Member Briefing December 12, 2022
Congress Losing Time to Avert Shutdown
Lawmakers are digging in their heels in a high-stakes, end-of-the-year spending tug-of-war, with only a week now left before a government shutdown deadline. While leading negotiators say they’ve been exchanging topline figures for a potential omnibus funding bill that many are still optimistic could pass this month, members say it’s becoming clearer that negotiations will likely need to extend beyond the current Dec. 16 deadline.
Democrats have been unified in pressing for an omnibus before the end of the year, rather than passing a CR through sometime in the next Congress, when they’ll have to tangle with a Republican-controlled lower chamber. Some Republicans, meanwhile, are openly calling for a CR into next year, seeking to punt the action until their party control the House.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Ukraine Launches Missile Attack on Russian-Occupied Melitopol, Explosions Reported in Donetsk and Crimea - CNN
- Drone Strikes Leave More Than a Million Without Power in Southern Ukraine - NBC
- Viktor Bout Says He Wished Brittney Griner Luck During Prisoner Swap – Washington Post
- Russians March on Foot to Advance Yards in Bloody Eastern Ukraine Battle - WSJ
- Biden Administration has ‘Concerns’ About Providing Ukraine Cluster Munitions - Politico
- To Stop Killer Drones, Ukraine Upgrades Ancient Flak Guns With Consumer Cameras And Tablets - Forbes
- Ukraine Hit by Deadliest Single Russian Attack on Civilians in Weeks - WSJ
- Russia Grinds on in Eastern Ukraine; Bakhmut ‘Destroyed’ - AP
- Turkey's Oil Tanker Traffic Jam Is Growing - OilPrice
- Ukrainian Ingenuity is Ushering in a New form of Warfare at Sea – The Economist
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
JP Morgan Chase PMI: Global Manufacturing Downturn Intensifies
The J.P. Morgan Global Manufacturing PMI™ – a composite index produced by J.P. Morgan and S&P Global in association with ISM and IFPSM – fell to a 29-month low of 48.8 in November, down from 49.4 in October. The PMI has posted below the neutral mark of 50.0 in each of the past three months. 23 of the 31 nations for which data were available had PMI readings indicating contraction, including China, the US, the euro area and Japan.
Data broken down by sector indicated that output declined across the consumer, intermediate and investment goods industries. The weakest performer was intermediate goods, which saw a solid drop in production volumes. The downturns at consumer and investment goods producers were both mild in comparison. November survey data also highlighted a number of potential headwinds for the sector during coming months. New order intakes fell for the fifth month running and to the greatest extent in two-and-a-half years. International trade also retreated further, posting a decline for the ninth successive month.
Three New Yorkers Will Wield Power in Congress in 2023. What Will That Mean for the State?
New York is losing a seat in Congress in January yet gaining in influence. In an unusual buildup of home-state clout, two New Yorkers from opposite parties — Republican Rep. Elise Stefanik and Democratic Rep. Hakeem Jeffries — will each hold leadership roles in the House while Sen. Chuck Schumer will remain a dominant force in the Senate as its majority leader, the post he claimed two years ago after Democrats won control of that chamber.
Wielding a gavel or high rank in Congress can make a big difference to a House member or senator's state, both in terms of federal funds that flow home and enactment of policies beneficial to their constituents. But the question for New York is whether its trio of leaders can secure those benefits in a politically split Congress and what they might be, given the partisan climate and likely disagreements over what is beneficial to their state. New Yorkers will have multiple hands on levers of power in Washington come January, but they may not be pulling in the same direction.
U.S. COVID – Admissions and Current Hospitalizations Continue to Rise
The US CDC is reporting 98.8 million cumulative cases of COVID-19 and 1.08 million deaths. Incidence for the week ending November 30 remained relatively stable over the previous week, falling to 303,101 cases from 306,856 cases for the week ending November 23. Weekly mortality fell significantly for the week ending November 30, with 1,780 reported deaths compared to 2,634 deaths the week ending November 23. The decline could be a result of delayed reporting due to the US Thanksgiving holiday.
Both new hospital admissions and current hospitalizations continue to rise, increasing last week by 20% and 18%, respectively, over the previous week. The Omicron sublineages BQ.1.1 (32%) and BQ.1 (31%) together represent the most dominant subvariants of sequenced specimens. A host of other Omicron sublineages—including BA.5 (14%), BF.7, XBB, BN.1, BA.4.6, BA.5.2.6, BF.11, BA.2, BA.2.75, BA.2.75.2, and others—make up the remainder of cases.
