Member Briefing December 13, 2023
Inflation Cooled Slightly as Underlying Pressures Remained Stubbornly High
The consumer-price index rose 3.1% in November from a year earlier, a slight slowdown from 3.2% in October, the Labor Department said Tuesday. Prices were up 0.1% from the prior month after holding steady in October. Core prices, which strip out volatile food and energy components, rose 4% in November from a year earlier, the same as October. On a monthly basis, core prices rose 0.3%, faster than would be consistent with the Federal Reserve’s long-term inflation target of 2%.
- A 2.3% decrease in energy prices helped keep inflation in check, as gasoline fell 6% and fuel oil was off 2.7%. Food prices increased 0.2%, boosted by a 0.4% jump in food away from home. On an annual basis, food rose 2.9% while energy was down 5.4%.
- Shelter prices, which make up about one-third of the CPI weighting, increased 0.4% on the month and were up 6.5% on a 12-month basis. However, the annual rate has showed a steady decline since peaking in early 2023. Lodging away from home fell 0.9%.
- After declining for five straight months, used vehicle prices rose 1.6% in November, and vehicle insurance increased 1% and was up 19.2% year over year. Medical care costs rose 0.6% while apparel fell 1.3%.
- Worker paychecks increased on an inflation-adjusted basis, with real average hourly earnings rising 0.2% on the month and 0.8% from a year ago, the Labor Department said in a separate release.
War in Israel Headlines
- Israel and Hamas: The Latest News – The Guardian
- Battles Rage Across Gaza as Israel Indicates it’s Willing to Fight for Months or More to Beat Hamas - AP
- Biden Alludes to Disagreements With Israel's Netanyahu – Reuters
- Yemen’s Houthi Attacks Norwegian Tanker - CNBC
- Israel Announces Additional Checkpoint for Aid Deliveries to Gaza – France 24
- Israel Strikes Across Gaza as the Offensive Leaves Both it and the US Increasingly Isolated - AP
- Video Investigation: Hamas Trained for Oct. 7 Attack in Plain Sight - WSJ
- Qatar Sent Millions to Gaza for Years – With Israel’s Backing. Here’s What We Know About the Controversial Deal - CNN
- Puma Ends Sponsorship Deal With Israeli Soccer Team, Says Decision Was Made Before War – Forbes
- WSJ Poll: Majority of Americans Back Israel - WSJ
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Ukraine's Zelenskyy Makes Plea for Support During DC Visit - AP
- House Speaker Johnson Insists Ukraine Aid Package Include U.S. Border Measures - WSJ
- US Issues More Sweeping Sanctions Targeting Russia Over Ukraine War - Reuters
- Zelenskyy says Putin is ‘Inspired’ by Capitol Hill Deadlock on Ukraine - Politico
- Russia Has Lost Almost 90% of Its Prewar Army, U.S. Intelligence Says - WSJ
- Finland to Reopen Some Russia Border Crossing Points - Politico
- Podcast: France is Beefing up its Support at NATO’s Eastern Flank – The Economist
- Ukraine’s Biggest Wireless Service Knocked Offline in Attack - WSJ
- The Russians Couldn’t Take Avdiivka With Tanks. They Couldn’t Take It With Infantry. Now They’re Trying With Drones. – Forbes
- 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
New York Plans to Invest $1 Billion to Expand Chip Research at Albany NanoTech
A $10 billion partnership will establish a semiconductor research and development center at Albany NanoTech Complex, Gov. Kathy Hochul and industry leaders announced Monday in Albany. The collaboration by the state, IBM, Micron, Applied Materials, Tokyo Electron, and others will fund the construction of a cutting-edge High NA Extreme Ultraviolet Lithography Center – the first and only publicly owned High NA EUV Center in North America – that will support the research and development of semiconductors.
This is the latest development in the state's investment in working to make the state a future hub for semiconductor manufacturing and development, spearheaded by the federal CHIPS and Science Act. New York is also working to secure anchor hub status under the federal National Semiconductor Technology Center, which would unlock more than $11 billion in CHIPS Act funding. Industry leaders like IBM praised the investment in semiconductor education. “It’s about creating a robust sustainable future for us and our nation,” said CEO Arvind Krishna.
