full-on surge like delta and omicron is less likely, according to experts.
New York Fed: Public Expectations for March 2023 Inflation Hit 6.6% Record
U.S. consumers boosted their expectations for inflation and household spending in the year ahead as the price of gas and food steepens according to a survey released on Monday by the New York Federal Reserve. Expectations for where inflation will be in one year rose to 6.6% in March, the highest since the survey was launched in 2013 and up from 6.0% in February. Household spending was seen growing 7.7% in the year ahead, also a series high. Just 23% saw their household finances improving in the year ahead, the smallest share since the survey began.
Americans are experiencing the worst bout of inflation in decades, and it is getting worse: economists polled by Reuters expect a report out on Tuesday will show consumer prices rose 8.4% in March, up from 7.9% in February, as Russia’s invasion of Ukraine drives up food and energy prices.
US COVID – A New COVID Wave is Probably Coming, and America Doesn’t Seem to Care
Anthony Fauci said this week that a surge of COVID is likely this fall, and an increase in cases over even the next few weeks would not be surprising. Fauci’s remarks contrast with a sudden vanishing of the Omicron wave that gripped the country in December and January (and ruined many people’s holiday plans). Cases fell so far so fast that big cities like New York relaxed mandates that had been in place for nearly two years.
When it comes to the blissful oblivion of many to the pandemic’s continued existence, “motivated reasoning” is to blame, says psychologist Paul Thagard, a philosopher and cognitive scientist who authored the paper “The cognitive science of COVID-19: Acceptance, denial, and belief change.” Regarding COVID, “You have to mitigate the risk of the worst thing without having a big debate about whether or not it’s going to happen today. People aren’t really having that conversation.”
Are Some People Resistant to COVID-19? Geneticists Are on the Hunt.
Thousands of people repeatedly exposed to the virus never got sick. Scientists are racing to understand if they might have a genetic resistance to the virus—and whether the trait could be harnessed to develop new drugs against the disease. “There used to be a tendency to more think about the pathogen in terms of severity—it’s a severe pathogen or a mild pathogen,” says molecular virologist Johan Nordgren at Sweden’s Linköping University. Relatively less attention was paid to a host and whether their genes affect their ability to fight off an infection, he says.
In the last two decades or so, though, scientists have been conducting so-called genome-wide association studies to identify certain genes or regions of DNA that may be linked to specific diseases. They do this by comparing the genetic sequences of infected individuals with those who are healthy and seeking correlations between mutations and resistance. While genetic resistance to viral infections isn’t widespread, the fact that it happens at all has ignited interest in similar mutations in COVID-exposed individuals.
Shanghai Has Recorded More Than 130,000 COVID Cases—and No Deaths
In a Covid-19 outbreak that has locked 25 million people at home, the city of Shanghai has reported more than 130,000 cases since March 1, but says there have been no deaths and currently only one patient with severe illness. The absence of deaths, and the low incidence of severe illness recorded in Shanghai as cases rise, stands out compared with outbreaks elsewhere, even accounting for the fact that Covid deaths often lag behind infections by several weeks.
But health and data experts caution that calculating and comparing Covid’s toll in China and elsewhere is difficult due to challenges including determining exactly how people have died, differences in vaccination rates and diverging methods for testing and recording pandemic data.
White House Adviser: Extending TSA Mask Mandate ‘Absolutely’ Still on the Table
A top White House COVID-19 adviser on Monday said that extending the federal mask mandate for all transportation networks, which is set to expire next week, is “absolutely” under consideration. “This is a CDC decision and I think it is absolutely on the table,” White House COVID-19 response coordinator Ashish Jha said on NBC’s “Today.”
Jha said that Centers for Disease Control and Prevention Director Rochelle Walensky will make the decision on extending the mask mandate for transportation networks based on a scientific framework that the agency is developing. He also said that framework will be available in the “next few days.”
10-year Treasury Yield Tops 2.76% Monday
Ahead of bank earnings and inflation data later in the week, investors are keeping their eyes on the 10-year Treasury yield, which continues to spike to multi-year highs. Early Monday, the rate climbed 5 basis points to 2.76%, notching a level last seen in 2019. The momentum gathered pace last week after Fed Vice Chair Lael Brainard said the central bank’s balance sheet would be reduced “at a rapid pace” as soon as May, only to be followed up by similar sentiment during the release of FOMC minutes.
The tightening cycle in the U.S. is also making way for some interesting shifts as policy diverges across the globe. The yield on China’s 10-year government bond fell to 2.75% overnight, marking the first time it has been below the rate of its U.S counterpart in 12 years. The fading premium comes as Beijing sticks to an accommodative monetary stance as prolonged COVID-19 lockdowns – like the one in Shanghai – weigh on its economy.
