Member Briefing August 3, 2023

Posted By: Harold King Daily Briefing,

Job Openings Edge Lower to 9.58 Million in June, Quits Fall

Job openings, a measure of labor demand, dropped 34,000 to 9.582 million as of the last day of June, the lowest level since April 2021, the Job Openings and Labor Turnover Survey, or JOLTS report, showed. Transportation, warehousing and utilities had 78,000 fewer open positions, likely as bottlenecks in the supply chain eased. Unfilled jobs in state and local government education dropped by 29,000, while the federal government had 21,000 fewer vacancies. The job openings rate was unchanged at 5.8% in June. Other key numbers:

  • Hiring dropped 326,000 to 5.905 million, the lowest level since February 2021. That lowered the hires rate to 3.8%, the lowest since the first wave of the pandemic.
  • The decline in hiring was concentrated in durable goods manufacturing as well as finance and insurance.
  • Layoffs and discharges fell 19,000 to 1.527 million.
  • Resignations dropped 295,000 to 3.772 million. As a result, the quits rate, viewed as a measure of labor market confidence, fell to 2.4% from 2.6% in May.

Read more at Reuters

War in Ukraine Headlines

Ukraine and Russia: The Latest News – The Guardian

Russian Drone Strikes Target Ukraine Grain Export Ports, Infrastructure - WSJ

Ukraine’s Grain Lifeline in Danube Ports Comes Under Russia Threat - NYT

Romania Accuses Russia of War Crimes Over Danube Grain Port Bombing - Politico

Putin Talks to Erdo─čan by Phone, Discussing Grain Deal and Agreeing to Meet in Türkiye - Yahoo

Kyiv Warns Russia as Moscow Skyscraper Hit in Second Drone Attack - BBC

Moscow Residents Shrug Off Skyscraper Strikes - BBC

Global Wheat Prices Boom as Russia Pound's Ukraine Port – USA Today

Erdogan Urges Resumption of Grain Deal in Call With Putin - Yahoo

Central Europe's Arms Makers Scramble for Workers as Ukraine Boosts Business - Reuters

Russia is Resorting to Desperate Measures to Recruit Soldiers – The Economist

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

AA+, Fitch Lowers U.S. Bond Rating Ahead of 30 Year Bond Auction

Fitch Ratings downgraded the United States’ long-term foreign currency issuer default rating to AA+ from AAA on Tuesday, pointing to “expected fiscal deterioration over the next three years,” an erosion of governance and a growing general debt burden. “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” said Fitch.

“In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,” the ratings agency said. Fitch also highlighted the rising general government deficit, which it anticipates will rise to 6.3% of gross domestic product in 2023, from 3.7% in 2022. “Cuts to non-defense discretionary spending (15% of total federal spending) as agreed in the Fiscal Responsibility Act offer only a modest improvement to the medium-term fiscal outlook,” Fitch said.

Read more at Bloomberg

Fortune Global 500: Walmart World's Biggest Corporation With Saudi Aramco a Close Second

The Fortune Global 500 list was released Wednesday and provides an interesting snapshot of the global business world. Walmart once again topped the list, for the 10th year in a row, but Saudi Aramco was a surprisingly close No. 2 and also the most profitable company ever on the list, earning $159 billion last year. Energy profits also propelled Exxon Mobil (No. 7) and Shell (No. 9) back into the top 10.

The number of U.S. companies on the list rose to 136—the highest since 2010.  China’s tech champions fell, with (No. 52) falling six spots on the list, Alibaba (No. 68) falling 13 spots, and Tencent (No. 147) falling 26 spots. Only 29 of the 500 companies are headed by women—but that is up five from a year ago. The combined revenues of the Fortune Global 500 were $41 trillion, equal to more than one-third of global GDP. Together they employ more than 70 million people. 118 of the companies on the list are owned by governments—two-thirds of them in China.

Read more at Daily Mail

COVID Update - Updated Covid Boosters Could be Authorized by End of Month, Pfizer Says

The Food and Drug Administration could authorize Pfizer's updated Covid boosters by the end of August, Pfizer CEO Albert Bourla said during an investor call Tuesday. The drugmaker asked the FDA in June to authorize an updated version of its Covid booster that is designed to target the XBB.1.5 subvariant, a coronavirus strain that began circulating widely last winter. Moderna made a similar request that same month. The requests came days after the FDA advised the drugmakers to update the shots to target XBB.1.5 ahead of a fall Covid booster campaign.

XBB.1.5 is no longer the predominant strain, only making up 12.3% of all new Covid cases through the week ending July 22, according to the Centers for Disease Control and Prevention. It's been edged out by XBB.1.16, which accounts for about 15% of all new cases. (Experts said during a June meeting of FDA advisers that they don’t expect that will hurt vaccine effectiveness too much, as the XBB strains aren’t too genetically different from one another.)

