Member Briefing August 23, 2023
Siena Poll Finds Hochul Favorability at All-time Low With NY Voters, Migrant Influx “Serious Problem”
Voters say 82-16% that the recent influx of migrants to the state is a serious problem, with 54% saying very serious. By a 46-32% margin, they say that migrants resettling in New York over the last 20 or so years has been a ‘burden,’ not a ‘benefit’ to the state. And by 58-36%, voters say New Yorkers have already done enough and should now work to slow the flow, rather than accepting new migrants and working to assimilate them into New York, according to a new Siena College poll of registered New York State voters released Tuesday. More Findings:
Governor Kathy Hochul has a 40-46% favorability rating, down from 42-43% in June.
Her job approval rating stands at 46-46%, down from 48-44% in June, and 56-36% in January.
Biden Leads Trump 47-34% (50-28% in June).
Biden 46-50% Favorability, 1st Time Negative.
39% think the state is on the right track, 48% say it’s headed in the wrong direction.
Senator Kirsten Gillibrand’s favorability rating is 39-28%, little changed from 41-31% in June.
War in Ukraine Headlines
Existing Home Sales Fall in July as Higher Mortgage Rates Continue to Bite
Existing home sales declined 2.2% during July, the second straight monthly decline. Since existing home sales reflect contract closings, July's data largely reflect activity in June when mortgage rates averaged 6.8%. So far in August, the average 30-year mortgage rate has marched even higher, climbing back above 7%. The last time mortgage rates exceeded 7% was in 2022 when housing activity declined sharply.
The resale market is still constrained by a lack of inventory; however, the supply picture improved slightly during the month. Total resale inventory rose 3.7% to 1.11 million in July. This translates to 3.3 months' supply at the current sales pace, up from 3.1 months in June. The ongoing resale supply shortage is primarily owed to the vast majority of mortgage holders carrying a rate well below those which prevail currently. The effective rate on total outstanding mortgage debt is 3.6% as of Q2-2023, significantly below current mortgage rates. The recent leg up in rates will likely further discourage prospective sellers from listing their homes for sale, which means inventories are likely to remain low for the foreseeable future.
AI Likely to Augment Rather than Destroy Jobs: UN Study
The launch in November of the generative AI platform ChatGPT, which is capable of handling complex tasks on command, was seen as a tech landmark foreshadowing a potentially dramatic transformation of the workplace. But a fresh study from the United Nations' International Labor Organization (ILO) examining the potential effect of that and other platforms on job quantity and quality suggests that most jobs and industries are only partially exposed to automation.
The study found that clerical work was the category of jobs with the greatest technological exposure, with nearly a quarter of tasks considered highly exposed and more than half of tasks having medium-level exposure. In other occupational groups, including managers and technicians, only a small share of tasks was found to be highly exposed, while around a quarter had medium exposure levels, the ILO said. The analysis also found that a full 5.5% of total employment in high-income countries was potentially exposed to the automating effects of generative AI, whereas only 0.4% of employment in low-income countries was.
COVID Update - New Variant Drives up COVID-19 Hospitalizations in New York
A new COVID-19 strain is throwing a monkey wrench into the end of the summer and start of school. The most recent variant, dubbed EG.5, has led to an uptick in COVID-19 cases across New York state, and health experts are investigating. According to estimates from the Center for Disease Control and Prevention, EG.5 was responsible for a little more than 20% of COVID-19 cases in the U.S. at the end of the third week of August, more than any other strain. “The number of people being admitted to the hospital for COVID illness is increasing," Stephen Thomas, director of the Institute for Global Health at SUNY Upstate Medical University said. "Also, the number of staff that are out of work because of COVID illness is increasing."
According to New York state’s COVID-19 hospitalization summary, there have been an increase of 282 COVID-related hospitalizations to a total of 926 from the beginning of August to Aug. 18. For context there were more than 18,000 in April 2020 and more than 12,000 in January 2021. But is this strain more severe than others? “We really do not have an answer, definitive answer, to that right now," Thomas said.