With New York District Lines On Hold, Judge Blesses Possible Backup Plan
A New York appeals court judge on Friday signed off on the appointment of a neutral expert to prepare new congressional district lines that could be used if the state’s highest court upholds a lower-court ruling that struck down maps drawn by Democratic lawmakers. Justice Stephen K. Lindley of the Fourth Appellate Department, emphasized in his decision that the substitute maps would only be a backup measure meant to preserve a range of possible remedies as the courts consider a broader legal challenge to the maps brought by Republicans.
But Justice Lindley’s directive raised the specter that an increasingly tangled fight over New York’s freshly drawn congressional districts could yet veer away from Democrats months after they enacted a map that favors their candidates in 22 of 26 districts, and require the state to delay this year’s primary contests from June until August.
Where to Start with Robotics and Automation
Today, the major question is not if a manufacturer will adopt automation and advanced technologies, but rather when and how. Adoption of Industry 4.0 technologies is a matter of survival – not only for large manufacturing companies, but also for small and mid-sized manufacturers.The long-term viability of these businesses likely depends on their ability to increase productivity while reducing costs.
Of the new Industry 4.0 applications being deployed in manufacturing operations, applied robotics have experienced the most growth. But more often than not, first-time adopters are apprehensive for fear of making an expensive mistake. According to the Manufacturing Institute, 1 in 3 manufacturers report that insufficient resources and expertise could limit their investment in emerging technologies.
Fortune Releases Their 100 Best Places to Work List
So who are this year’s winners? Top of the list, for the second year in a row: Cisco. It also has the distinction of having been on the list for all 25 years. It has long prioritized its employees’ well-being, and never more than during the pandemic. Number two on the list is Hilton. Despite the pain of the pandemic in the travel industry, Hilton pressed ahead with multiple commitments to helping its employees, including a strong emphasis on diversity and inclusion.
And number three Wegmans Food Markets. This grocery chain, which spreads across seven eastern states, has managed to successfully compete against much bigger chains for over 100 years by taking extra care of its workers. It’s best known for an extremely generous scholarship. The current number of open job-postings at these 100 companies is 238,959—the most we’ve ever seen in the history of the list.
JetBlue is Cutting its Summer Schedule to Avoid Further Flight Disruptions
JetBlue scrapped more than 300 flights over the weekend, with nearly a fifth of all its flights canceled on Saturday. That’s on top of hiring 2,500 workers this year and perks to keep staff on the job. It’s now offering a $1,000 bonus to flight attendants who don’t call out of work through May 31, as well as an extra $100 per trip for attendants who pick up open flights on days off.
“We’ve already reduced May capacity 8-10% and you can expect to see a similar size capacity pull for the remainder of the summer,” JetBlue COO Joanna Geraghty declared. “Despite these challenges and, based on your feedback that the schedule is wound too tight, we know the best plan is to reduce capacity now. I think everyone recognizes that the industry still remains very much in recovery mode, so we believe this proactive step is the right decision.”
West Coast Port Labor Talks Carry High Stakes for Economy, Midterms
More than 22,000 unionized workers at nearly 30 ports along the West Coast are set to begin renegotiating their contract next month against the backdrop of an already-imperiled supply chain, a historically tight labor market and looming midterm elections.
The whirlwind of economic and political factors significantly ups the stakes for the talks, which take place every six years and have in the past stalled traffic at the busiest ports in the U.S. The Biden administration plans to keep close tabs on the talks — and intervene immediately should a breakdown appear imminent.
How Manufacturers can Prevent Becoming Cybersecurity Targets
The alliantGroup writes that by 2019 manufacturing had moved up to the eighth most targeted sector and in 2021 it moved into second place (behind finance). It is clear that, unlike other industries, the manufacturing sector is learning cybersecurity the hard way!
While hackers may lock down your system, halt production, and demand a ransom, it can get worse. They also can compromise a company’s intellectual property, patents, and financial information. Worse still, they might breach a system and do nothing at all. That’s because bad actors know that there’s always a bigger fish to fry at the end of the supply chain. A defenseless supplier can provide relatively easy access to a more valuable target company.
Read more Tube & Pipe Journal
5 Takeaways from the First Round of France’s Presidential Election
French President Emmanuel Macron took first place, ahead of far-right leader Marine Le Pen, in the first round of France’s presidential election on Sunday, but he is on course for a far closer second-round clash than five years ago. While polling suggests Macron should retain the presidency in two weeks, first round results show the incumbent can’t rest on his laurels.
Le Pen will be able to count on voters from far-right TV-pundit-turned-politician Eric Zemmour, who called on his supporters to back her on April 24. Meanwhile, leftist firebrand Jean-Luc Mélenchon fared better than expected and brings a heavy dose of uncertainty to the mix as his voters are a diverse bunch. Many are likely to abstain in the second round, while others will divide up between the French president and Le Pen.