Member Briefing August 29, 2022
At Jackson Hole Retreat Powell Says Fed Must Show Resolve in Fighting Inflation
The Federal Reserve must continue raising interest rates and hold them at a higher level until it is confident inflation is under control, Chairman Jerome Powell said in a widely anticipated speech Friday. They are likely to weigh whether to raise rates by half point or 0.75 point at their next meeting, Sept. 20-21, after reaching consensus this summer that rates would need to reach levels that slow the economy’s growth to damp investment, spending and hiring.
While the central bank’s steps to slow the rate of investment, spending and hiring “will bring down inflation, they will also bring some pain to households and businesses,” Mr. Powell said in a speech at the Kansas City Fed’s annual symposium in Wyoming. “Those are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – The Guardian
- Are Sanctions on Russia Working? – The Economist
- How Ukraine is Using Resistance Warfare Developed by the US to Fight Back Against Russia – CNN
- Russia, Ukraine Trade Claims of Nuclear Plant Attacks – NPR
- Russia Doesn’t Acknowledge Radiological Risk at Ukraine Nuclear Power Plant, U.S. Says – Reuters
- Ukraine Has Strategic Advantage Over Russia: Petraeus – Yahoo
- Putin Orders Benefit Payments for People Arriving in Russia from Ukraine – Reuters
- Ukraine and Russia Both Need More Soldiers – The Economist
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
2Q GDP Revised Upward, But Still Negative
The U.S. economy contracted in the second quarter, but at a rate that was less than originally estimated, the Bureau of Economic Analysis reported on Thursday. The upward revision confirms that the economy suffered two consecutive quarters of contraction this year, what some people consider a recession though that is not a formal definition. However, the improvement reported Thursday means that talk of recession may be muted for now.
The improved second estimate put the decline in the nation’s gross domestic product in the second quarter at 0.6%, an improvement over the 0.9% initially reported. The first-quarter decline of 1.6% remained unchanged. Much of the revision came from better data on consumer spending.
Government Revisions to Payroll Estimates Add 462,000 More Jobs in the Year Through March
The U.S. labor market pumped out more jobs in its recovery from the pandemic than previously thought. Employers added about 462,000 more jobs in the year through March than the Labor Department originally estimated, the agency said Wednesday as part of routine annual revisions. That means the economy added an average of nearly 39,000 more jobs each month for the year ended in March than previously thought.
“It was hard to find words to describe how strong the job growth was over those 12 months, and now it’s even stronger,” said Heidi Shierholz, president of the liberal Economic Policy Institute. She said the change didn’t significantly alter what is known about the labor market’s performance. The labor market is holding up better than many other parts of the economy that are buckling under the weight of high inflation, rising interest rates and shifting consumer spending.
U.S. COVID – Cases, Hospitalizations and Deaths all Decline
The US CDC is reporting 93.6 million cumulative cases of COVID-19 and 1,036,604 deaths. Average daily incidence continues to decline, down from the most recent high of 129,359 new cases per day on July 21 to 89,698 on August 23—the lowest average since May 12. Average daily mortality appears to have passed a peak, down from 466 deaths per day on August 12 to 390 on August 23. A lag in daily mortality of 2-4 weeks behind daily incidence is consistent with the trends we have observed over the course of the pandemic.**
Both new hospital admissions and current hospitalizations continue to decline, down 3.3% and 6.6%, respectively, over the past week. Both trends peaked around the last week of July, similar to trends in daily incidence. While BA.5 remains the overwhelmingly dominant variant—and continues to increase in prevalence—the prevalence of the BA.4.6 sublineage is increasing as well. Over the past 2 weeks, BA.4.6 became the #2 variant nationwide, now accounting 6.3% of sequenced cases, while BA.4 fell to #3 (4.3%). All variants reported here are sublineages of the Omicron variant of concern (VOC).
NYS COVID Update
The Governor updated COVID data through August 12.