NYS COVID Update
The Governor updated COVID data through December 9
- Daily: 20
- Total Reported to CDC: 76,063
- Patients Currently in Hospital statewide: 3,457
- Patients Currently in ICU Statewide: 325
7 Day Average Positivity Rate - Cases per 100K population
- Statewide 6.41% - 27.14 positive cases per 100,00 population
- Mid-Hudson: 5.86% - 28.09 positive cases per 100,00 population
Study: Nearly Half of COVID Patients Worldwide Still Have Symptoms After 4 Months
Researchers at the University of Leicester in England performed an analysis of nearly 200 studies of prior COVID patients, involving nearly 750,000 people in all. The patients—some of whom were hospitalized and some of whom weren’t—lived across the globe. More than 45% of study participants had at least one lingering symptom four months out from their initial infection. A quarter of the patients reported fatigue, and a similar number said they felt pain or discomfort. Meanwhile, sleep issues, breathlessness, and problems participating in normal daily activities were reported in just under a quarter of patients, according to the study.
Often, no clinical abnormalities could be found to explain such symptoms. But some signs were reported in many patients who had been hospitalized with COVID, including changes in lung structure and function. An abnormal CT scan and/or X-rays were found in nearly half of previously hospitalized patients, in addition to a decreased capacity to diffuse carbon monoxide in nearly a third of patients.
China’s Former CDC Head Predicts 90% of Population Could Get COVID as Beijing Eases Restrictions
Investors and businesses may be welcoming China’s surprise pivot from years of COVID-era lockdowns, mass testing, and isolation, but one of the country’s top medical advisers is warning it’ll come with a cost: a massive wave of COVID cases that will occur as containment measures are lifted. Feng Zijian, a former deputy head of China’s Center for Disease Control and Prevention and one of Beijing’s key medical advisers, predicted on Tuesday that 60% of China might be infected with COVID in an initial surge of cases as China loosens its policies.
By the time the disease makes its way through the population, as much as 90% of China will have been infected, he continued. By comparison, the U.S. Centers for Disease Control and Prevention estimated in April that 60% of Americans had contracted COVID-19, up from 34% the previous December.
A Cloudy Forecast for Japan's Economy
The world's third-largest economy is not doing well. Revised GDP figures released on Thursday showed that Japan's economy shrank by an annualised 0.8% in the third quarter of 2022. Economists had predicted an expansion, but a surge in coronavirus infections over the summer and higher inflation, caused partly by a decline in the value of the yen, took a toll on the economy.
But there may be sunshine ahead. A government stimulus package should soon make a difference, and the lifting of covid-related travel curbs is expected to bring back tourists. It remains to be seen, however, if that will be enough to offset other problems, including tumbling real wages and depressed business confidence. Even if domestic demand recovers, Japan's economy will be hurt by a global recession.
Economists: A US Housing Recession Has Already Arrived
The Housing Market Index, a closely watched industry metric that gauges the outlook for home sales, declined to 33 in November on a hundred-point scale, its lowest level in a decade, save for the first dystopian month of the pandemic. Anything under 50 spells trouble. A month earlier, interest rates on a standard 30-year mortgage passed 7 percent, capping the largest single-year increase in at least 50 years. The difference between a 3 percent interest rate and a 7 percent rate amounts to $1,000 more in a monthly mortgage payment on a mid-priced American home.
The housing market is already in recession and has been since midsummer, according to the National Association of Home Builders, which publishes the Housing Market Index with Wells Fargo. “The index has declined for 11 straight months,” said Robert Dietz, chief economist for the homebuilders group.
Here’s Why Mortgage Rates Have Been Falling
“Most mortgages made in the U.S. end up being bundled and securitized into investment products, bonds that are eventually sold to investors across the world,” Said Karan Kaul, who researches housing finance at the Urban Institute. When last month’s inflation numbers came in better than expected, hedge funds, bond funds and banks across the world said, “Huh, maybe the Fed will slow down its rate hikes now.” So they bought a bunch of mortgages while rates were still pretty high, thinking, “Let’s get in while homebuyers are still paying that sweet 7%.”
But when there’s a big surge in investor demand for mortgage bonds, “the price goes up, the rate goes down, and that trickles through to what the homeowners will see,” said Jeana Curro at Bank of America. It’s an open question whether there’ll enough investor demand to keep mortgage rates down — especially because one big buyer is out of the market entirely. “The Fed has been the largest and really the only buyer of securities the past two years or so,” said Joel Kan, an economist with the Mortgage Bankers Association.
U.S. Weekly Unemployment Claims Increase Modestly
Initial claims for state unemployment benefits increased 4,000 to a seasonally 230,000 for the week ended Dec. 3, the Labor Department said on Thursday. Claims tend to be volatile at the start of the holiday season as companies temporarily close or slow hiring. They shot up to a three-month high a week before the Thanksgiving holiday, only to almost unwind the surge in the following week. The claims report also showed the number of people receiving benefits after an initial week of aid increased 62,000 to 1.671 million in the week ending Nov. 26.
Though there has been an increase in layoffs in the technology sector, with Twitter, Amazon and Meta, the parent of Facebook, announcing thousands of job cuts in November, that has not significantly shifted labor market dynamics.
