Member Briefing April 9, 2024
NFIB: Small Business Job Openings Fall to Pre-Pandemic Levels
NFIB’s monthly jobs report shows a general slowdown in employment activity for small businesses in March, with a seasonally adjusted net 11% planning to create new jobs in the next three months, down one point from February and the lowest level since May 2020.Overall, 56% of owners reported hiring or trying to hire in March, unchanged from February. Of those hiring or trying to hire, 86% of owners reported few or no qualified applicants.
Unchanged from last month, 37% (seasonally adjusted) of all small business owners reported job openings they could not fill in the current period, the lowest reading since January 2021. The percentage of small business owners reporting labor quality as their top small business operating problem rose two points from February to 18%. Labor cost reported as the single most important problem for business owners decreased by one point to 10%, only three points below the highest reading of 13% reached in December 2021. Seasonally adjusted, a net 38% reported raising compensation, up three points from February’s lowest reading since May 2021. A net 21% plan to raise compensation in the next three months, up two points from February.
Biden Announces Student Loan Debt Relief Plans for Millions
Biden administration officials on Monday unveiled the details of a new plan to forgive student loan debt, suggesting that millions of Americans could start seeing debt relief as soon as this fall. The new set of proposals have yet to be finalized. It’s President Joe Biden’s second attempt to implement broad student loan forgiveness after his first plan was struck down by the Supreme Court last summer. The president traveled to Wisconsin on Monday — a key swing state this November — to announce the plan. The plans must be finalized – a process that could take months – and must withstand any potential legal challenges.
After the Supreme Court rejected Biden’s first plan last year, the president vowed to pursue another pathway to delivering student loan debt relief. Since then, the Department of Education has been conducting a formal and lengthy process, known as negotiated rulemaking, to develop a new student loan forgiveness program. It’s a different process from what the Biden administration used in its first attempt to provide sweeping loan forgiveness, which would have canceled up to $20,000 in student loan debt for borrowers earning $125,000 or less a year.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Hamas Says Gaza Truce Talks Still Deadlocked Despite Reports of Progress - Reuters
- Qatar Cautiously Optimistic as Israel and Hamas Continue Ceasefire Talks - BBC
- Gazans Return to Scenes of Devastation in Khan Younis - BBC
- Israel Steps Up Preparation for Rafah Invasion Despite Western Warnings – Politico
- Israeli Military Says Strike Killed a Hezbollah Commander - VOA
- Hamas’s Feud With Palestinian Rivals Adds to Doubts Over Gaza’s Postwar Future - WSJ
- Israel budget deficit jumps to 6.2%/GDP in March, nears 6.6% 2024 target - Reuters
- 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
- Drone Strikes Hit Russia-Controlled Zaporizhzhia Nuclear Power Plant in Ukraine - Politico
- Ukraine Reports Downing 17 Russian Drones - VOA
- Yellen Warns of Sanctions Against Chinese Banks that Aid Russia – The Hill
- Ukraine's Energy System Stabilizes – Reuters
- Russia Ups Blame-Shifting for Terror Attack to Ukraine, Brags it’s Boosting Recruitment – Politico
- What's Behind Russian Frenzy to Blame Ukraine for Concert Attack? - BBC
- 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
- US-China Relationship on ‘More Stable Footing,’ Janet Yellen Says – Politico
- Sri Lanka, Bondholders Plan Fresh Round of Debt Talks This Month - Bloomberg
- US, Britain, Australia Weigh Expanding AUKUS Security Pact to Deter China - VOA
- US, Japan, Philippines Meet to Bolster Ties as Security Worries Mount - Reuters
- Ecuador Armed Forces to Continue Anti-Crime Operations With Police – Reuters
- Biden to Hold Joint Press Conference as Part of Japan State Visit this Week – The Hill
- EU and US Push China to Help Them Write Big New Climate Check – Politico
- Haitian Police Seize Hijacked Cargo Ship After 5-Hour Shootout - NBC
- Rwanda Genocide: World Failed Us in 1994, President Paul Kagame Says - BBC
Policy and Politics
Budget Talks: Hochul Suggests Education Foundation Aid Changes Will Wait Until Next Year
It appears the full force of Gov. Kathy Hochul’s Executive Budget proposal to end "hold harmless" won’t be felt in this year’s budget. Hold harmless prevents school districts from receiving less in Foundation Aid than the previous school year. Hochul indicated to reporters during a visit to the State Capitol’s third floor press quarters on Thursday that plans were being made to ensure the Foundation Aid formula is updated by the passage of next year’s budget.