4 Reasons Bond Yields Are Rising
In a year full of surprises in the markets, there’s been a new one in recent weeks: a spike in bond yields. On the surface, it would seem there has been good news for the bond market lately. Still, bond yields—which move in the opposite direction of bond prices—turned sharply higher starting midway through July. Most notably, the yield on the U.S. Treasury 10-year note, which serves as an important benchmark for home mortgages, has risen to its highest level since late 2007. The 10-year note is yielding 4.3% as of Aug. 18, up from 3.8% on July 18.
Why the sudden sell-off? Bond watchers point to four key factors pushing prices lower and yields higher: Increased U.S. Treasury debt issuance; The Bank of Japan losing its grip on low interest rates; A hot U.S. economy; A higher inflation premium. Despite the recent push higher in bond yields, many in the market are still expecting these yields to move lower (and prices higher) heading into 2024. Meanwhile the 30 year mortgage hit 7.48% Tuesday.
Manufacturers Remain Committed to DEI, Report Shows
Nearly three-quarters of manufacturing executives say diversity remains important for their company, according to a recent survey conducted by The Manufacturing Institute (MI) and Washington, D.C., consulting firm Keybridge. “What I’m hearing from companies is that they are going to be looking for ways to make sure that they are able to continue with their D and I practices and their activities,” said Carolyn Lee, president and executive director of the MI.
With 2.1 million manufacturing jobs expected to go unfilled in the next decade, the MI and Keybridge report, “Diversity, Equity + Inclusion: Benchmarking in Manufacturing,” says the initiatives don’t just create goodwill — they’re good business. Seventy-two percent of respondents surveyed in for the May 2023 report said they strongly or somewhat agree that diversity is a key focus of their company, compared with 64 percent who reported the same sentiment in October 2021, when the MI and Keybridge released their first survey on DEI.
Major Shipping Routes are Struggling With Water Shortages. El Niño Could Make it Worse
An increasing number of climate-driven extreme weather events is taking its toll on the world’s major shipping routes — and El Niño could make matters worse.El Niño — or “the little boy” in Spanish — marks the unusual warming of the surface waters in the tropical central and eastern Pacific Ocean. It is a naturally occurring climate pattern which takes place on average every two to seven years. The effects of El Niño tend to peak during December, but its full impact typically takes time to spread across the globe.
In drought-stricken Panama, low water levels have prompted the Central American country to reduce the number of vessels that pass through the critically important Panama Canal. Low water levels on the Rhine River, an important trade route that runs through Germany via European cities to the port of Rotterdam in the Netherlands, is also of concern.
Car Prices Remain Stubbornly High
If you’ve been in the market for a car in the last few years, this is probably not news to you: Vehicles have gotten way more expensive. $20,000 used to be the starting point for a new one. Now there’s only one remaining model on the market that sells for around that figure — the Mitsubishi Mirage. And between inflation and high interest rates, consumers are having a harder time paying for their cars. Auto loan delinquency rates have risen to Great Recession levels. Will that push carmakers to lower their prices?
More consumers and carmakers are focused on bigger, more expensive cars. And with the pandemic chip shortage, the average price of a vehicle has ballooned to $50,000. That’s $10,000 more than it was five years ago, according to Gartner analyst Mike Ramsey. Plus, he said, high interest rates mean car payments for the average vehicle have gone up more than $100 a month. Meanwhile, used car prices are not looking much better. That’s because demand is still high and supply is low. Fewer new cars were sold over the last couple years, so there are fewer used cars on the market.
Japan to Release Fukushima Waste Water Into the Ocean Starting on Thursday
said on Tuesday it will start releasing more than 1 million tonnes of treated radioactive water from the wrecked Fukushima nuclear power plant on Thursday, putting into motion a plan that has drawn strong regional criticism. The long-telegraphed plan has been sharply criticised by Japan’s neighbours South Korea and China – and it also has been the subject of intense scrutiny at home. Local fishing groups say they fear reputational damage and a threat to their livelihood as a result of the plan, which was first approved by Tokyo two years ago.
