Member Briefing April 3, 2023

Posted By: Harold King Daily Briefing,

February PCE Price Index Shows Inflation Keeps Cooling. It’s Still High.

The Federal Reserve’s preferred inflation gauge climbed at a 0.3% monthly pace in February, marking a slight slowdown from the month before as pricing pressures show signs of gradually easing. The core personal consumption expenditures price index increased 4.6% in February from a year earlier, the Commerce Department reported Friday, compared to January’s 4.7% annual pace. Economists had expected core prices to rise at a 0.4% monthly pace in February and to match January’s annual increase.

The rate of inflation for services—a stubborn category that has become a focus for the Fed—came in higher than the number for goods. The latest inflation data comes from before Silicon Valley Bank collapsed, so it doesn’t reflect any economic slowdown or tightening of credit conditions that has occurred since the turmoil in banking began earlier this month. The PCE data for March, due in late April, will show the impact of those developments, if there is any.

Read more at Barron’s

War in Ukraine Headlines


The Final Estimate for Q4 GDP Shows the US Economy Grew at 2.6%

The US economy grew at a slower pace in the fourth quarter than initially estimated, as consumer spending continued to trail off. Inflation-adjusted gross domestic product — the broadest measure of economic activity — increased 2.6% for the final three months of 2022, according to the Commerce Department’s third and final reading for the quarter. Economists were expecting GDP growth to hold steady at 2.7%, according to Refinitiv.

In the Commerce Department’s first two reads of fourth-quarter GDP, the growth was initially estimated at 2.9%, then revised down last month to 2.7%. Concurrently, consumer spending trended down as well, decreasing from 2.1% in the first read to 1.4% in the second revision and landing at 1% in the final print, released Thursday morning. Oxford Economics is projecting 2.5% GDP growth during the first quarter of the year and a mild recession to occur in the second half of 2023.

Read more at CNN

US Chamber/Met Life Index Down Slightly as Small Businesses See Weaker Economy

Only one in five small businesses believe the U.S. economy is in good health and Small business owners’ perceptions of their access to capital have declined over the last five years according to the latest MetLife and U.S. Chamber Small Business Index. About half (49%) of small business owners surveyed say their current access to capital or loans is good.

The data also shows that compared to a year ago, more small business owners are turning to personal savings to fund their businesses. Larger small businesses report better access to capital. Nearly three in four (73%) small businesses with 20-500 employees say they have good access to capital, compared to 55% of those with 5-19 employees, and 41% of those with fewer than five employees. The data on access to capital comes as just one in five (20%) small business owners surveyed saying they believe the U.S. economy is in good health, falling from 27% saying the same last quarter.

Read more at Reuters

COVID News – Paxlovid Reduces the Risk of Getting Long COVID

In a large study of veterans’ medical records, Paxlovid lowered a person’s chance of landing in the hospital or dying from all causes in the six months following a COVID-19 infection. And the drug reduced the risk of developing 10 of 13 long-term health problems, researchers report March 23 in JAMA Internal Medicine. On average, the drug lowered the relative risk of developing the conditions by 26 percent, says Ziyad Al-Aly, a clinical epidemiologist at Washington University School of Medicine in St. Louis.

The antiviral drug provided protection against some heart problems, blood clots, kidney damage, muscle pain, fatigue, shortness of breath and two neurological conditions. But it did not lessen the chance of developing liver disease, cough or of getting diabetes after a COVID infection. Paxlovid, made by the pharmaceutical company Pfizer, has previously been shown to reduce the chance that susceptible people will be hospitalized or die from COVID.

Read more at Science News

NYS COVID Update – (Now Reporting Weekly)

The Governor updated COVID data for the week ending March 31.


  • Weekly: 70 (Note change in reporting period)
  • Total Reported to CDC: 79,181


  • Average Daily Patients in Hospital statewide: 1,091
  • Average Daily Patients in ICU Statewide: 126

7 Day Average Cases per 100K population

  • 09 positive cases per 100,00 population, Statewide
  • 93 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

What Has Driven the Labor Force Participation Gap since February 2020? Demographics.

The U.S. labor force participation rate (LFPR) currently stands at 62.5 percent, 0.8 percentage point below its level in February 2020. This “participation gap” translates into 2.1 million workers out of the labor force. In this post, economists from the NY Fed evaluate three potential drivers of the gap: First, population aging from the baby boomers reaching retirement age puts downward pressure on participation. Second, the share of individuals of retirement age that are actually retired has risen since the onset of the COVID-19 pandemic. Finally, long COVID and disability more generally may induce more people to leave the labor force.