While the state Assembly and Senate did not include the proposal to end hold harmless in their one-house budgets, few have argued Hochul’s stance that the formula is outdated, rather stressing that school districts and therefore students would suffer from ending the provision with no notice as districts work to prepare their own budgets. What the final deal will look like, and if any changes at all will be made when it comes to Foundation Aid, remains to be seen as budget negotiations continue days after the April 1 deadline.
Japan and US Seek to Strengthen Ties as Kishida Visits
Prime Minister Fumio Kishida left for Washington on Monday, becoming Japan's first leader to make a state visit to the United States in nine years and underscoring the increasing importance of the alliance between the two countries. During his stay in the United States, Kishida is scheduled to hold a summit with President Joe Biden on Wednesday in Washington and will address a joint session of the U.S. Congress the following day, according to Japanese government officials.
Kishida, who is slated to return to Tokyo on Sunday, is expected to reaffirm with Biden the significance of Japan-U.S. cooperation in various areas ranging from security and state-of-the-art technologies to the strengthening of supply chains, the officials said. "I would like to confirm that Japan and the United States have built a more solid relationship, and it will be an important opportunity to convey this message to the world," Kishida told reporters before his departure from Tokyo. Kishida has said that his state visit to the United States will help bolster the bilateral alliance, and he is to become Japan's first prime minister to deliver a speech at the U.S. Congress since Shinzo Abe, who did so in April 2015.
Congress' to-do List: Foreign Aid, Mayorkas Impeachment and Surveillance Authority
It rained plenty last week in the nation's capital during the last week of Congress' recess. But as lawmakers return, the only thing they'll find at the end of any rainbow is a cavalcade of outstanding issues to address.
- Foreign aid: Watch Speaker Mike Johnson this week for any indication of how he plans to proceed on a foreign aid package aimed at helping Ukraine and Israel, as he’s floated “innovations” to garner more GOP support for the legislation.
- DHS impeachment: The Senate returns tonight and will vote to advance the nomination of a Nebraska federal judicial nominee. However, the week's real action kicks off Wednesday, when the chamber is expected to receive the articles of impeachment against Alejandro Mayorkas.
- Surveillance authority: Over in the House, the chamber intends to move legislation to reauthorize a controversial surveillance authority, known as Section 702 of the Foreign Intelligence Surveillance Act. The House Rules Committee intends to meet on Tuesday to consider the pending bill.
Health and Wellness
US CDC Says Bird Flu Risk Low, But Asks States to be Ready With Rapid Testing
The U.S. Centers for Disease Control and Prevention (CDC) said on Monday bird flu risk to the public remains low even as it asked the state public health officials to be prepared to respond. The agency asked for plans to quickly test and provide treatment to potentially impacted farm workers following positive results among cattle herds. It also encouraged state health officials to communicate about any challenges they are facing.
The U.S. Centers for Disease Control and Prevention (CDC) said on Monday bird flu risk to the public remains low even as it asked the state public health officials to be prepared to respond. The agency asked for plans to quickly test and provide treatment to potentially impacted farm workers following positive results among cattle herds. It also encouraged state health officials to communicate about any challenges they are facing.
Election 2024
Video: Inside the Messy Battle for the Biggest Swing State of 2024 - WSJ
Here’s Where Women Voters Stand in the Biden-Trump Rematch – The Hill
Changing Israel Positions Test NY-16 House Race – Politico
Trump, Citing 'the Will of the People,' Opposes National Abortion Ban – USA Today
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
How Crews on Cargo Ships Stranded in Baltimore are Working to Maintain Good “Seafarer Culture”
The U.S. Army Corps of Engineers announced on Thursday that a permanent navigation channel to the Port of Baltimore could be re-opened by the end of May. This comes as divers are still working to assess and clear the wreckage from the collapse of the Francis Scott Key Bridge. For the time being, there are eight cargo ships stuck in the port, including the Dali, which hit the bridge. The crews on those ships are used to being docked for only a day or so. Now, they’re looking at weeks in one spot.
