Member Briefing April 18, 2022

April 18, 2022

Posted By: Harold King in Daily Briefing,

Empire State Manufacturing Survey: Activity “Picked Up Significantly”

After three months of sluggishness, manufacturing activity picked up significantly in New York State, according to the April survey. However, firms are less optimistic about the future as longer delivery times, higher prices, and increases in employment are all expected in the months ahead.

The general business conditions index shot up thirty-six points to 24.6.
The new orders index climbed thirty-six points to 25.1.
The shipments index rose forty-two points to 34.5, pointing to a strong rebound in orders and shipments.
The unfilled orders index climbed to 17.3.
The delivery times index moved down eleven points to 21.8, pointing to ongoing increases in delivery times.
The index for number of employees dropped seven points to 7.3,
The average workweek index came in at 10.0, pointing to a small increase in the average workweek.
The prices paid index climbed thirteen points to 86.4, a record high,
The index for future business conditions fell twenty-one points to 15.2, its lowest level since early in the pandemic.

Invasion of Ukraine Headlines

U.S. Retail Sales Rise 0.5% in March, But High Gas Prices and Inflation Take Toll

Consumers increased retail and restaurant spending by 0.5% in March compared with the previous month, according to the Commerce Department, from the revised monthly increase of 0.8% in February. Sales at gas stations accounted for much of the increase with an 8.9% jump over the previous month, reflecting sharply higher fuel prices related to the Ukraine war. Excluding gasoline sales, retail sales fell by 0.3%. Spending rose for a range of other categories, including appliances, electronics, groceries, dining out and clothing.

Declines in online shopping and auto sales held back spending totals. Overall retail sales would have been even higher if not for a 1.9% monthly auto sales decline. Auto companies struggled with a vehicle shortage during the pandemic due to supply disruptions, pushing prices up sharply. Sales also declined sharply at online retailers, a 6.4% drop over February.

Hudson Valley Regional Job Growth Continued in March, Manufacturers Added 300 workers

Manufacturers in the region added 300 net jobs in March according to data from the BLS compiled by the New York State Department o f Labor. Since march of 2021 that number is 1,600. Over the past year, private sector job counts in the Hudson Valley rose by 27,400, or 3.7 percent, to 765,100 in March 2022. Growth was centered in leisure and hospitality (+12,000), professional and business services (+4,900), trade, transportation and utilities (+4,500), other services (+4,100), manufacturing (+1,600), information (+700) and financial activities (+200). Job losses occurred in educational and health services (-600).

Private sector job growth continued to be broad-based, with seven of nine sectors adding jobs for the 12-months through March 2022. Within the region, the Kingston MSA’s private employment sector grew the fastest year-over-year, up 7.9 percent. The second fastest growth was recorded in Sullivan County (+5.9 percent), followed by the Orange-Rockland-Westchester labor market area (+3.5 percent), and the Dutchess-Putnam MSA (+2.6 percent).

Hudson Valley Labor Market Profile – March 2022

US COVID – Uptick

The US CDC is currently reporting 80.3 million cumulative cases of COVID-19 and 984,018 deaths. The 7-day daily incidence was 29,401 new cases on April 12, trending upward since a recent low of 24,816 on March 29. Daily mortality appears to have leveled over the past week, with a 7-day average of 454 on April 7, increasing to 493 on April 8, and down to 452 on April 12. Notably, the 7-day moving average number of new hospital admissions of people with confirmed COVID-19 is +1.4% over the prior 7-day average, reflecting the increasing trend in incidence.

The US has administered 567 million cumulative doses of SARS-CoV-2 vaccines. Daily vaccinations have increased significantly over the past 2 weeks, with the average climbing from 157,534 on March 28 to 444,409 on April 7. The increase likely is a result of the US FDA’s authorization of a second booster dose of the mRNA-based SARS-CoV-2 vaccines for certain individuals. A total of 256.5 million individuals have received at least 1 vaccine dose, which corresponds to 77.3% of the entire US population. A total of 218.6 million individuals are fully vaccinated, which corresponds to 65.8% of the total population.

NYS Vaccine and COVID Update –

Vaccine Stats as of April 15:

One Vaccine Dose

89.9% of all New Yorkers – 16,520,976
In the Hudson Valley 1,719,951

Fully Vaccinated

76.5% of all New Yorkers – 14,795,564
In the Hudson Valley – 1,510,754

Boosters Given

All New Yorkers – 7,355,830
In the Hudson Valley – 921,707

The Governor updated COVID data through April 15. There were 9 COVID related deaths for a total reported of 70,488

Hospitalizations:

Patients Currently in Hospital statewide: 1,216.
Patients Currently in ICU Statewide: 147

7 Day Average Positivity Rate – Cases per 100K population

Statewide 4.68% – 28.88 positive cases per 100,00 population
Mid-Hudson: 4.22% – 25.92 positive cases per 100,00 population

Useful Websites:

New York’s True COVID Infection Rate Unclear as Many At-Home Tests Go Unreported

New York’s true COVID-19 infection rate remains unclear as scores of at-home rapid test results go unreported, while questions mount about disparities among those using the test kits. As the highly contagious Omicron strain fueled COVID-19 surges in recent months, some counties asked people to self-report positive at-home tests via online portals. But the patchwork reporting, which is excluded from the state’s official daily case count, only offered a glimpse of the virus’ spread.

Now, the gaps in at-home test use and reporting are unfolding as New York’s COVID-19 hospitalizations climbed 14% last week, underscoring the urgency of utilizing the test kits efficiently to catch cases early and limit the virus’ spread.

