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Member Briefing December 23, 2024

December 23, 2024

Posted By: Harold King in Daily Briefing,

Top Story

U.S. Chamber/MetLife Survey: Inflation, Cost of Regulation Top Concerns

This quarter, the MetLife & U.S. Chamber of Commerce Small Business Index is 69.1, slightly down from last quarter’s Index Score of 71.2. Overall, the survey’s findings show that despite continued concerns around inflation, small businesses remain optimistic about future revenue, investment, and hiring. Consistent for the past two years, more than half (55%) of small businesses say inflation is their biggest challenge this quarter. Conversely, seven in ten small businesses (72%) say they expect next year’s revenue to increase, stable for the past two quarters and up significantly from Q4 2023 (65%). Meanwhile, 46% say they plan to increase investment, and 41% say they anticipate increasing staff in the next year. Both of these last measures increased significantly from the start of 2024, but are similar to those recorded last quarter.

When it comes to the issue of regulation, small businesses are slightly more likely than last quarter to report that there is an increase in the time or resources spent fulfilling compliance and regulatory requirements compared to six months ago. Small businesses also feel that complying with regulations is more expensive for them than it is for their larger competitors. About seven in ten (69%) small businesses say that small businesses spend more per employee to comply with regulations than larger competitors.

Read more at The US Chamber of Commerce

Biggest Winners And Losers From The Fed’s Interest Rate Cut

The Federal Reserve announced that it’s lowering interest rates following its Dec. 17-18 meeting, dropping the federal funds rate by 25 basis points, to a target range of 4.25 to 4.5 percent. “The Federal Reserve is taking another step toward eventually getting benchmark interest rates back to a ‘neutral’ level that is neither an accelerator nor a brake on the economy,” says Greg McBride, CFA, Bankrate chief financial analyst.

“But with the economy motoring along and the progress on inflation having stalled out, this could be the last Fed rate cut for a few months, at least until they’re more comfortable with where inflation is headed.” says McBride. From mortgages and credit cards to savings accounts and the federal government, here are the winners and losers from a higher for longer interest rate climate.

Read More at Bankrate

PCE = 2.4% Lower Than Expected. Personal Income Rose 0.3% in November

Prices barely moved in November but still held higher than the Federal Reserve’s target when looked at from a year ago, according to a Commerce Department measure released Friday. The personal consumption expenditures price index, the Fed’s preferred inflation gauge, showed an increase of just 0.1% from October. The measure indicated a 2.4% inflation rate on an annual basis, still ahead of the Fed’s 2% goal, but lower than the 2.5% estimate from Dow Jones. The monthly reading also was 0.1 percentage point below the forecast. Core PCE also increased 0.1% monthly and was 2.8% higher from a year ago, with both readings also being 0.1 percentage point below the forecast.

On a 12-month basis, goods prices have fallen 0.4%, but services have risen 3.8%.
Food prices were up 1.4% while energy fell 4%.
Housing inflation, one of the stickier components of inflation during his economic cycle, showed signs of cooling in November, rising just 0.2%.
Personal income rose 0.3% after having jumped 0.7% in October, falling short of the 0.4% estimate.
Personal expenditures increased 0.4%, one-tenth of a percentage point below the forecast.
The personal saving rate edged lower to 4.4%.

Read More at CNBC

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Policy and Politics

Shutdown Averted: What to Know About the Continuing Resolution

Lawmakers came together to fund the government on Friday, keeping the lights on in Washington until early next year and preventing a Christmas season shutdown. The package — crafted by Speaker Mike Johnson (R-La.) — funds the government at current levels through March 14, extends the farm bill for one year and appropriates billions of dollars in disaster relief and assistance for farmers. The legislation came together after a chaotic week that featured four different spending proposals, influence from President-elect Trump and his close ally, Elon Musk, and questions about Speaker Mike Johnson’s (R-La.) future in the top job.

Johnson averted a shutdown, allowing federal agencies to remain open, letting lawmakers return home for the holidays, and officially capping off business for the 118th Congress. But in doing so he angered Republicans across the House GOP conference — especially hardline conservatives — and Trump, spelling trouble for his chances of keeping hold of the gavel during the Jan. 3 Speaker election on the floor. Thirty-four GOP lawmakers voted against Johnson’s final spending proposal, and 38 opposed the one brought to the floor before that, a sizable show of opposition to a pair of plans crafted by the Speaker.