“Marketplace Morning Report” spoke to the port chaplain Joshua Messick who’s working to make the unexpected stay as pleasant as possible for the 159 stranded crew workers, all of whom come from outside the U.S — countries like Romania, China, the Philippines. About half have to stay on their ships all the time because they lack the proper visas to come ashore, according to Messick.
Doubts Creep In About a Fed Rate Cut This Year
After the latest blockbuster jobs report Friday showed continuing strength in the economy, more traders are betting the Fed may cut the benchmark federal-funds rate just once or twice this year, fewer than officials’ last median forecast of three quarter-point cuts. And a handful are even starting to wager that the central bank will leave rates where they are. Investors will get a new perspective on the outlook for rates this coming week with Wednesday’s release of the consumer-price index. Inflation has cooled significantly from 40-year highs, but two months of hotter-than-expected readings have helped reinforce the Fed’s wait-and-see approach to cuts.
Market-based measures of inflation are also now creeping up. Contracts tied to the CPI show inflation averaging more than 2.5% over the next five years, the highest level since November. The combination has some Fed officials saying they need to see more before acting. Minneapolis Fed President Neel Kashkari said last week that the central bank would hold off on cutting rates if inflation doesn’t subside. Dallas Fed President Lorie Logan said Friday she was concerned that inflation declines might stall and warned that it was “much too soon to think about cutting interest rates.”
German Industrial Production Beat Expectations in February
Germany’s industrial production rose more than expected in February, helped by a recovery in the construction and car industry, as the country looks to exit a recent manufacturing slump. Output of production in manufacturing, energy and construction ticked up 2.1% compared with the previous month, on a seasonally and calendar-adjusted basis, from an upwardly revised 1.3% rise in January, according to data published Monday by German statistics office Destatis.
Output in construction grew 7.9% on month in February, likely from milder weather, with the car and chemical industries also recording 5.7% and 4.6% rises respectively, Destatis said. Production in energy-intensive industrial branches jumped by 4.2% on month, while in the less-volatile measure that excludes the changeable construction and energy sectors, output rose 1.9%
ADP National Employment Report: Annual Pay was Up 5.1% in March
In March, private-sector employment increased by 184,000 jobs. This was the largest monthly gain since July 2023. The month saw a broad increase across various industries, with leisure and hospitality (+63K) recording the largest jump. On the goods-producing side of the economy, natural resources/mining added 8,000 jobs, manufacturing added 1,000 jobs, and construction leapt by 33,000 jobs. Professional/business services saw a decline in hiring, falling by 8,000 jobs.
Annual pay rose 5.1% during the month. For job-changers, year-over-year pay gains rose 10%. For job-stayers, leisure and hospitality reported the strongest year-over-year jump in pay, rising 5.8%. Construction pay rose 5.7% over the past year while manufacturing saw pay rise 4.6%.
Red Sea Shipping Diversions Are Boosting Airfreight Volumes and Rates
Retailers and manufacturers are flying more goods around the shipping crisis in the Red Sea, industry experts say, helping boost international airfreight operators after a long period of sagging cargo volumes. The strategy, the latest sign of how companies are adjusting their supply chains in response to geopolitical shock waves and disruptions, comes as European importers are seeking to avoid delays caused by longer voyages around Africa by containerships that usually travel through the Suez Canal.
Asia-Europe sea-air hubs such as Dubai; Bangkok; and Colombo, Sri Lanka, have been particularly busy since the start of the year, according to data provider WorldACD, with Dubai-to-Europe tonnages doubling in recent weeks compared with a year ago. The International Air Transport Association said Middle East-Europe trade was the world’s fastest-growing market in February, expanding 39.3% over the same month last year.