The authors find that nearly all of the participation gap can be explained by population aging, which caused a significant rise in the number of retirements. Higher retirement rates compared to pre-COVID have had only a modest effect, while disability has virtually no effect.

Read more at The NAM

OPEC+ Announces Surprise Oil Output Cuts

Saudi Arabia and other OPEC+ oil producers on Sunday announced further oil output cuts of around 1.16 million barrels per day, in a surprise move that analysts said would cause an immediate rise in prices and the United States called inadvisable. The pledges bring the total volume of cuts by OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, to 3.66 million bpd according to Reuters calculations, equal to 3.7% of global demand.

The latest reductions could lift oil prices by $10 per barrel, the head of investment firm Pickering Energy Partners said on Sunday, while oil broker PVM said it expected an immediate jump once trading starts after the weekend. "I expect the market to open several dollars higher ... possibly as much as $3," said PVM's Tamas Varga. "The step is unreservedly bullish." "OPEC is taking pre-emptive steps in case of any possible demand reduction," Amrita Sen, founder and director of Energy Aspects, said.

Read more at Reuters

The New York State Budget Will Be Late (again), Gov. Hochul Says

Gov. Kathy Hochul and legislative leaders made clear on Thursday that a final spending plan won’t be in place ahead of the start of the state’s fiscal year this Saturday, acknowledging they remain at odds over issues like Hochul’s controversial housing plan and her proposal to once again scale back the state’s 2019 bail reforms. It will mark the second consecutive year that Hochul and lawmakers missed the April 1 deadline.

“It’s becoming clear that the budget will not be meeting the April 1 deadline, but as I have said all along, it's not about a race to a deadline, it's about a race to getting the right results,” Hochul said Thursday in an interview with New York State Public Radio’s Karen DeWitt. While the practical effects of a slightly late budget are minimal, the symbolism may be greater. Blowing past the budget deadline doesn’t send a good message to state taxpayers, said Senate Minority Leader Rob Ortt, a western New York Republican.

Read more at Gothamist

US Consumer Confidence Unexpectedly Rises in March: Survey

 U.S. consumer confidence rose unexpectedly in March but remains below last year's average, according to survey data released Tuesday. The climb adds to pressure on the Federal Reserve as it looks to control rising prices. The closely watched consumer confidence index increased in March to 104.2 from 103.4 last month, The Conference Board said in a statement. The release was higher than the median expectation of analysts in a survey.

"The gain reflects an improved outlook for consumers under 55 years of age and for households earning $50,000 and over," said Ataman Ozyildirim, senior director for economics at The Conference Board. But he warned that, "while consumers feel a bit more confident about what's ahead, they are slightly less optimistic about the current landscape." Consumers intend to spend less on highly discretionary categories such as visiting amusement parks and dining, he said.

Read more at IndustryWeek

OSHA to Expand the Use of Instance-by-Instance Penalties

A new OSHA policy has gone into effect expanding penalties for instance-by-instance (IBI) citations. The move has the potential to significantly increase the monetary penalty amounts associated with certain violations and signals OSHA’s stated commitment to increased enforcement in 2023 and beyond. IBI citations are those for which OSHA could issue multiple citations, with corresponding penalties, for each instance of alleged non-compliance—separate penalties for each machine, each location, each entry, each employee.

Under OSHA’s prior policy, which was in place since 1990, OSHA would only apply IBI penalties for willful citations, or situations when an employer knowingly fails to comply with a legal requirement or acts with plain indifference to employee safety. The areas of focus listed in the new policy are common standards applicable across the manufacturing industry. In addition, many of them regularly appear on OSHA’s top 10 list of most cited standards.

Read more at EHS Today

Exodus From America’s Big Cities Slowed Last Year as Pandemic Receded

Big cities lost fewer residents last year as more immigrants moved in, fewer people died and more babies were born there, according to new census data that shows the urban exodus that gained steam early in the pandemic is cooling. The suburbs of big cities and small and medium-size metropolitan areas continued to claim most of the country’s growth, according to a Wall Street Journal analysis of population estimates released Thursday for the year that ended June 30. Rural areas and small towns collectively remained nearly flat.

After a sharp falloff in immigration at the peak of the pandemic, the latest data shows a revival that has helped bolster large urban counties, with about 500,000 net arrivals from abroad last year. The New York metro area, the nation’s most populated, saw its population decline 0.8% in the most recent year’s data. The second- and third-biggest metro areas, Los Angeles and Chicago, saw similar percentage declines.

