Member Briefing April 22, 2024
US Industrial Production Rises Slightly in March on Boost From Manufacturing
Production at U.S. factories increased solidly in March as output at motor vehicle assembly plants and elsewhere rose, suggesting that manufacturing was turning the corner after being constrained by higher borrowing costs. Manufacturing output rose 0.5% last month after an upwardly revised 1.2% rebound in the prior month, the Federal Reserve said on Tuesday. Factory output was previously reported to have rebounded 0.8% in February. Production at factories increased 0.8% year-on-year in March. It edged down at a 0.1% annualized rate in the first quarter after contracting at a 0.9% pace in the October-December quarter. Motor vehicle and parts output increased 3.1% last month after advancing 3.4% in February.
Durable goods manufacturing production rose 0.3%. There were significant increases in the output of aerospace and miscellaneous transportation equipment, and wood products. But output of nonmetallic mineral products, furniture as well as primary metals declined. Production of nondurable goods rose 0.7% as gains in the output of petroleum and coal products and chemicals offset declines food, beverage and tobacco products.
Empire Manufacturing Survey: Activity Continues to Decline
Manufacturing activity continued to contract in New York State, according to the April New York Fed Empire Manufacturing Seurve. The general business conditions index rose seven points but remained well below zero at -14.3.
- The new orders index was little changed at -16.2, and the shipments index fell eight points to -14.4, pointing to an ongoing decline in both orders and shipments.
- The unfilled orders index held steady at -10.1, a sign that unfilled orders continued to fall.
- The inventories index moved up sixteen points to 3.4, indicating that inventories edged higher for the first time in several months,
- and the delivery times index fell to -7.9, suggesting that delivery times shortened.
- The index for number of employees came in at -5.1, and the average workweek index was little changed at -10.6, pointing to an ongoing decline in employment levels and hours worked.
- The prices paid index moved up five points to 33.7, indicating that input price increases picked up slightly, and the prices received index held steady at 16.9.
- Optimism about the outlook remained subdued. The index for future business conditions dipped five points to 16.7, with only 37 percent of respondents expecting conditions to improve in the next six months. The outlook for employment growth weakened noticeably. The capital spending index fell to 6.7, suggesting that capital spending plans remained soft.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Inside the White House’s Frenetic Scramble to Avert a Full-Blown Middle East War - WSJ
- Thousands of Israelis Join Anti-Government Protests – Reuters
- Volume of Iran's Barrage on Israel Surprises United States – JP
- Palestinians Go on Strike in West Bank to Protest Deadly Raid - NYT
- Supreme Leader Khamenei Says Iran Demonstrated its Power Against Israel - Reuters
- Israeli Strikes on Southern Gaza city of Rafah Continue – Politico
- 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
- Russia Says it Has Taken Bohdanivka in Eastern Ukraine – Reuters
- Russian Black Sea Fleet Targeted in Missile Attack - Newsweek
- U.S. Aid Is a Lifeline for Ukraine’s Struggle to Hold Off Defeat - WSJ
- Russia Says Deeper U.S. Hybrid War Using Ukraine Will End in Vietnam-Style Humiliation - CNBC
- NATO Has Air Defense Systems Ready for Ukraine, Stoltenberg Says - Politico
- Moscow Says 50 Ukrainian Dones Shot Down as Attacks Spark Fires at Russian Power Stations
- Russian Losses in Ukraine on Course To Far Outstrip 2023 Total – Newsweek
- 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
- G7 gives Iran Sharp Warning Not to Send Ballistic Missiles to Russia - Politico
- Greek Economy Surges After Decade of Pain - Reuters
- U.S.-China Internet War Intensifies as House Passes TikTok Ban - WSJ
- Sexual Assaults Rise in Central African Republic. Wagner, Bandits and Even Peacekeepers are Blamed - AP
- Global 2024 Elections Threaten Supply Chain – Material Handling & Logistics
- India to Rerun Election at 11 Places in Manipur After Violence - Reuters
- U.S. Says Oil Companies in Venezuela Can Still Operate Despite Regime Oppression - WSJ
- Blinken Heads Back to China, With a Threat Over Military Aid to Russia - Politico
- BOJ's Ueda Says 'Very Likely' to Hike Rates if Inflation Keeps Rising – Reuters
Policy and Politics
State Legislature Finishes Passing the Budget – Here’s What’s In It
It’s nearly three weeks late, but the $237 billion state budget has finally been passed. State lawmakers wrapped up voting on the ten budget bills Saturday afternoon. The process was held up by negotiations around a number of contentious issues, perhaps most notably housing. In the end, state leaders agreed to a package of bills that creates a new incentive program for developers to build affordable housing in New York City and implement a version of “good cause” eviction tenant protections. Other sticky issues got thrown into the mix late in the game, like an extension of mayoral control of New York City schools.