Why Fed Rate Hikes Take So Long to Affect the Economy, and Why that Effect May Last a Decade or More
The increase in borrowing costs that stems from Fed decisions does not affect all consumers immediately. It typically affects people who need to take new loans — first-time homebuyers, for example. Other dynamics, such as the use of contracts in business, can slow the ripple of Fed decisions through an economy. “It might not all hit at once, but the longer rates stay elevated, the more you’re going to feel those effects,” said Sarah House, managing director and senior economist at Wells Fargo.
A 1% interest rate increase can reduce gross domestic product by 5% for 12 years after an unexpected hike, according to a research paper from the Federal Reserve Bank of San Francisco. “It’s bad in the short term because we worry about unemployment, we worry about recessions,” said Douglas Holtz-Eakin, president of the American Action Forum, referring to the paper’s implications for central bank policymakers. “It’s bad in the long term because that’s where increases in your wages come from; we want to be more productive.”
COVID 19 News – COVID Symptoms to Know as Viruses Rise This December
With respiratory virus cases on the rise in Illinois, leading to an increase in hospitalizations and the potential for masking to return to some health care settings, it can be important to know the symptoms to watch for. But with so many overlapping symptoms between the currently active respiratory viruses, how can you tell the difference?
NBC Chicago spoke to multiple doctors to get an idea of what to look for with recent COVID infections, and if symptoms are changing as of December. Here's what they said.
Court Orders New York’s Congressional Maps to be Redrawn
On Tuesday, the state Court of Appeals ruled 4-3 that the New York Independent Redistricting Commission will need to draw a new electoral map by Feb. 28 next year. The ruling means that elected officials will need to wait months to learn exactly where they will be running in next year’s elections. It also means that for the next nine years, New York will have a map that is broadly more favorable to Democrats than the map that was made in place for the 2022 midterm elections – assuming that yet another legal challenge doesn’t invalidate it. “The plain text of the 2014 amendments to the Constitution places express limitations on court-drawn maps,” Chief Justice Rowan Wilson wrote in the majority opinion.
As a result of Tuesday’s decision, the Independent Redistricting Commission will have to propose new congressional maps by the end of February. The commission should be able to move quickly, since the court found that the commission is not required to hold any additional public hearings before drawing new maps, since it already sought public input in 2022. Once the state Legislature approves the new maps, they will go into effect in time for the 2024 election and will last through the next round of redistricting in 2032. There’s no telling what will happen if the redistricting commission cannot agree on a set of new maps. When that happened last year, the state Legislature took the initiative to draw new maps – only to have the Court of Appeals rule those maps unconstitutional in a controversial decision.
NFIB Survey: Receding Inflation Not Enough to Brighten Outlooks
The narrative of U.S. economic resilience does not appear to be reaching small business owners on the ground. The NFIB Small Business Optimism Index dropped to 90.6 in November, the fourth consecutive dip. As we come up on nearly two years of optimism running below the long-term average, outlooks for business conditions remained firmly in negative territory. Receding inflation was the silver lining of November’s report. Echoing today’s Consumer Price Index (CPI) report that demonstrated progress on inflation, the net percent of owners raising prices fell to 25%, tied for its lowest level since early 2021.
Yet, the NFIB survey is also flashing warning signs about price pressures that could complicate the road back to 2% inflation. In addition to an uptick in small business plans to raise prices over the next few months, owners continued to highlight hiring challenges and compensation pressures even amidst retreating labor demand. Despite tailwinds from resilient demand, firms reported that obtaining financing remains a challenge. The credit outlook also worsened. The net percent of small businesses expecting credit conditions to improve over the next few months fell to -11%, the lowest reading since 2012.
Holiday Season Hiring Slows Down
Seasonal holiday hiring — which was strong in recent years as consumers went on a pandemic-juiced spending spree — is lackluster this year as we head into the final shopping weeks of 2023. The Labor Department reported that seasonally adjusted retail payrolls were down 38,000 from October to November. Transportation and warehousing payrolls fell 5,000 and are down 61,000 since hitting a peak in October 2022.