Labor Force Continues Shrinking
The economy added 263,00 jobs in November. Expectations were for 200,000, so we exceeded them. But the labor force dropped another 186,000. That is bad, considering we have 4.3 million more job openings than workers to fill them. We are now 102,000 workers below the pre-pandemic participation level. The labor force has shrunk for three straight months. If we had the same participation rate now as pre-pandemic, there would be 3.3 million more workers in the labor force.
Further complicating the strong topline jobs numbers, according to Curtis Dubay, Chief Economist at the U.S Chamber of Commerce, is that “the household survey showed the number of workers employed dropped by 138,000. Usually, the surveys of businesses (the 263,000 figure) and households are similar. That is something to keep an eye on. Also, wages rose 0.55% from October and 5.1% annually from November 2021.” That is very strong but not surprising given the high number of job openings and the shrinking labor force.
U.S. Natural Gas Rises 3% on Colder Forecasts Ahead of Storage Report
U.S. natural gas futures gained about 3% on Thursday on forecasts for colder weather and higher heating demand over the next two weeks than previously expected. That price decline came ahead of a federal report expected to show a smaller than usual storage decline last week when mild weather kept heating demand low. The price increase also came despite Freeport LNG's announcement last week that it plans to delay the restart of its liquefied natural gas (LNG) export plant in Texas from mid-December to the end of the year.
That delay should keep LNG exports below record levels hit in March and leave more gas in the United States for domestic use. Front-month gas futures for January delivery on the New York Mercantile Exchange rose 18.4 cents, or 3.2%, to $5.907 per million British thermal units (mmBtu) at 8:31 a.m. EST (1331 GMT). U.S. gas futures are up about 58% so far this year as much higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine.
Wage & Hour Developments in New York State: What Employers Need to Know
New York State minimum wage rates and the weekly amount that salaried (exempt from overtime) employees need to be paid has been changing annually in December for a number of years now. This year is no exception. Employers should continuously monitor their employee wage payment obligations, including minimum wage and overtime eligibility, as these change frequently.
This year’s changes affect employers with employees in “Upstate” New York (which are those employees located outside of New York City, Long Island, and Westchester). Specifically, effective New Year’s Eve, December 31, 2022: The minimum wage will increase, and The salary threshold for exempt administrative and executive employees may also increase. These changes are explained in more detail below.
UAW Wins Election at GM/LG Battery Plant in Ohio
Workers making batteries for Chevy Bolt EVs and other General Motors electric vehicles will be represented by the United Auto Workers. The UAW announced the overwhelming 710-to-16 vote victory early Friday morning for Ultium Cells LLC, a joint venture between GM and LG Energy Solution.
The battery plant is only a few miles from GM’s former Lordstown Assembly Plant, a facility famous for its radical, sometimes violent labor activism in the 1970s that evolved through many decades into a cooperative relationship by the early 2000s. The plant built the Chevy Cruze from 2008 until its closure in 2019 as GM exited the small car business in the U.S. Shortly after announcing it would end production in Lordstown, GM and LG announced the Ultium battery plant which began cell production earlier this year. Many of the workers hired for battery production were former union members from the GM plant.
The Five-Year Engineering Feat Germany Pulled Off in Months
In March, the German government asked energy companies to weigh a seemingly impossible engineering task. Could a new liquefied natural gas import terminal, which normally takes at least five years to build, be erected in this port town by year’s end? After three days deliberations, the company concluded that if everything went perfectly the project could be done by Christmas. Since then, it has had to contend with potentially toxic soil and environmental regulations protecting frogs and bats.
Mathias Lüdicke, the Wilhelmshaven branch manager for Niedersachsen Ports GmbH. is hoping for good weather as his team races toward the finish line. Bad weather could force delays, and heavy wind routinely halts work. There is still work to be done and tests to be carried out before the floating terminal, the 965-foot Hoegh Esperanza, can dock in Wilhelmshaven in the coming days and the gas can start flowing.
Sickness and Child Care Disruptions Continue to Wreak Havoc for Working Mothers
As many workplaces have put in place return-to-work policies and settled into new hybrid routines, working mothers are still struggling. For them, the stresses induced by the pandemic — including sickness-related disruptions and lack of childcare — still haven’t let up. As many workplaces have put in place return-to-work policies and settled into new hybrid routines, working mothers are still struggling. For them, the stresses induced by the pandemic — including sickness-related disruptions and lack of child care — still haven’t let up.
The working moms who remain in the workforce are “carrying an immense load,” Jill Koziol, co-founder of the well-being community Motherly, said recently on the C-Suite Conversations podcast. Motherly’s 2022 State of Motherhood report found that 47% of women are the primary breadwinner in their household. The report also found that twice as many women left the workforce than men in the pandemic, and that 46% of mothers who are still unemployed initially left due to a child care issue. As Koziol put it, “The pandemic brought many women to their breaking point.”