The UN’s nuclear watchdog approving the plan however, Critics have expressed scepticism over the safety of discharging more than 1 million tonnes of treated radioactive water into the Pacific Ocean.
BRICS Seeks to Become a G7 Rival, Meet in Johannesburg
The 15th summit of the BRICS—a club made up of Brazil, China, India, Russia and South Africa—opened in Johannesburg in South Africa on Tuesday. Its members want to be regarded as a rival to the G7, a group of rich countries. They now contain 41% of the world’s population and produce 26% of its GDP. The bloc, which has its origin in an acronym thought up in 2001 by a British economist for an American bank, sees itself as the pre-eminent forum for criticism of the Western-led international order.
Whether it can create an alternative order is unclear. The five members are very different politically and economically, and are divided over the group’s future. Russia and China would like the bloc to add countries and to criticise America more. Brazil, India and South Africa—all democracies—endorse diplomatic neutrality and are wary of enlargement. Such disunity means that the BRICS will have less global clout than they hope to.
American Airlines’ Pilots Ratify Contract With Big Pay Boost
American’s pilots are the latest to win big wage increases and other improvements as the industry grapples with a shortage of aviators and a strong recovery in travel demand. Carriers have been under pressure to offer pilots at least as much as competitors, and talks often hit snags in recent months as pilots held out for better deals that offered improvements in schedules and vacation policies as well as pay.
Combined with boosted 401(k) contributions and expected pay increases to match rivals, American pilots’ compensation will increase by more than 46% during the contract’s duration. The pilots will get an immediate raise of 21% in addition to improvements to sick leave and other terms.
Stickley CEO: Hiring Refugees is Good for People, Good for Business
Skilled labor is hard to come by for American furniture companies making their furniture here in the U.S. To compensate, they’ve raised wages and benefits while reducing overtime. To boost the number of applicants, companies have increased spending on advertising and community spending. Some have worked to create focused outreach at nearby community colleges. Others, like Vanguard Furniture, have set up manufacturing operations in areas it knew were home to a reliable working population. Stickley, a historic New York high-end furniture manufacturer, went a different route.
It began tapping into the large population of refugees living around its hometown. “Our very first hire happened in the early 1980s when our church sponsored a family from Laos,” said Aminy Audi, Stickley CEO. “The congregation was asked if anyone could provide work for the father, and my husband and I immediately offered him a job at the factory. He stayed for 20 years. Since then, we’ve worked with various refugee resettlement groups, including Interfaith Works and Catholic Charities.” Stickley, founded in 1900 and bought by Audi and her late husband Alfred in 1974, employs around 1,600 people in total. Over the past 40 years, Audi says the company has hired thousands of refugees, today making up nearly 50% of its workforce in Manlius, N.Y., and stretching across 23 nationalities.
More Companies are Offering Unlimited Vacation to Stay Competitive
A growing number of companies are offering the benefit of unlimited paid time off, in part to stay competitive in a tight hiring market. Some call it “flexible PTO.” Basically, it means there’s no hard and fast limit on how much paid leave an employee can take or when they take it. But to be clear, “unlimited PTO” isn’t a free-for-all.
A couple of years ago, Patrick Weber took a job as an analytics engineer for a startup tech company that offers unlimited vacation. Generally, he considered it a “nice perk.” But Weber said he’s been working long enough to know that it can be tough to balance his responsibilities with actually going on vacation. It demands more self-discipline, Weber said, to take leave when it isn’t a required or prescribed amount of time. “So, like, you can’t just show up once a week, every once in a while type of thing,” he explained. Weber’s company told him three or four weeks of vacation a year would be “appropriate.” There’s wiggle room though, and he does appreciate that flexibility.