Read More at The Hill

Biden Forgives $4.28 Billion In Student Debt For 54,900 Borrowers

The Biden administration announced Friday about 55,000 student loan borrowers will have their debts forgiven, totaling nearly $4.3 billion in relief, marking the latest wave of student loan forgiveness under a program intended to benefit public service workers. Borrowers enrolled in the Public Service Loan Forgiveness Program (PSLF) will have their student debts canceled, the Education Department said Friday. The program is designed to provide debt relief for those working in public service roles, including teachers, nurses, social workers, first responders, service members and others who have made at least 10 years of payments.

This relief is the result of “significant fixes” to the program by the Biden administration, which introduced an online application earlier this year allowing borrowers to request relief directly, after the program was associated with lengthy delays or challenges for borrowers to complete, the Education Department said. As of July 2024, the PSLF program is now fully managed by the Education Department rather than a single loan service, making it easier for borrowers to track their progress for debt relief, the agency said.

Read more at Forbes

Experts Project New York To Lose Two Congressional Seats In 2030

Redistricting expert New York Law Professor Jeff Wice projects the state will lose two congressional seats during the next reapportionment in 2030. He said the incoming Trump administration could further impact New York's future influence if it takes actions like cutting Census Bureau programming or adding a citizenship question to the survey. "This could have a very serious impact on the ability to get a full count in New York in 2030 when the real numbers come out," Wice said.

The state has gone from 45 congressional seats to 26 since World War II but New York Republican Party Chair Ed Cox blames the recent slide on the policies of Democratic governors like Kathy Hochul and Andrew Cuomo. He does believe based on positive trends in the most recent presidential and gubernatorial races, a Republican candidate could win a governor's race in 2026 and potentially stop the loss of representatives. Wice said it may be difficult to do things like increase New York's birth rate or substantially change trends of people moving out of state by the next census. However, he said leaders can focus on ensuring a full and accurate count.

Read more at NY State of Politics

Health and Wellness

Why Are Americans Paying So Much More for Healthcare Than They Used To?

Just how much have healthcare costs and spending been going up? The short answer: a lot. National healthcare spending increased 7.5% year over year in 2023 to $4.867 trillion, or $14,570 per person, according to data released Wednesday by the Centers for Medicare and Medicaid Services. Total spending on healthcare goods and services, everything from prescription drugs to back surgeries, accounted for 17.6% of gross domestic product, a measure of goods and services produced by the U.S. economy. The 7.5% rise represented a much faster pace of growth than the 4.6% increase in 2022. It came as pandemic federal funding for the healthcare sector expired and private health insurance enrollment increased.

More people with insurance led to increased demand for medical procedures, and spending on hospital care grew at the fastest pace since 1990. Spending on drugs also rose, including for medications to treat diabetes and obesity. A full 92.5% of Americans were covered by insurance last year, and 175.6 million, or just over half the population, got it through their employer, according to the government’s new annual data. Over 65 million Americans are on Medicare, a government health-insurance program mainly for people ages 65 and older, and nearly 92 million are on Medicaid, a state-federal program for the low-income and disabled.

Read more at The WSJ

NYS COVID Update

The Governor updated COVID data for the week ending December 13^th.

Deaths:

Weekly: 15
Total Reported to CDC: 84,569

Hospitalizations:

Average Daily Patients in Hospital statewide: 557
Patients in ICU Beds: 63

7 Day Average Cases per 100K population

4.1 positive cases per 100,00 population, Statewide
6.0 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

Transition 2024

Industry News

State Hiring Rebounded in November

State labor markets broadly rebounded in November after an unusually soft showing in October. The lion's share of states added payrolls over the month (38), while only 12 reduced headcounts. The unwinding of hurricane and strike effects gave some states a notable boost in November. Florida, where the hurricanes made landfall, and Washington, the location of now-concluded Boeing strikes, led the nation with payroll gains of 61.5K and 30.9K, respectively. North Carolina posted the third largest expansion, more than recovering its hurricane-induced losses the month prior.

Colorado, Illinois and Nevada notched the largest payroll declines. Although relatively tame at roughly 3K each, November marked the fifth consecutive payroll loss for the Silver State. Despite the improvement in hiring, unemployment rates continued to creep higher. Jobless rates rose in 25 states in November, surpassing October's count of 22. Nevada's 5.7% rate was the highest in the nation, followed by California (5.4%) and Illinois (5.3%). Meanwhile, unemployment rates fell in Washington, New Jersey, Delaware, Missouri and Montana. South Dakota maintained the lowest jobless rate in the nation at 1.9%.