- Daily: 19
- Total Reported to CDC: 73,552
- Patients Currently in Hospital statewide: 2,368
- Patients Currently in ICU Statewide: 240
7 Day Average Positivity Rate – Cases per 100K population
- Statewide 6.51% – 22.42 positive cases per 100,00 population
- Mid-Hudson: 5.07% – 21.40 positive cases per 100,00 population
Long COVID has Forced as Many as 4 Million People Out of the Workforce
In response to new Census Bureau data released in June, the Brookings Institution estimates that 2 million to 4 million individuals are out of the workforce because of long COVID. Patients with long COVID often suffer from extended periods of fatigue, brain fog, and muscle aches. Long COVID is like healing from injuries after falling off a bike, Dr. Panagis Galiatsatos, assistant professor at Johns Hopkins’s division of pulmonary and critical care medicine, told Fortune.
Last July, long COVID was named a disability protected under the Americans With Disabilities Act (ADA). Since then, many have come forward to explain the effects of having and taking care of people with long COVID. Owing to brain fog and other symptoms, people have had to take time off, and the task of caretaking also sometimes requires extra personal days.
Weather Looks Good Today for Artemis 1 Moon Mission Launch, NASA Says
It looks like Mother Nature may cooperate for NASA’s historic Artemis 1 megarocket launch to the moon today. The weather outlook has improved for the planned Artemis 1 launch at 8:33 a.m. EDT (1233 GMT) from Pad 39B here at NASA’s Kennedy Space Center. Forecasters are predicting a promising 80% chance of good liftoff conditions.
Artemis 1 is NASA’s first test flight of its Space Launch System (SLS) moon rocket and its Orion spacecraft. The uncrewed mission will send a sensor-laden Orion capsule on a 42-day shakedown cruise around the moon to verify that that both vehicles are ready to fly astronauts into deep space.
Moderna Files Patent Infringement Lawsuits Against Pfizer and BioNTech Over mRNA Covid-19 Vaccines
“Moderna believes that Pfizer and BioNTech’s COVID-19 vaccine Comirnaty infringes patents Moderna filed between 2010 and 2016 covering Moderna’s foundational mRNA technology. This groundbreaking technology was critical to the development of Moderna’s own mRNA COVID-19 vaccine, Spikevax. Pfizer and BioNTech copied this technology, without Moderna’s permission, to make Comirnaty,” the news release said.
Pfizer has not been served and is “unable to comment at this time,” a company spokesperson told CNN. Moderna said in the release that it is not aiming to remove Pfizer’s vaccine from the market or prevent future sales of its vaccine and also is not seeking damages of its sale in specific circumstances.
COVID-19 Deaths Reach 1 Million Worldwide so Far in 2022
One million people have died from COVID-19 so far this year, the World Health Organization has revealed, describing it as a “tragic milestone”. Since the pandemic began more than two and a half years ago, more than 6.4 million people have died from COVID-19 across the globe, according to WHO data.
WHO chief Tedros Adhanom Ghebreyesus said on Thursday the figures reached this week demonstrated the world was not “learning to live” with the virus. Mr Tedros had wanted all countries to have vaccinated 70 per cent of their populations by the end of June, but 136 countries failed to reach the target, of which 66 still had coverage below 40 per cent.
McMahon: NY Pandemic Recovery Update: Climbing, but Still Far Behind
July’s private employment count in New York remained well below the pre-pandemic level, even as the national job count rose to a new high, according to monthly reports from the state Labor Department and federal Bureau of Labor Statistics. Still hovering nearly 4 percent below the February 2020 level, New York’s employment recovery remains among the slowest in the nation. 23 states had surpassed their pre-pandemic job counts. Employment in the nation as a whole was up a net 0.5 percent in July compared to February 2020.
On a seasonally adjusted basis, New York’s statewide private jobs estimate last month was back above 8 million for the first time in 28 months—but still 312,000 short of the February 2020 level. New York has now regained more than 80 percent of the nearly 2 million private-sector jobs the state lost in the immediate aftermath of the March 2020 Covid-19 outbreak and lockdowns. However, even counting New York’s loss, employment in the U.S. as a whole has risen much further, to 471,000 jobs above the pre-pandemic total.
China Declares Emergency as Heat, Drought Threaten Crops, Manufacturing
Chinese authorities issued a national yellow alert last Thursday, as temperatures eclipsed 104 degrees F in dozens of cities. Temperatures also are putting pressure on the country’s power grid. China’s Sichaun Province has received 51% less precipitation than normal this summer in addition to the excessive heat. The province has a population of 94 million people.