Read more at NBC News

The End of China’s Economic Miracle

Despite expectations that the Chinese economy would surge after strict COVID-era lockdowns were lifted, the country is instead stuck in a downward economic cycle, or a case of “economic long COVID,” writes Adam Posen in a new essay for Foreign Affairs. “Like a patient suffering from that chronic condition, China’s body economic has not regained its vitality and remains sluggish.” 

Fueling the country’s economic stagnation, Posen writes, is the Chinese government’s increasingly arbitrary meddling in the economy, which has left many across China fearful of losing their property or livelihood. But Beijing’s conundrum presents an opportunity for U.S. policymakers, he writes: “Instead of trying to contain China’s growth at great cost to their own economy, American leaders can let Xi do their work for them and position their country as a better alternative—and as a welcoming destination for Chinese economic assets of all kinds.”

Read More at Foreign Affairs

SEC Finalizes Cybersecurity Disclosures Rule – The Impact on Manufacturers

Last year, the SEC proposed a new set of cybersecurity disclosure requirements for public companies. The centerpiece of the rule was a mandate to disclose cybersecurity incidents to the public within four days. The proposal also would have required detailed reporting on companies’ policies and procedures for responding to cybersecurity threats. Requiring detailed public disclosures about cybersecurity incidents and processes could provide a roadmap to potential hackers, and sharing information about ongoing incidents could compromise efforts to stop an attack.

The NAM urged the SEC to make commonsense adjustments to protect manufacturers from attacks and give companies the flexibility to respond to cybersecurity incidents appropriately. As a result the final rule is more tailored than the initial proposal. But its requirements still impose new compliance burdens on manufacturers. The rule still requires companies to report cybersecurity incidents publicly within four days, but companies will be able to request that the attorney general grant a 30-day extension to protect public safety or national security—a top priority for the NAM, with extensions possible.  Also, the SEC will require the disclosure of only limited information about an attack’s circumstances and impact.

Read more at The WSJ

Top Pentagon Official Says Shoring up Industrial Base, Reforming Export-Control Law Key to AUCUS Success

The AUKUS agreement could fundamentally change how the United States, Australia, and the United Kingdom pursue new military technology—but first, the U.S. needs to shore up its own industrial base so it can deliver on its initial commitment, a top Pentagon policy official said. Production delays for Virginia-class attack submarines may affect the U.S. promise to sell up to five nuclear-powered submarines to Australia, Mara E. Karlin, assistant defense secretary for strategies, plans, and capabilities told reporters on Tuesday.

“It is very clear that that industrial base has not has not been able to perform at exactly the level that we all want it to,” Karlin said. “And that is why the administration–with a very robust support of the Congress–has put funding into it.” She said that overcoming these challenges could enable the agreement to transform all three militaries in the years ahead, setting up a much more powerful alliance to deter China from aggressive action.

Read more at Defense One

Are You Burned Out Or Just Exhausted? Deloitte Survey Shows Plenty of Both

Heavy workloads, stressful jobs, and long work hours continue to leave employees at all levels feeling exhausted. In fact, Deloitte’s 2023 Workplace Well-Being Report found that 60% of employees, 64% of managers, and 75% of the C-suite are seriously considering quitting their jobs for one that would better support their well-being. But does that mean employees are burned out? Not so fast. The term burnout tends to be oversimplified as an individual failing of stress management and used interchangeably with exhaustion or overwhelm; however, burnout consists of more than just exhaustion. Burnout exists on a continuum that consists of these three dimensions: Chronic exhaustion; and Chronic cynicism and Inefficacy.

This means that you can be exhausted only, feeling cynical or frustrated only, or feeling disconnected or disengaged from your work only; or, any number of other combinations.  According to their research, to earn the label “burnout,” a person must experience high exhaustion, and high cynicism, and low professional efficacy. Based on their work, only about 20% of workers fit this profile.

Read more at Forbes

FuzeHub Innovation Summit October 16-17 in Saratoga

FuzeHub invites you to attend the New York State Innovation Summit on October 16-17, 2023 at the Saratoga City Center. This multi-day is event for NYS organizations that want to showcase and discover new and emerging technologies that support innovation and drive business growth. The event serves as an opportunity to foster collaboration; introduce industry to experts that can assist growth, strengthen our statewide innovation ecosystem and showcase promising early stage companies.  Whether you’re a startup, an economic developer, or an established manufacturer, the NYS Innovation Summit is for you.

The 2023 New York State Innovation Summit will showcase companies and researchers at the forefront of emerging technologies and new advancements in production capabilities.  This event celebrates New York State leadership in technology-led economic growth with experts in biotechnology, new materials, energy innovation, and artificial intelligence that will explore current technology convergence opportunities, ways to accelerate commercialization, and issues of manufacturing sustainability. GlobalFoundries CEO Thomas Caulfield, and RPI President Martin Schmidt will Keynote Summit the event.