Read more at Wells Fargo

Hudson Valley Employment Up By More the 10K in November. Manufacturing Employment Falls

Private sector jobs in the Hudson Valley rose over the year by 10,300, or 1.3 percent, to 831,200 in November 2024. The largest gains were in private education and health services (+9,600), other services (+3,600) and financial activities (+1,200). Job losses were centered in trade, transportation and utilities (-1,600), mining, logging and construction (-1,300), information (-700), leisure and hospitality (-400) and professional and business services (-200). Manufacturing declined by 200 workers in the region in November but were up 100 from November of 2023. Statewide manufacturing employment fell by 2,700 to 419,500 in November. In the 12 months from November 2023 manufacturing employment fell by 3,200.

Private sector job growth was spread throughout the region. Year-over-year, Sullivan County posted the strongest gains, up 5.7 percent. The second fastest growth was recorded in the Kingston MSA (+1.3 percent), followed by the Orange-Rockland-Westchester labor market area (+1.2 percent), and the Dutchess-Putnam Metropolitan Division (+0.6 percent).

Read The Report

Boeing Lands $5.6B 737 Order From Pegasus Airlines

Low-cost carrier Pegasus Airlines has booked an order for 100 Boeing 737 MAX-10 aircraft, with options for 200 more. The contract is valued at $5.65 billion according to industry sources, but could be worth much more depending on the number of options that Pegasus exercises. Privately held and headquartered at Istanbul, Pegasus serves 144 destinations in Turkey, Europe, North Africa, the Middle East, and Central Asia. The initial 100 jets will expand the Pegasus Airlines fleet to 1,200 aircraft.

Boeing noted the MAX-10 will respond to low-cost carriers’ ambition to increase their regional expansion and connectivity. Its own 2024 Commercial Market Outlook forecasts European and Central Asian operators will take delivery of nearly 7,900 single-aisle airplanes through 2043. CEO Güliz Öztürk. noted that the first 100 aircraft orders are “firm,” and the remaining options will be converted into firm orders “based on market conditions and the needs of our fleet."

Read more at American Machinist

FedEx Will Spin Off FedEx Freight LTL Unit

FedEx will spin off its LTL trucking unit, FedEx Freight, into a separate, publicly traded company within the next 18 months, the parcel giant announced Thursday. The separation will allow for more customized operational execution along with more tailored investment and capital allocation, FedEx said, underscoring the differences between LTL and parcel shipping. Rival UPS sold its own LTL unit, UPS Freight, to TFI International in 2021.

The two companies will maintain cooperation on key commercial, operational and technology initiatives, FedEx said. But the spinoff aims to create value for shareholders by running the LTL carrier as pure-play operation, a strategy competitor XPO followed in recent years with its spinoffs of its warehousing and other non-LTL properties. The goal is to avoid the “conglomerate discount,” a Wall Street concept that has driven corporate spinoffs across industries, as company leaders say their investors prefer more specific companies to big corporations. In FedEx’s case, a spinoff would allow shareholders to be more selective about which of its distinct businesses they invest in.

Read more at Supply Chain Dive

VW, German Unions Reach Deal To Cut 35,000 Jobs, Avoid Plant Closures

Volkswagen announced sweeping changes to its German operations, including more than 35,000 future job cuts and sharp capacity reductions in a last-gasp deal between Europe's top carmaker and unions on Friday to avert mass strikes. The agreement was hailed as a "Christmas miracle" by union leaders after 70 hours of gruelling negotiations, the longest in the company's 87-year history, as there would be no immediate site closures or layoffs. VW also appeared to have backed away from demanding 10% wage cuts.

VW said the deal would allow savings of 15 billion euros ($15.66 billion) annually in the medium term and saw no significant impact on its 2024 guidance. While there were no immediate closures, VW said it was looking into options for its Dresden plant and repurposing the Osnabrueck site. Some production would be shifted to Mexico. The IG Metall union said a 5% wage increase agreed in November would be suspended and vehicle production would shut at the Dresden plant by the end of 2025. VW AG's staff will not get raises under a collective wage agreement over the next four years, while some bonuses will be scrapped or reduced. Production at VW's Wolfsburg plant, its biggest, will be cut to two assembly lines from four. "No site will be closed, no one will be laid off for operational reasons and our company wage agreement will be secured for the long term," said works council chief Daniela Cavallo.

Read more at Reuters

DOD Awards Sikorsky $420 Million for Copters

Sikorsky Aircraft Corp. has drawn three U.S. Dept. of Defense orders totaling $420.4 million for a variety of components and systems for the CH-53K aircraft. The CH-53K, known as the King Stallion, is a heavy-lift transport helicopter, the largest and heaviest helicopter in service for U.S. defense forces. The U.S. Marine Corps is scheduled to receive a total of 200 CH-53Ks in a fleet-replacement program over multiple years, and last year the U.S. Navy granted a $2.77-billion award to Sikorsky for 35 King Stallions, with deliveries starting in 2026.

