Member Briefing April 20, 2022
U.S. Housing Starts Unexpectedly Rise to Fastest Pace Since 2006
Residential starts climbed 0.3% last month to a 1.79 million annualized rate from an upwardly revised February figure, according to government data released Tuesday. Applications to build, a proxy for future construction, climbed to an annualized 1.87 million units. The number of total homes authorized for construction but not yet started rose 2.9% in March, while the number of one-family homes authorized but not yet started was little changed at 149,000.
The figures also showed builders are still faced with large backlogs that reflect supply chain difficulties, high materials costs and lingering shortages of skilled labor. At the same time, mortgage rates above 5% for the first time since 2018 are putting purchases out of reach for a growing number of potential buyers.
Invasion of Ukraine Headlines
- Ukraine and Russia: What You Need to Know Right Now – Reuters
- Ukraine Rushes to Evacuate Civilians in East as Russia’s Offensive Pushes Forward – WSJ
- Russia’s Propaganda Machine Takes Another Hit – Politico
- In Ukraine’s South, Russian Occupiers Are Installing Pro-Moscow Politicians and Hunting Dissenters – WSJ
- Stellantis Suspends Vehicle Production in Russia – Reuters
- Lockheed Martin in Talks With Pentagon on Ukraine Weapons – WSJ
- US to Forgo Some G-20 Meetings Over Opposition to Russian Invasion – The HIll
- Hunger Games: Ukrainians Slam Western Agribusinesses for Staying in Russia – Politico
- Europeans Are Terrified of Nuclear War — and Should Be – The Hill
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
World Bank Slashes Global Growth Forecast to 3.2% from 4.1%, Citing Ukraine War
The World Bank lowered its annual global growth forecast for 2022 on Monday by nearly a full percentage point, down from 4.1% to 3.2%, citing the impact that Russia’s invasion of Ukraine is having on the world economy. Other factors behind the slowdown in growth from January’s forecast include higher food and fuel costs being borne by consumers in developed economies across the world, said World Bank President David Malpass.
Malpass told reporters on a conference call that the largest single factor in the reduced growth forecast was a projected economic contraction of 4.1% across Europe and Central Asia, according to Reuters. The World Bank is “preparing for a continued crisis response, given the multiple crises,” Malpass told reporters. “Over the next few weeks, I expect to discuss with our board, a new 15-month crisis response envelope of around $170 billion to cover April 2022 through June 2023.”
Dems Eye Build Back Better Revival
Top Democrats and the White House are eyeing a revival of a stalled-out tax-and-spending bill as the party tries to show deliverables to voters heading into a November election where they are facing tough political headwinds. The hopes of reviving Build Back Better — albeit significantly altered and likely with a different name — comes after Sen. Joe Manchin (D-W.Va.) deep-sixed a roughly $2 trillion, House-passed bill late last year. Since then they’ve struggled with when, or how, to revive the issue with most of the political oxygen focused on a Supreme Court
They’ll have to win over Manchin, who recently stated he would nix many of the earlier package’s social programs and has expressed concerns about surging inflation.
The White House is signaling that they could try to assuage Manchin’s concerns by packaging debt reduction with programs aimed at cutting costs for Americans into a bill.
US COVID – Kids and Omicron
12.9 million. That’s the cumulative number of child Covid-19 cases reported in the U.S. as of last Thursday, accounting for 19% of all cases, according to the American Academy of Pediatrics (AAP). An AAP study of data from 46 states, New York City, Puerto Rico and Guam found a cumulative total of 994 child Covid-19 deaths.
Omicron appears to put children at less risk of severe illness than other coronavirus variants. Between December 26 and February 17, the risk of severe illness among children hospitalized with Covid-19 fell to 3.4%, down from 38.8% during the previous roughly 22 months, according to the JAMA Pediatrics study. An AAP analysis of data from 46 states found that children accounted for between 0% and 0.26% of Covid-19 deaths in each state, with three states reporting zero child Covid-19 deaths. Tuesday’s CDC study recorded no child deaths during either the delta period or the omicron period.
New York COVID-19 Cases, Hospitalizations Rise 13%. CDC Says 26 Counties at Medium, High Risk
New York reported 36,180 cases in the week ending Sunday, up from 32,114 new cases the previous week. New York ranked fourth among the states where coronavirus was spreading the fastest on a per-person basis, a USA TODAY Network analysis of Johns Hopkins University data shows.
Some of the coronavirus’ resurgence in New York stemmed from outbreaks in the Finger Lakes and Central New York linked to two new omicron subvariants, called BA.2.12 and BA.2.12.1. federal officials have renewed indoor mask-wearing recommendations for 10 counties in New York, spanning parts of the Finger Lakes, Central New York, the Southern Tier and the North Country. Another 16 counties fell under the medium-risk category due to rising COVID-19 cases and strain on local health care facilities.
Airlines are Ditching Mask Rules for the First Time in Two Years. Here’s What Travelers Need to Know
United, American, Southwest, Delta, Alaska and other airlines late Monday said they were dropping their face mask requirement effective immediately given a federal judge’s ruling in Florida and the White House response to it.
The mask mandate, announced in January 2021, had been set to expire Monday. But the Centers for Disease Control and Prevention announced last week that it would keep it in place until May 3 to allow more time to study the BA.2 omicron subvariant of the coronavirus that is responsible for the majority of cases in the country. It was the mask mandate’s fifth extension despite repeated requests from airlines and other travel industry officials to ease restrictions.