New ‘Highly Contagious’ Omicron BA.2.12 and BA.2.12.1 Subvariants Detected in NY, Cases Mild

New sub-lineages of the omicron strain of COVID-19 that are estimated to be even more contagious than the BA.2 subvariant have been detected in New York state, Department of Health officials said Wednesday, attributing the discoveries to rising case levels.

BA.2.12 and BA.2.12.1 are sub-lineages of the omicron BA.2 subvariant, which now accounts for more than 80% of new infections in the state, the Department of Health said in a press release. The new subvariants are estimated to spread at an alarmingly faster rate – 23% to 27% – than BA.2, but do not appear to cause an increased level of severity in infections, officials said.

The Way Chinese Think About COVID-19 is Changing, Will Government Policy Adjust?

For much of the pandemic the Chinese public has joined officials in hailing the zero-covid strategy as a success. Over the past two years China has had a lower mortality rate from the virus and stronger economic growth than any other big country. But the current wave is changing the way people think about the virus—and about the government’s strategy.

No one wants mainland China to end up like Hong Kong, which was overwhelmed by the highly transmissible Omicron variant, leading to a spike in deaths among unvaccinated old people. The mainland’s elderly population is similarly vulnerable, so a complete lifting of controls is out of the question. At the moment, though, anecdotal evidence suggests that more people are dying because of the Chinese government’s restrictions than from the virus. The state needs to adapt, say critics.

Biden Increases Oil Royalty Rate and Scales Back Lease Sales on Federal Lands

The Interior Department on Friday said it’s moving forward with the first onshore sales of public oil and natural gas drilling leases under President Joe Biden, but will sharply increase royalty rates for companies as federal officials weigh efforts to fight climate change against pressure to bring down high gasoline prices.

The royalty rate for new leases will increase to 18.75% from 12.5%. That’s a 50% jump and marks the first increase to royalties for the federal government since they were imposed in the 1920s. Biden suspended new leasing just a week after taking office in January 2021. A federal judge in Louisiana ordered the sales to resume, saying Interior officials had offered no “rational explanation” for canceling them.

Companies Size Up Their Losses on Russian Operations

Global businesses are tallying up tens of billions in losses from their Russian operations as they grapple with the impact of asset sales, shutdowns and sanctions, according to public statements and securities filings. More than 6oo Western companies have said they would exit or cut back operations in Russia, according to researchers at Yale University.

Losses stemming from the pullout include the expected write-down, or complete write-off, of assets ranging from oil wells to car factories and consumer loans, according to statements by the companies. The impact will be felt well beyond the big announcements that have already come mostly from energy companies. A fifth of the companies in the S&P 500 listed Russia subsidiaries for 2021, according to data provider Calcbench.

US Warns of Cyberthreat to Specific Industrial Machines – Schneider Electric and OMRON Named

A new joint Cybersecurity Advisory (CSA) from the United States government issued on Wednesday warns that advanced persistent threat (APT) actors (read: cybercriminals) have developed a way to gain full system access to multiple industrial control systems (ICS) and supervisory control and data acquisition devices (SCADA), targeting specific models of programmable logic controllers (PLCs) manufactured by Schneider Electric and OMRON.

According to the CSA, cybercriminals have developed custom-made tools to specifically target the machines in question. Once the machines are compromised, the cybercriminals can upload malicious code, modify device parameters, and back up device contents, among other things a company does not want to have to deal with.

185,000 Americans Filed New Jobless Claims Last Week

U.S. jobless claims held near multi-decade lows last week as companies worked to keep employees on their payrolls amid ongoing labor shortages.

Initial jobless claims, week ended April 9: 185,000 vs. 170,000 expected and a revised 167,000 during prior week.
Continuing claims, week ended April 2: 1.475 million vs. 1.500 million expected, 1.523 million during prior week.

“It seems like we’re in the midst of a perfect storm of factors with rising commodity prices, supply chain issues, and a tight labor market so it is not surprising that inflation is rising at its fastest pace in 40 years,” Bill Price, head of investment management for Commonwealth Financial Network, said in an email Tuesday.

Summer is Coming – New OSHA Emphasis Program for Heat Hazards

On April 11, OSHA announced it has launched a National Emphasis Program to protect millions of workers from heat illness and injuries. The NEP lists many manufacturing industries for enforcement.

As part of the program, OSHA will proactively initiate inspections in over 70 high-risk industries in indoor and outdoor work settings when the National Weather Service has issued a heat warning or advisory for a local area. On days when the heat index is 80 F or higher, OSHA inspectors and compliance assistance specialists will engage in proactive outreach and technical assistance to help stakeholders keep workers safe on the job.

ECB Confirms the End of its Bond Buying in the Third Quarter as Inflation Surges

The European Central Bank on Thursday kept its monetary policy unchanged but confirmed it will end its bond buying in the third quarter. The Governing Council faces a dilemma, with inflation hitting a record high of 7.5% in March, while the economic growth outlook weakens due to the war in Ukraine.

The ECB said in a statement Thursday that it now expects to conclude its net asset purchases under its APP (asset purchase program) in the third quarter. It had previously said this would be the course of action if supported by the data. “At today’s meeting the Governing Council judged that the incoming data since its last meeting reinforce its expectation that net asset purchases under the APP should be concluded in the third quarter,” the bank said Thursday. Once the bond buying program is completed, the ECB is expected to begin hiking interest rates, following the same path as the Bank of England and the U.S. Federal Reserve.