Member Briefing December 24, 2024
Top Story
Why The ‘Great Resignation’ Became The ‘Great Stay,’ According To Labor Economists
The U.S. job market has undergone a dramatic transformation in recent years, from one characterized by record levels of employee turnover to one in which there is little churn. In short, the “great resignation” of 2021 and 2022 has morphed into what some labor economists call the “great stay,” a job market with low levels of hiring, quits and layoffs. “The turbulence of the pandemic-era labor market is increasingly in the rearview mirror,” said Julia Pollak, chief economist at ZipRecruiter.
Employer “scarring” is a primary driver of the so-called great stay, ZipRecruiter’s Pollak said. Businesses are loath to lay off workers now after struggling to hire and retain workers just a few years ago. But job openings have declined, reducing the number of quits, which is a barometer of worker confidence in being able to find a new gig. This dynamic is largely due to another factor: the U.S. Federal Reserve’s campaign between early 2022 and mid-2023 to raise interest rates to tame high inflation, Pollak said. It became more expensive to borrow, leading businesses to pull back on expansion and new ventures, and in turn, reduce hiring, she said.
2025 Financial Forecast: What To Expect In Mortgages, Investing, Banking, And Credit Cards
The past year saw significant expansion in the economy: Inflation fell, as did interest rates. Unemployment rates remained low, and the S&P 500 rose by more than 20%. But with a new incoming administration, shifting financial policies, and continued recovery from the pandemic, what will 2025 hold? See Yahoo Finance’s predictions for the next year and how your personal finances may be affected.
Mortgage Bankers Association predict rates will stay above 6% in 2025.
The S&P 500 should produce modest returns in 2025, with volatility along the way.
We forecast the Fed will cut 25bp in both Q1 and Q2 of 2025, putting the fed funds target rate at 3.75% to 4.0%, and then we anticipate the Fed will pause through the end of the year.
Global Headlines
Middle East
- Some Gaps Have Narrowed In Elusive Gaza Ceasefire Deal, Sides Say – Reuters
- Lebanese Prime Minister Visits South Amid Israel-Hezbollah Ceasefire - VOA
- How Iran Lost Syria. And Why a Stable Post-Assad Future Will Require Tehran’s Involvement – Foreign Affairs
- Tel Aviv Hit By Missile Fired From Yemen, Israel And Houthis Say - CNN
- Former Israeli Spies Describe Attack Using Exploding Electronic Devices Against Hezbollah - AP
- Israel’s Enemy in Yemen Proves Hard for U.S. to Deter - WSJ
- Syria's Christians Fearful Of New Islamist Leaders As Christmas Approaches - Reuters
- Russian Delegation Invites Iran's President To Visit, Iranian Media Reports Say - Reuters
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Russia’s Central Bank Holds Off On Interest Rate Hike Amid Friction Between Inflation, War Spending – AP
- Zelenskyy Accuses Slovak PM Fico Of Helping Putin Weaken Europe - Politico
- South Korea Says North Korea Preparing To Send More Troops, Weapons To Russia - VOA
- NATO’s Rutte Slams Zelenskyy For Criticizing Germany’s Scholz - Politico
- Russian Ship Full of Troops Breaks Down at Sea - Newsweek
- Ukrainian Drones Hit Russian Fuel Depot For Second Time This Month - Politico
- How Russia's Tactical Nuclear Weapon Stockpile Compares to US' - Newsweek
- 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
Other Headlines
- UN Surge Teams Mobilise As Vanuatu Hit By Second Earthquake – UN
- Xi Digs In With Top-Down Economic Plan Even as China Drowns in Debt - WSJ
- PM François Bayrou Unveils France’s Fourth Government In A Year - Politico
- Europe’s Blockbuster Trade Deal With South America Is Deeply Controversial. Here’s Why - CNBC
- What We Know About Magdeburg Market Attack Suspect Abdulmohsen - BBC
- How Putin won the Romanian election - Politico
- White House Says Pakistan Is Developing Long-Range Missile Capable of Hitting the U.S. - WSJ
- EU Climate Chief Wopke Hoekstra Goes To War With Airlines - Politico
- Don't Underestimate North Korean Troops In Russia, Ex-Soldiers Tell BBC – BBC
Policy and Politics
Watchdog Calls For Halt To Energy Loans Amid Insufficient Conflict Of Interest Controls
An internal government watchdog is calling on the Energy Department’s loan office to halt its financing for energy projects, saying there are insufficient controls in place to prevent conflicts of interest. In a letter last week, Inspector General Teri Donaldson called on the Loan Programs Office (LPO) to “put into abeyance all loan and loan guarantee packages” until it can ensure that all of its contractors “are complying with conflicts of interest regulations.” Specifically, her office found that the office is “not collecting information about and tracking all parties involved in loan administration” and therefore does not know whether companies it may loan money to “have strategically hired the same third-party experts … that the LPO has retained to assist with loan processing.”