China counts on hydroelectricity for about 15% of its total energy needs. Shrinking water levels have put a strain on production capabilities amid rising demand. Hydropower output fell below half its normal level in Sichuan earlier in the week, prompting the 67 coal-fired power plants in the province to generate as much power as possible as part of an emergency response, according to Chinese officials. The increasing power demands are also negatively impacting the manufacturing industry. Companies including Toyota, Volkswagen, Intel, Tesla and Apple have been forced to reduce product.
Energy Crisis in the U.K. as Regulator Hikes Bill Price Caps by 80%
Households in Great Britain face a leap in energy bills from October after the regulator raised the energy price cap, taking the average gas and electricity bill to £3,549 a year. In a blow for hard-pressed consumers already struggling with soaring inflation, Ofgem approved the £1,578 increase on the current figure of £1,971 for the average dual-fuel tariff – a rise of 80%.
The cap will be almost treble what it was a year earlier last October, when it was raised to £1,277. The announcement comes as households attempt to budget for a tough winter. Soaring energy bills have fuelled rampant inflation, which breached 10% last month and is forecast by some economists to climb to 18% from January.
California to Ban Sales of New Gasoline-Powered Vehicles By 2035
California, the largest auto market in the US, is to phase out the sale of gas cars over the next 13 years in a bold plan to combat the climate emergency and reduce emissions. The policy allows Californians to keep driving gas-powered cars, trucks and SUVs and buying used ones after 2035, but no new models would be sold in the state, the most populous in the country. California has seen historic wildfires amid summers of record-high temperatures in recent years.
The state has about 80,000 public charging stations and will need to expand that number to accommodate the surge in electric vehicles. Last year only 12% of new cars sold in California were zero-emission, according to regulators, and in the first three months of this year about 16% were electric.
Elon Musk, T-Mobile’s Sievert to ‘Announce Plans’ on Mobile Connectivity
Elon Musk’s SpaceX and T-Mobile are teaming up to offer mobile users phone service via Starlink satellites, the companies announced on Thursday. The service will be particularly useful in areas with no cell coverage, particularly when there’s an emergency, SpaceX founder Musk said at an event in Texas.
SpaceX and T-Mobile said in a press release that the new plan would “provide near complete coverage in most places in the US — even in many of the most remote locations previously unreachable by traditional cell signals.” The service is expected to launch next year with T-Mobile using its mid-band spectrum to create a new network, T-Mobile CEO Mike Sievert said at the same event. It will work with most phones and text service is the first to be rolled out, he added.
Apply for the 2022 Innovation Challenge Grant– Advanced Materials
FuzeHub administers the Jeff Lawrence Innovation Fund, which supports a set of activities designed to spur technology development and commercialization across New York State. As part of the Fund, FuzeHub will administer a New York State Advanced Materials Innovation Challenge. The purpose of this Innovation Challenge is to leverage the power of advanced materials to promote greater environmental sustainability.
Manufacturing in New York State is cleaner and greener than ever before, but manufacturing can still have harmful effects on the environment. Through the use of advanced materials, FuzeHub believes that manufacturers can make products, leverage technologies, and use processes that strengthen sustainability. Importantly, the application must advance “environmental sustainability”, the responsibility to conserve natural resources and protect ecosystems now and into the future. The strongest applications will use advanced materials that are themselves sustainable within applications that promote environmental sustainability.
Will Reshoring Chip Production Help Fix the Supply Chain?
Billions in federal spending to boost production of computer chips is an important step toward making the U.S. more competitive in the global marketplace, but it doesn’t guarantee that a manufacturing boom will follow, said Wharton expert Morris Cohen.
“I think it will have an incremental effect that will be positive in terms of the manufacturing footprint for semiconductors in the U.S. But will it absolutely reverse the trend? No, I don’t think so,” he said. Cohen, who is professor emeritus of operations, information and decisions, Cohen said news about the shortages hasn’t been overblown; demand for such products went up in ways that industries did not expect and were not prepared for. But the availability of homemade semiconductors won’t necessarily encourage more American manufacturing of other products that need them, like cars.