Boeing, Airbus Negotiating Split of Spirit Aero
The Boeing Co. is negotiating with its principal rival Airbus S.A. over how to divide up the assets of Spirit AeroSystems, the aerostructures manufacturer that is a supplier to both companies. Spirit AeroSystems has a market value between $3.5 and $4 billion, but no costs have been announced in connection to the ongoing discussion. Boeing’s eventual acquisition of Spirit Aero seems to be a foregone conclusion – inasmuch as the latter is a principal supplier to its 737 MAX and 787 Dreamliner programs, and has been identified in the past year as a source of many delays in the Boeing supply chain.
However, Spirit AeroSystems is also a significant supplier of aerostructures to the Airbus A350 and A220 programs, so coordinating the separation of those parts of the business is critical to any deal that would be approved by commercial aerospace regulators in the U.S. and Europe. According to one report, Boeing initially hoped to buy all of Spirit AeroSystems and then determine a fair separation of the assets, though current negotiations involve all three companies. While it’s understood that Boeing would incorporate the Spirit Aero fuselage assembly operations in Wichita, Kan., the disposition of other plants is not known. Airbus is reported to be particularly determined to gain control of Spirit AeroSystems’ Kinston, N.C., composite components plant, and an aircraft wing assembly plant in Belfast, Northern Ireland.
Read more at American Machinist
Gas Prices Surge To Six-Month High At $3.60: Here’s Why They Could Keep Climbing
The national average price for a gallon of gas hit $3.60 over the weekend before inching down to $3.58, according to GasBuddy, which compiles data from over 150,000 gas stations nationwide—though AAA pegs the national average at $3.60. That price brings the national average up 6.5 cents over the past week and 17.1 cents from a month ago, though the national average drivers are seeing at the pump is just under a cent below where it was this time last year.
The rise in prices coincides with several factors, including “extensive refinery maintenance” on the West Coast, as well as the transition to more expensive summer fuel blends, rising gasoline demand and high oil prices, according to Patrick De Haan, head petroleum expert at GasBuddy. De Haan also attributes the spike to recent production cuts by OPEC producers Russia and Saudi Arabia, as well as lingering “geopolitical escalations in the Middle East,” though he added a potential cease-fire between Israel and Hamas could provide a “glimmer of hope” amid surging oil prices.
TSMC Gets $6.6 Billion in Chipmaking Cash from Biden Pledges to Build a Third Arizona Plant
The Biden administration said Monday it plans to send up to $6.6 billion in federal grants to the Taiwan Semiconductor Manufacturing Company (TSM) as the chipmaking giant promises a $25 billion Arizona expansion that will bring a third TSMC fabrication plant to that state. In March Biden said the US would provide up to $8.5 billion in grants in the years ahead to Intel (INTC) to support a range of new projects in Arizona, Ohio, New Mexico, and Oregon.
TSMC will use the grants to fund the continued construction of two manufacturing plants already being built in the Phoenix area. The company also announced Monday it would build a third facility there in the years ahead. The goal is for all three plants to be online and producing TSMC's most advanced chips by the end of the decade. Some of the plants even hope to use a forthcoming 2-nanometer fabrication process and make even more advanced chips than are currently available.
DOE Invests in Critical Minerals Supply Chain
On April 2, the U.S. Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management today announced $75 million for a project to develop a Critical Minerals Supply Chain Research Facility. DOE expects that the Critical Materials Supply Chain Research Facility will support other on-going government initiatives, such as the Critical Materials Collaborative and Critical Materials Innovation Hub, along with the overall DOE-wide critical mineral and material goals of diversifying and expanding supply, developing alternatives, improving efficiencies across the supply chain, and enabling a circular economy.
A supply chain assessment in June 2021 found that over-reliance on foreign sources and adversarial nations for critical minerals and materials poses national and economic security risks. These findings were consistent with identified risks for supply chain disruption found in DOE material strategies and criticality assessments, in the United States Geological Survey critical mineral lists in 2018 and 2022, and the recently released DOE Critical Materials Assessment.
Read more at Material Handling & Logistics