Outplacement firm Challenger, Gray & Christmas, which tracks seasonal hiring, reported that as of October 2023, retail hiring was up 3% from 2022, while warehousing and transportation hiring was down 27%. The Labor Department’s November jobs report points “definitively towards weakness in holiday hiring,” said Senior Vice President Andy Challenger. “It’s unlikely the holiday season will buck the trend of continued cooling in the labor market we have observed most of this year.”
UAW Files Unfair Labor Practices Charges on Honda, VW and Hyundai U.S. Operations
The United Auto Workers has filed unfair labor practice charges with the National Labor Relations Board against Honda Motor, Hyundai Motor and Volkswagen, accusing the automakers of unlawfully interfering with worker organizing, the union said Monday. The union alleges the activities range from surveillance of workers at Honda to confiscating, destroying, and prohibiting “pro-union materials in non-work areas during non-work times” at Hyundai. At VW, the UAW alleges management has “harassed and threatened workers for talking about the union; confiscated and destroyed pro-union materials in the break room; attempted to intimidate and illegally silence pro-union workers; and has attempted to illegally prohibit workers from distributing union literature and discussing union issues in non-work areas on non-work time.”
“The union’s characterization of events in its press statement do not present an accurate picture, and we look forward to having a fair opportunity to present the facts through our participation in the legal process,” Hyundai said in a statement. “Honda encourages our associates to engage and get information on this issue. We have not and would not interfere with our associates’ right to engage in activity supporting or opposing the UAW,” a company spokesman said in an email.
Ford decreasing F-150 Lightning production in Dearborn amid EV pullback
Ford Motor Co. is decreasing production of its all-electric F-150 Lightning pickup truck after the new year in Dearborn, according to a report from Automotive News. "We will continue to match production to customer demand," spokesperson Jess Enoch said in a statement, declining to provide specifics about changes at the Rouge Electric Vehicle Center, which employs 2,200 people.
Ford employees assemble the Ford F-150 Lightning at the Ford Rouge Electric Vehicle Center. A report says the automaker is reducing production of the Lightning after the new year.
In its report, Automotive News cited a supplier memo that states the automaker will produce 1,600 vehicles per week. The plant had planned production for double that. The change is the latest in a series of moves by the Dearborn automaker and others in the industry to pull back on electric vehicle production. Availability of charging stations, charging speeds, grid reliability and EV affordability remain obstacles to mass adoption.
Fed Rate Cuts Could Come as Soon as June: Survey
A year after economists were bracing for a recession, the odds of a soft landing, easing inflation and interest rate cuts are looking up. The Federal Reserve could begin to cut rates in mid-2024, according to the latest CNBC Fed Survey. More than half of the 35 economists, strategists and analysts surveyed built in a rate cut by June, with that number rising to 69 percent by July. The Fed has hiked interest rates to their highest level in two decades, to a range of 5.25 to 5.5 percent, in an effort to slow demand that helped fuel higher prices.
Respondents also pegged the odds of a recession at 41 percent, down 8 points from the October survey and the lowest level since spring 2022 when the Fed launched its interest rate hike crusade to tamp down rampant inflation. Inflation, which peaked at 9 percent in summer 2022, fell to 3.1 percent year-over-year in November, according to the latest consumer price index released Tuesday by the Labor Department.
NY Minimum Wage Hike Coming in 2024. $16 In Westchester, $15 in the Rest of the Hudson Valley
New York State will raise the minimum wage to $16 an hour for employees in New York City, Long Island and Westchester, beginning in 2024, as well as $15 elsewhere in the state. The 2024 increases will be followed by $0.50 annual increases in both 2025 and 2026. Beginning in 2027, the minimum wage will increase annually "at a rate determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region."
The state agreed to a statewide minimum wage of $15 as part of the 2016-2017 state budget. It called for the increase to take place in a series of wage increases. At the start of 2017, the statewide minimum wage was $9.70. It was $10 an hour on Long Island and Westchester County.
Mars Unveils Strategy To Double Snacking Revenue To $36 Billion
Millions of Snickers, Milky Way, Three Musketeers and Twix bars roll off Mars conveyor belts on their way to holiday celebrations across the world. But there’s another product, a newer one for America’s biggest candy company, that’s joined the others in the mix. It’s the Kind bar, a 2017 Mars investment, made of nuts and grain held together with nut butter, dotted with chocolate chips and sometimes drizzled with dark chocolate. Kind bars taste like candy but look more like energy bars. And they’re the essential ingredient in Mars’ ambition to dominate global snacking. Expanding the distribution of recently acquired fig-bar maker Nature’s Bakery and chocolate-covered frozen-fruit brand Tru Fru is also part of Mars’ plan.