- Education Funding will remain the same as the Governor’s proposal to end the “Hold Harmless” provision was removed.
- The Manufacturing Intermediary Apprentice Program (MIAP) was funded at the same level as last year.
Plenty of other items also made it into the budget, like plans to combat retail theft and illegal cannabis stores, changes to a popular home care program and an expansion of take-out cocktails. Here are the key policies included in this year’s state budget.
House Approves Aid for Ukraine, Israel After Bitter Battle
House lawmakers in both parties joined forces Saturday to pass a massive package of foreign, ending a long and bitter stalemate over the fate of the legislation and all but ensuring the delivery of billions of dollars in new help to embattled allies across the globe. The rare weekend votes were the culmination of months of fierce debate within the House GOP conference over how — or even if — Congress should step in with another round of military help for Ukraine, Israel and Taiwan while providing humanitarian aid for civilian victims in Gaza and other war-torn regions around the globe. The package now goes to the Senate, which is expected to pass it in the middle of next week.
In the end, Speaker Mike Johnson (R-La.) defied his conservative critics, pushing to the floor a series of four bills providing the overseas assistance but detaching those funds from a separate border security bill, which failed on the floor during Saturday’s votes. He framed the aid as a simple, but crucial, continuation of America’s responsibility to democratic allies under siege from despots. “I think providing lethal aid to Ukraine right now is critically important,” Johnson said this week. “I really do believe the intel and the briefings that we’ve gotten. I believe Xi and Vladimir Putin and Iran really are an axis of evil.”
US Deficit Poses ‘Significant Risks’ to Global Economy, Warns IMF
The fund said in its benchmark Fiscal Monitor that it expected the US to record a fiscal deficit of 7.1 per cent next year — more than three times the 2 per cent average for other advanced economies. It also raised concerns over Chinese government debt, with the country set to record a deficit of 7.6 per cent in 2025 — more than double the 3.7 per cent average for other emerging markets — as Beijing copes with weak demand and a housing crisis.
The US and China were among four countries the fund named that “critically need to take policy action to address fundamental imbalances between spending and revenues”. The others were the UK and Italy. Rampant spending by the US and China in particular could “have profound effects for the global economy and pose significant risks for baseline fiscal projections in other economies”, the IMF said.
Read more at The Financial Times
Health and Wellness
5 Strategies for Improving Mental Health at Work
While benefits and conversations around mental health have changed, workplace cultures haven’t caught up. Workplace mental health expert Natasha Bowman also shared that while a high level of empathy and compassion emerged during the pandemic, she’s seeing a shift back to pre-pandemic habits, including rollbacks of well-being initiatives. People are not responding well. “Today, workers demand more than just a paycheck — they demand respect for their mental health needs. It’s not just about ticking off boxes, it’s about creating a culture where employees feel empowered to prioritize self-care without fear of repercussions,” said Bowman.
To address this critical moment for companies and employees, Author Mora Aarons-Mele shares her state of workplace mental health — culled from what she’s learned from wise colleagues and from hundreds of keynotes and conversations on workplace mental health since the launch of her book — as a path forward. Here are some of her strategies.
Read more at Harvard Business Review
NYS COVID Update
The Governor updated COVID data for the week ending April 19th.