Justice Department Punts Mask Ruling Appeal to CDC
The Biden administration late Tuesday said it will appeal a federal judge’s decision striking down a mask mandate for public transportation if the Centers for Disease Control and Prevention deem the mandate necessary for public health. The Justice Department’s announcement comes after hours of deliberation, with some Biden administration officials insisting that an appeal is essential to preserve the government’s public health authorities while others argued a fight would have relatively little political benefit or practical effect for the broader Covid response.
The announcement ultimately leaves next steps in the hands of the CDC, where there have been divides over how to proceed on a mandate that was already set to expire in early May. There is growing consensus among White House and public health officials that an appeal would be impractical.
Judge Appoints Special Master as New York Redistricting Suit Continues
A judge in Steuben County on Monday appointed a special master to draw new congressional district boundaries as the legal challenge to the legislative maps drawn by the state Legislature continues to play out. Judge Patrick McCalluster selected Jonathan Cervas of the Institute for Politics and Strategy at Carnegie Mellon University to draw the new lines.
The move is not wholly unexpected and the same judge last month ruled the maps should be redrawn after ruling they violated the state’s constitutional amendment against partisan gerrymandering. Democrats who control the state Legislature have argued the lines were drawn fairly and will be upheld. An appeal to that ruling is expected to be heard in court this Wednesday, which could make the move a moot point.
Read more at NY State of Politics
New York’s SALT Cap Challenge Rejected by Supreme Court
The Supreme Court declined to review a New York-led constitutional challenge to the $10,000 cap on state and local tax deductions imposed by Congress in the 2017 tax law. The high court issued an order Monday denying the request from New York, New Jersey, Maryland, and Connecticut to review a decision of the U.S. Court of Appeals for the Second Circuit. The appeals court rejected several state legal arguments against the cap, including that it unconstitutionally coerces the states to abandon their preferred fiscal policies.
The states argue the cap unconstitutionally interferes with their sovereign authority to levy and collect property and income taxes. The Second Circuit rejected their arguments, finding that neither Article I of the Constitution nor the 16th Amendment bars Congress from curtailing the SALT deduction, even if that means citizens in certain states will pay billions of dollars in additional federal taxes. Such injuries aren’t significant enough to be coercive under the Tenth Amendment, the appeals court ruled.
‘Greenflation’ Is Driving Up Metal Prices. What’s a Manufacturer to Do?
While economists expect high inflation to subside once supply chains stabilize, the growing focus on environmentally friendly materials, products and processes will ensure that prices for some commodities—even after stabilizing—will settle well above their pre-pandemic levels.
For manufacturers that rely on metals and other commodities that are experiencing surging demand, we expect this “greenflation” is not transitory and will have an impact regardless of a particular company’s climate objectives. Increasing energy costs, geopolitical conflicts, political roadblocks around growing mining capacity and the overall supply chain imbalance have no doubt contributed to current price levels, but demand for these metals is also higher than before.
Biden Administration Restores Stricter Environmental Reviews
The Biden administration is restoring stricter environmental standards for approving new pipelines, highways, power plants and other construction projects, including requiring consideration of how such projects might affect climate change. The changes announced Tuesday reinstate National Environmental Policy Act measures that had been removed by former President Donald Trump, who said that federal regulations were needlessly hindering much-needed infrastructure projects.
Under the stricter reviews, federal agencies must take into account the cumulative impacts that a project or a new proposed federal regulation would have in areas such as air and water quality, wildlife habitat and climate change, according to a White House statement. The new guidelines widen the scope of environmental reviews beyond direct and indirect effects.
Traffic Rebounds on Five Mid-Hudson Bridges
Traffic rebounded on the five bridges over the Hudson River operated by the New York State Bridge Authority last year as the COVID-19 pandemic appeared to have eased somewhat. When the pandemic hit and the economy virtually came to a halt, traffic dropped 19.4 percent, to 51.4 million crossings in 2020
Traffic over the last five years peaked at 63.8 million vehicle crossings in 2019. Revenues also hit a five-year high in 2019, at over $58.9 million. It fell to $49.4 million in 2020, but bounced back to over $64.4 million in 2021. The increase was a factor of additional traffic as well as toll increases.
IBM Quarterly Results Beat Estimates As Restructuring Shows Progress
IBM reported first-quarter earnings late Tuesday that beat estimates on the top and bottom lines as the tech giant continued to make progress on its massive restructuring. The company reported adjusted earnings of $1.40 a share on revenue of $14.2 billion. Analysts expected IBM to report earnings of $1.38 a share on revenue of $13.85 billion. Revenue climbed 8% from the year-ago period, or 11% in constant currency.
IBM stock climbed 2.4% to 132.25, during after-hours trading on the stock market today. IBM is committed to $20 billion in mergers and acquisitions through 2024, focusing on software.
3 Strategies to Navigate Packaging Shortages
“Shortages of packaging materials such as pallets, plastics, corrugate, metal and glass are wreaking havoc across supply chains, and it remains unclear when – or if – these constraints will subside,” said John Blake, senior director analyst with the Gartner Supply Chain practice, in a statement. “Packaging procurement is highly complex, as it requires coordinating many different suppliers. To further complicate matters, there has been a lack of investment in technology that would allow for seamless collaboration across the supply chain.”
To successfully navigate in this environment, CPOs must adopt new tactics that drive greater resilience, manage the rising costs of packaging, and improve packaging sustainability. The three actions for COPs to reduce the impact of packaging supply constraints include: Centralize Packaging Specifications, Collaborate with Suppliers, Segment Packaging.