Even through all the cultural changes, consumers remain hungry for snacks. It’s the way they snack that’s evolving. In the Hartman Group’s 2020 report, for instance, more than 80% of respondents said they’re snacking differently, with some saying they’re eating healthier. For Mars, that’s a trend to follow.
Lawmakers Want to Increase Pace of Hypersonics Planning
Looking to keep pace in the fast-evolving field of hypersonics, lawmakers are directing the Pentagon to submit an overhauled strategy for the technology at least every two years as part of the 2024 National Defense Authorization Act, which is poised to pass both chambers of Congress this week.
There are numerous hypersonics programs underway within DOD and the armed services—ranging from both air-breathing and boost-glide offensive hypersonic missiles to hypersonic interceptors—but only a few are closely coordinated. The study wants a detailed DOD plan for “funding and investments … related to the procurement, research, development, test, evaluation and operation and maintenance of offensive and defensive hypersonic weapons.” The new language sets the timing for these reports and specifies the cost breakouts for various aspects of such systems.
Read more at Air and Space Forces
Epic Games Wins Antitrust Lawsuit Against Google Over Barriers to its Android App Store
A federal court jury has decided that Google’s Android app store has been protected by anticompetitive barriers that have damaged smartphone consumers and software developers, dealing a blow to a major pillar of a technology empire. The unanimous verdict reached Monday came after just three hours of deliberation following a four-week trial revolving around a lucrative payment system within Google’s Play Store. The store is the main place where hundreds of millions of people around the world download and install apps that work on smartphones powered by Google’s Android software.
Epic Games, the maker of the popular Fortnite video game, filed a lawsuit against Google three years ago, alleging that the internet search giant has been abusing its power to shield its Play Store from competition in order to protect a gold mine that makes billions of dollars annually. Just as Apple does for its iPhone app store, Google collects a commission ranging from 15% to 30% on digital transactions completed within apps. Apple prevailed in a similar case that Epic brought against the iPhone app store. But that 2021 trial was decided by a federal judge in a ruling that is under appeal at the U.S. Supreme Court.
OSHA Says Safety Helmets Provide Better Protection Than Hard Hats
On December 11, OSHA announced that the agency is replacing traditional hard hats used by its employees with more modern safety helmets to protect them better when they are on inspection sites. In 2020, the Bureau of Labor Statistics reports head injuries accounted for nearly 6 % of non-fatal occupational injuries involving days away from work. Almost half of those injuries occurred when workers came in contact with an object or equipment while about 20% were caused by slips, trips and falls.
Dating back to the 1960s, traditional hard hats protect the top of a worker’s head but have minimal side impact protection and also lack chin straps. Without the straps, traditional hard hats can fall off a worker’s head if they slip or trip, leaving them unprotected. In addition, traditional hard hats lacked vents and trapped heat inside. The agency recommends safety helmets be used by people working at construction industry and the oil and gas industry; in high-temperature, specialized work and low-risk environments; performing tasks involving electrical work and working from heights; and when required by regulations or industry standards.
Year’s Best ‘Shooting Stars’ Fall: The Night Sky This Week
The final week of the year with a new moon makes it one of the last, with a sky dark enough for easy stargazing. However, a few extraordinary events are happening this week, from a rare eclipse of the bright red star Betelgeuse to the peak of the best meteor shower of the year, the Geminids. Tonight -Wednesday/Thursday, December 13/14 the Geminid Meteor Shower Peaks
The Geminid meteor shower will peak overnight when up to 150 multicolored meteors could be visible from the northern hemisphere. A clear night is essential—and a dark sky will help. Luckily, the moon will be completely absent. Even better for those not wanting to stand around in the cold late at night, Gemini—the apparent source constellation—will be high in the sky as true darkness descends. Consequently, according to the American Meteor Society, “shooting stars” could be visible by 10 p.m. local time, wherever you are. All you need is your naked eyes—binoculars and a telescope will make it more difficult.