The first award is a firm-fixed-price delivery order worth $175.74 million for a firm-fixed-price delivery order for 22 main modules of the CH-53K aircraft. This contract contains no options, and it is expected to be completed by November 2034. The second award to Sikorsky Aircraft is worth $132,98 million for procurement of 128 main rotor blade assemblies for CH-53K aircraft. This contract contains no options and is expected to be completed by October 2032. Last, Sikorsky Aircraft was awarded $111.64 million for procurement of eight helicopter rotor-hub assemblies for CH-53K aircraft. All of the work awarded will be performed at Sikorsky’s base in Stratford, Conn.

Read more at American Machinist

CFPB Sues JPMorgan Chase, Bank Of America And Wells Fargo Over Zelle Payment Fraud

The Consumer Financial Protection Bureau on Friday sued the operator of the Zelle payments network and the three U.S. banks that dominant transactions on it, alleging that the firms failed to properly investigate fraud complaints or give victims reimbursements. The CFPB said customers of the three banks have lost more than $870 million since the launch of Zelle in 2017. Zelle said in a statement Friday that it was prepared to defend itself against this “meritless lawsuit.”

“The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle,” CFPB Director Rohit Chopra said in a statement. “By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves.” The suit is the latest move by the CFPB in the waning days of the Biden administration. Many of the actions it has taken, including steps to limit credit card late fees and overdraft charges, have been met with stiff opposition from banks and their trade groups. Corporations have had success pushing filing suits challenging federal oversight. In fact, JPMorgan said in August that it was considering litigation against the CFPB if the regulator sought to punish the bank for its role in the Zelle network.

Read more at CNBC

Teamsters Strike At Multiple Amazon Delivery Hubs. Here’s What You Should Know

Workers affiliated with the Teamsters union launched a strike at seven of the company’s delivery hubs less than a week before Christmas. The Teamsters said the workers, who voted to authorize strikes in recent days, joined picket lines on Thursday after Amazon ignored a Sunday deadline the union had set for contract negotiations.The company says it doesn’t expect the strike to impact holiday shipments. The strikes are taking place at three delivery hubs in Southern California, and one each in San Francisco, New York City, Atlanta, Georgia, and Skokie, Illinois, according to the union’s announcement.

Amazon has a couple hundred employees at each delivery station. The Teamsters mainly have focused on organizing delivery drivers, who work for contractors that handle package deliveries for the company. But Amazon has rebuffed demands to come to the negotiating table since it doesn’t consider the drivers to be its employees. The International Brotherhood of Teamsters also says the union represents some Amazon warehouse workers.

Read more at the AP

FDA Approves Eli Lilly’s Weight Loss Drug Zepbound For Sleep Apnea, Expanding Use In U.S.

The Food and Drug Administration on Friday approved Eli Lilly’s blockbuster weight loss drug Zepbound for treating patients with the most common sleep-related breathing disorder, expanding its use and possibly its insurance coverage in the U.S. The weekly injection is now the first drug treatment option cleared for patients with obesity and moderate-to-severe obstructive sleep apnea, or OSA, which refers to breathing interrupted during sleep due to narrowed or blocked airways. Zepbound should be used in combination with a reduced-calorie diet and increased physical activity, the FDA noted in a release.

An estimated 80 million patients in the U.S. experience the disease, according to Eli Lilly. Roughly 20 million of those people have moderate-to-severe forms of the disease, but 85% of cases go undiagnosed, the company told CNBC earlier this year. The approval backs up mounting evidence that there could be further health benefits tied to GLP-1s, a class of weight loss and diabetes treatments that have soared in popularity and slipped into shortages over the past year.

Read more at CNBC

Firefly Wins NASA Contract For Third Lunar Lander Mission

NASA announced that it has awarded a new $179 million contract to Texas-based Firefly Aerospace as part of the Artemis lunar missions, the fourth it has awarded to the company to deliver projects to the Moon’s surface. The mission, which aims to launch in 2028, will utilize the space startup’s Blue Ghost cargo lander to deliver six scientific experiments to an area on the Moon called Gruithuisen Domes, which were formed by lava millions of years ago in order to better understand Lunar geology.

Firefly’s first Moon mission for NASA is currently slated to launch in mid-January 2025 on top of a SpaceX Falcon 9 rocket. That mission is scheduled to land at Mare Crisium in order to study a variety of surface conditions to help prepare for future crewed missions to the Moon.

Read more at Forbes

Member Briefing December 19, 2024December 19, 2024