Deaths:
- Weekly: 32
- Total Reported to CDC: 83,214
Hospitalizations:
- Average Daily Patients in Hospital statewide: 461
- Patients in ICU Beds: 53
7 Day Average Cases per 100K population
- 2.4 positive cases per 100,00 population, Statewide
- 3.2 positive cases per 100,00 population, Mid-Hudson
Useful Websites:
Election 2024
- Election 2024: Democrats Far Outpace Republicans in 19th, 18th Congressional District Fundraising – Kingston Freeman
- GOP Vice Presidential Hopefuls Look for Trump’s Golden Ticket – The Hill
- The Wealth Effect Can Prop Up the Economy — and Maybe Swing Elections - Marketplace
- 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
Third Temporary Commercial Shipping Channel Opens Around Site of Key Bridge Collapse
A temporary channel northeast of the main shipping lanes on the Patapsco River has been established and will provide limited access to the Port of Baltimore for commercially essential vessels, the Unified Command, which is overseeing the salvage work on the river, said Friday night. U.S. Coast Guard Capt. David O’Connell, captain of the port and federal on-scene coordinator for the Key Bridge response, said the Fort Carroll temporary alternate channel is expected to help restore roughly 15% of the pre-collapse commercial activity to the port.
The channel has a depth of 20 feet, a 300-foot horizontal clearance, and a vertical clearance of 135 feet. It is designed to facilitate additional commercially essential vessel traffic through the port. The third temporary channel is marked with government-lighted aids to navigation and will be limited to transit at the discretion of the captain of the Port of Baltimore. Col. Estee Pinchasin, commander of the USACE’s Baltimore district, said the full channel will be open by the end of May with a depth of 50 feet.
Biden Plans Syracuse Trip to Announce Micron CHIPS Funding
President Joe Biden plans to visit Syracuse this week to celebrate the deal to provide Micron Technology with $6.1 billion in federal aid. Part of which is for a massive complex of computer chip plants in Clay. Biden’s White House is scouting locations for a possible event April 25 in Syracuse, according to two sources briefed on the early plans. A White House spokeswoman said Thursday she could not confirm that Biden plans to travel to Syracuse next week. Biden is a 1968 graduate of Syracuse University’s law school.
U.S. Sen. Charles Schumer and a senior Biden administration official said Wednesday that federal officials reached a preliminary agreement with Micron to provide the funding from the CHIPS and Science Act. Micron said it planned to build out the complex over the next 20 years. When fully built, the company said it would directly employ 9,000 people and create about 40,000 spinoff jobs at suppliers and other companies.
VW Workers in Tennessee Vote to Join UAW Union
The United Auto Workers has broken a decades-long string of frustration as workers at the Volkswagen auto plant in Chattanooga, Tennessee overwhelmingly voted to come under union representation, the first foreign-owned U.S. plant to do so. The vote was administered by the National Labor Relations Board which, late Friday, reported a final tally of 2,628 yes votes and 985 voting no.
Three ballots were void and seven were not counted because “they aren’t determinative to the outcome of the election,” according to NLRB spokeswoman Kayla Blado. There were 4,326 workers eligible to vote in the balloting, which took place Wednesday through Friday evening. “Volkswagen thanks its Chattanooga workers for voting in this election,” the automaker said in a release that confirmed the outcome of the vote.
Strained Affordability Continues to Weigh on Existing Home Sales
Existing-home sales slipped in March, according to the National Association of REALTORS®. Among the four major U.S. regions, sales slid in the Midwest, South and West, but rose in the Northeast for the first time since November 2023. Year-over-year, sales decreased in all regions. Total existing-home sales1 – completed transactions that include single-family homes, townhomes, condominiums and co-ops – receded 4.3% from February to a seasonally adjusted annual rate of 4.19 million in March. Year-over-year, sales waned 3.7% (down from 4.35 million in March 2023).
“Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” NAR Chief Economist Lawrence Yun said in a statement. Mortgage rates have moved back above 7%, hindering recent momentum in the housing market. Purchases of new houses have also cooled as prospective buyers move to the sidelines until financing costs ease. Other housing data this week showed builder optimism leveled off and construction starts decreased. Mortgage rates remain more than twice as high as at the end of 2021.
Tesla Spent the Weekend Cutting Prices of Cars and FSD Software
Late Saturday, the company led by Elon Musk also slashed the price of the driver assistance software that it calls FSD, or Full Self-Driving, by a third to $8,000 in the US. It had been $12,000. The promise of a fully autonomous vehicle has long been key to Tesla’s lofty valuation. In recent weeks, Tesla has rolled out new versions of the FSD software, and Musk has vowed to unveil a dedicated robotaxi on Aug. 8. Tesla’s website says that customers will receive a 30 day trial of Full Self-Driving Capability with a new vehicle purchase. The website says that “the currently enabled features require active driver supervision and do not make the vehicle autonomous.”