Read more at The WSJ

Americans Are Losing Faith in College Education, WSJ-NORC Poll Finds

A majority of Americans don’t think a college degree is worth the cost, according to a new Wall Street Journal-NORC poll, a new low in confidence in what has long been a hallmark of the American dream.  The survey, conducted with NORC at the University of Chicago, a nonpartisan research organization, found that 56% of Americans think earning a four-year degree is a bad bet compared with 42% who retain faith in the credential.

Skepticism is strongest among people ages 18-34, and people with college degrees are among those whose opinions have soured the most, portending a profound shift for higher education in the years ahead.  In 2013, 53% of Americans were bullish on college, and 40% weren’t. In 2017, 49% of Americans thought a four-year degree would lead to good jobs and higher earnings, compared with 47% who didn’t.

Read more at the WSJ

US Unveils Stricter EV Tax Credit Rules to Take Effect April 18

The U.S. Treasury Department on Friday unveiled stricter electric vehicle tax rules that will reduce or cut tax credits on some zero-emission models but grant buyers another two weeks before the new requirements take effect. The rules are aimed at weaning the United States off dependence on China for EV battery supply chains and part of the effort to make 50% of U.S. new vehicle sales by 2030 EVs or plug-in hybrids.

The $430 billion Inflation Reduction Act (IRA) signed by Biden in August eliminated manufacturer's EV sales caps but imposed new conditions on EV credits. They included a North American assembly requirement from August, price and buyer income eligibility caps from Jan. 1, and now the battery and critical minerals sourcing rules, effective April 18. Alliance for Automotive Innovation CEO John Bozzella said in a statement his best guess is "few" EVs on the market will qualify for the full $7,500 credit after April 17. He noted the requirement EVs be assembled in North America to qualify for any credit eliminated 70% of models.

Read more at Yahoo

Jobless Claims Edge Up to 198,000

Initial filings for unemployment insurance ticked higher last week but remained generally low in a tight labor market. Jobless claims for the week ended March 25 totaled 198,000, up 7,000 from the previous period and a bit higher than the 195,000 estimate, the Labor Department reported Thursday. Though the number was slightly higher than expectations, the total indicates that companies are slow to lay off workers despite expectations that the unemployment rate will rise through the year.

Continuing claims, which run a week behind, edged up 4,000 to 1.689 million. That was below the FactSet estimate for 1.6935 million. The four-week moving average of weekly claims, which smooths volatility in the numbers, rose slightly to 198,250, but has been below 200,000 since mid-January.

Read more at CNBC

Inflation by Nation

Germany Price growth in Europe's largest economy eased to 7.4 percent year-on-year this month, according to preliminary data from federal statistics agency Destatis. In January and February, Germany's inflation rate had held steady at 8.7 percent. While food prices continued to show "above-average growth" this month, the increase in energy prices had "slowed considerably" compared with March 2022. -  The Local

Spain Spain's consumer price inflation slowed to 3.3% in March, its weakest annual rate since August 2021 and down from 6.0% in February, preliminary data from the National Statistics Institute showed on Thursday. - Reuters

France French inflation slowed in March, official data showed Friday, joining other eurozone countries in reporting an easing of price increases. Inflation reached 5.6 percent year-on-year in March, down from 6.3 percent in February, according to the INSEE statistics institute. An easing of energy prices helped to bring down inflation in the eurozone's second-biggest economy, but food prices jumped by 15.8 percent. - Barron’s

Boeing, NASA Delay Launch for Starliner Mission

The National Aeronautics and Space Administration and Boeing Defense, Space and Security are delaying a manned-flight with Boeing’s CST-100 Starliner space capsule, from April until at least until July 21, according to reports. The Starliner is a reusable aircraft intended to transport crewmembers to low-Earth-orbit destinations, such as the International Space Station.

NASA’s Commercial Crew Program manager for the Starliner Steve Stich appeared to minimize the significance of the delay in comments to the media on Wednesday. “The Starliner spacecraft is in really good shape,” Stich said. He also said the capsule is “largely ready for flight.” In 2011 NASA hired Boeing as well as SpaceX to develop transport systems for its Commercial Crew Program, to carry astronauts to the ISS. Boeing designed the CST-100 to hold seven passengers, or a combination of crew members and cargo.

Read more at American Machinist