Learn more and register at FuzeHub

UAW President Reveals 'the Members' Demands' for Detroit Three Talks

A 32-hour work week, the ability to strike when a plant closes and paid volunteer work in the event of a closure were among the negotiating priorities emphasized by United Auto Workers President Shawn Fain on Tuesday.  The list of 10 demands reiterated much of what officials have been saying for months leading up to the talks that kicked off last month ahead of the contracts expiring Sept. 14: eliminate tiers on wages and benefits, restore the cost-of-living allowance and pensions and retiree medical benefits for all workers. Fain emphasized negotiators would call for "double-digit" pay raises in light of the Detroit Three CEOs' total compensation growing 40% over the past four years. He said all temporary workers should be rolled over to full-time, and their use limited in the future.

The requests are "the members' demands" to the Detroit Three, he says. Making public to UAW members those demands being brought this week to General Motors Co., Ford Motor Co. and Stellantis NV is another example of the administration's break from tradition in pursuit of greater involvement by the rank-and-file and more transparency following a years-long corruption scandal.

Read more at The Detroit News

Oil Prices Perk Up as Recession Worries Ebb and Supply Tightens

Oil prices have surged to the highest levels in three months, as the economic outlook improves and supply cuts from some of the world’s biggest producers start to bite.Some analysts believe benchmark crude-oil futures are due for further gains, and could head toward $100 a barrel, after trading within a few dollars either side of $80 a barrel so far this year. The most actively traded futures contract for Brent, the global yardstick for crude oil, jumped 13% in July, its biggest monthly gain in a year and a half. It traded around $85.50 a barrel early on Wednesday.

Changes in both supply and demand are fueling the upswing. On the supply side, declining inventories reflect recent production cuts from Saudi Arabia and Russia—in contrast to earlier this year, when traders and analysts suspected Moscow had failed to follow through on an earlier pledge to pump less oil. At the same time, a range of economic indicators is signaling that fears about recession in the U.S. and the eurozone may have been overblown, boosting expectations for energy consumption.

Read more at The WSJ

Energy Groups Mount Campaign Against US Clean Hydrogen Rules

Energy companies have launched a lobbying blitz in Washington over pending rules they say will make or break the case for tens of billions of dollars’ worth of investment in hydrogen fuel. The production of green hydrogen — achieved by splitting water molecules with clean electricity — received generous subsidies in last year’s landmark US climate law. The Treasury department next month is due to issue tax guidelines that determine which types of hydrogen projects will qualify.

The debate comes down to how hydrogen makers prove the power they buy is “clean”. The Treasury’s most stringent proposal involves certifying that every hour of hydrogen production is powered by a zero-carbon energy source, essentially requiring its use around the clock. Industry lobbyists say this would force hydrogen plants to shut down when clean electricity is not available. Instead, they want the Treasury to use an “annual matching” system that allows producers to purchase credits for renewable electricity in amounts equal to their yearly energy consumption.  Such a scheme would make investment in US hydrogen more attractive, they say, enabling companies to effectively store up green power generated at times of surplus — for example when the midday sun passes over solar farms — for use later.

Read more at The Financial Times

Why Trucking Giant Yellow’s Shutdown Could Cost Taxpayers Money

The federal government lent Yellow $700 million during the height of the Covid-19 pandemic in 2020, providing a bailout that helped the company keep operating and attempt to expand its business. The Treasury Department took a roughly 30% equity stake in Yellow. At least three government investigations have since questioned the Trump administration’s handling of the loan.

Now, Yellow has shut down its operations and is expected to file for bankruptcy following a string of mergers that left it bulging with debt and a standoff with the Teamsters union. Treasury’s equity stake could be wiped out. Whether the federal government recovers the money it lent would likely depend on how much Yellow raises by selling real estate and other assets in bankruptcy. But some lawmakers and analysts have said taxpayers could lose money. “I expect Treasury is just going to take its licks here,” said Adam Levitin, a bankruptcy expert at Georgetown law school.

Read more at The WSJ

US Navy Assigns Propulsion System Work

The U.S. Navy assigned contracts totaling $137 million to five specialty manufacturers of forged marine engine shafts. Each is a five-year, fixed-price award without options for indefinite delivery/indefinite quantity supplies of “waterborne surface shafts” – and these follow a similar series of contracts totaling $162 million issued in May. Four contractors were assigned work during under both awards:

  • Erie Forge and Steel, Erie, Penn., a Whemco subsidiary that manufactures new and refurbished marine propulsion components for aircraft carriers, destroyers, submarines, and support ships;
  • Steel America, a specialty machining fabrication business in Norfolk, Va., with unit capacities up to 1,000 tons;
  • Collins Machine Works, an industrial machining and fabricating business in Portsmouth, Va.; and,
  • Bender CCP in Vernon, Calif., a provider of engineered rotating equipment repair, with fabricating and machining, as well as in-place field machining services.

North American Forgemasters in New Castle, Penn., one of North America’s largest open-die forging operations, was assigned one of the five-year awards issued in July. Two BAE Systems shipbuilding and repair businesses, BAE Norfolk in Virginia and BAE San Diego in California, drew awards in the May assignments.

Read more at American Machinist