Earlier on the weekend, Tesla cut prices in China and the US, its two key markets, as well as in Europe, after disappointing first-quarter sales contributed to swelling inventory. In the US, the cheapest version of the Model Y is now $42,990, returning the sport utility vehicle’s starting price to the lowest it’s been. Tesla also discounted the two other more expensive versions of the Model Y by $2,000, and dropped the price of the Model X to its lowest yet. The cuts cap a wild week for the Austin-based automaker. It started when Musk announced in a memo to the company’s more than 140,000 employees that he was reducing headcount by more than 10% globally. Two top executives also left.
US Steel Shareholders Accept Nippon Steel
U.S. Steel shareholders have approved the sale of the iconic business to Nippon Steel Corp. in a $14.9-billion deal. The vote was a formality that may not speed completion of the transaction endorsed by USS directors last December. As yet, the deal has not been taken up by U.S. regulators, and that process may prolong the completion beyond the 2Q/3Q 2024 range hoped for by the Nippon and USS. According to U.S. Steel, 98% of the shares involved in the vote, and 71% of all shares, favored the acquisition. USS CEO David Burritt said the vote is “a clear endorsement that they recognize the compelling rationale for our transaction with NSC.”
The United Steelworkers of America union leads the opposition to the acquisition, and that position has verbal support from President Biden and former President Trump. While neither politician has proposed any practical alternative to the acquisition there are likely to be delays due to the evaluation process under the U.S. Dept. of Justice’s anti-trust division and the U.S. Dept. of Treasury’s Committee on Foreign Investment, which reviews foreign acquisitions. The appearance of a foreign takeover has solidified the deal’s opposition, but the motive for U.S. Steel centers more on near-term stability than on preserving a century-plus legacy.
Read more at American Machinist
Most States End Q1 on a High Employment Note
Job growth was widespread in March as 44 states added jobs over the month, the highest share since June 2023. Similar to national trends, the pace of job growth broadly picked up across states in Q1. California and New York led the nation with payroll gains of 28,300 and 23,900, respectively. Texas came in at third place with a 19,100 addition. Just six states shed payrolls over the month. West Virginia lost 2,000 jobs, and Wisconsin payrolls contracted by 1,700.
After creeping up to start the year, unemployment rates appear to be inching back down. Unemployment rates rose in eight states over the month, declined in 14 and were unchanged in 28. The count of states experiencing a trend increase in the unemployment rate fell to 19. Government, health care and leisure & hospitality sectors accounted for two-thirds of job gains in the March national employment report, and this sector strength was particularly evident for our states in focus.
Hudson Valley Employers Added 6,200 Jobs in March, + 200 in Manfuacturing
Private sector jobs in the Hudson Valley rose over the year by 8,100, or 1.0 percent, to 807,800 in March 2024. Job gains were largest in private education and health services (+9,800), leisure and hospitality (+3,700) and financial activities (+1,100). Job losses were greatest in professional and business services (-2,400), trade, transportation and utilities (-2,300), manufacturing (-900), mining, logging and construction (-600) and information (-300).
In March 2024, the region’s private sector employment count reached 807,800 – a record high for the month. While the over-the-year picture remained positive, the pace of job growth has slowed down. Nevertheless, two sectors posted year-over-year gains of at least 4.3 percent. Aided by strength in its health care and social assistance component, the region’s private education and health services sector climbed 4.5 percent – its fastest year-over-year March growth on record. Year-over-year manufacturing employment declined by 900 jobs or 2.1%.
Read The Labor Market Profile
Wind Workforce Gap Puts Green Energy Goals at Risk
The US could have a shortage of up to 124,000 wind energy workers by 2030 unless the sector invests in training and education to plug the looming workforce gap, according to a report from the National Renewable Energy Laboratory. "As we strive to achieve a 100% net-zero-carbon economy by 2050, it's more important than ever to connect the dots between education, training, entry-level jobs, and long-term careers in the clean energy sector," says Jeremy Stefek, one of the report's authors.
Despite its projected shortage of wind energy workers in the coming decades, the NREL report identifies strategies to close the wind energy workforce gap. Developing a properly trained and adequately sized workforce will require stakeholders to: Raise awareness. Increase training. Create connections, and Emphasize inclusivity. “Our research underscores the need to support increased education and training while improving student perception of wind energy career opportunities to lessen the wind workforce gap,” Stefek said.