In addition, the Office of Inspector General (OIG) found that the LPO “had no records” of conflict of interest disclosures for contractors who provide the office with technical or financial support. Donaldson described her office’s finding as “interim” but said the finding was particularly urgent due to the loan office’s “stated intention to process $22 billion before January 20, 2025.” She noted that through funding provided by Congress in recent years, the office has already closed loans or loan guarantees for more than $15 billion since 2021.
Hochul Vetoes 'Grieving Families Act'
New York Gov. Kathy Hochul has vetoed the latest version of a bill to expand the state's wrongful death statute, the third time she has rejected the piece of legislation. Known as the "Grieving Families Act," the bill would among other things allow family members who lost loved ones to seek compensation for grief and anguish. In her veto message, Hochul calls the changes "Well-intentioned," but says they would lead to higher costs, like insurance premiums, and have a negative impact on the health care system, which are concerns echoed by business and health care leaders across the state.
Opposition to this year's version pointed to a report from actuarial Milliman that the new bill will have the same economic impact as previous versions, including a 40% increase in medical professional liability premiums. The Trial Lawyers Association criticized the Governor for her veto. “How many more families have to suffer without justice before this governor takes action?” state Trial Lawyers Association President Victoria Wickman said in a statement Friday.
Read more at NY State of Politics
OSHA Settles with Amazon Over Ergonomic Risk
On December 19, OSHA announced that it has reached a settlement with Amazon for a corporate-wide program to help better protect employees from hazardous working conditions leading to serious lower back and other musculoskeletal disorders at Amazon facilities. The settlement agreement resolves the department’s multiple ergonomics cases against Amazon.com Services LLC, in the first major multi-site investigation brought by OSHA in over a decade The parties had been scheduled to begin trials in 10 cases before the Occupational Safety and Health Review Commission between January and June 2025 stemming from inspections conducted across 10 Amazon facilities beginning in the summer of 2022.
The agreement requires Amazon to take action at the corporate level to ensure ergonomics requirements are effectively implemented at each Amazon facility covered by the agreement. The agreement will apply to all of Amazon’s fulfillment centers, sortation centers, and delivery stations, among other facilities, in federal OSHA’s jurisdiction and provides for an alternative dispute resolution process intended to quickly address and correct ergonomic hazards raised by Amazon workers. OSHA was seeking nationwide relief in the case, which the presiding OSHRC judge ruled last year that OSHA could pursue.
Health and Wellness
What To Know About A Surge Of Walking Pneumonia Cases Among Young Children
A rise in cases of a contagious lung infection across the United States is causing alarm, especially for parents of young children. Walking pneumonia usually sickens school-aged children and teens, but this year, toddlers are being hit the hardest. "Kids are spreading it to one another in schools and they are likely bringing it home to their parents and families as well," Preeti Sharma a pediatric pulmonologist says. Mycoplasma pneumonia usually manifests with upper respiratory symptoms, though some kids can also develop red eyes or rashes. Headaches are also common.
Caleb Ward is a pediatric emergency medicine physician with Children's National Hospital in Washington, D.C., where he says cases of mycoplasma pneumonia are up about tenfold this year. He says the good news is that many cases tend to be mild — that's why it's often called walking pneumonia. Sharma and Ward agree that most kids can be treated at home – just keep them hydrated, give them age-appropriate medicines for their fever as needed, and make sure they get plenty of rest. As for when to call the doctor, Ward says, "if parents or caregivers notice that their child is having difficulty breathing, is not drinking enough fluids to stay hydrated, seems much sleepier than usual, or if they remain sick – particularly with fever – for more than five days, they should be assessed by a health care provider."
NYS COVID Update
The Governor updated COVID data for the week ending December 13th.
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
- Trump Transition Team Plans Immediate WHO Withdrawal, Expert Says – Reuters
- Trump Announces Picks For Deputy Secretary Of Defense, Other Top DOD Posts – Defense Scoop
- Incoming Trump Press Secretary Says Day 1 Executive Order May Tackle Title 42 – The Hill
- Biden Commutes Sentences Of Nearly Every Prisoner On Death Row – The Hill
- Democrats Are Adrift as Donald Trump Prepares to Take Power - WSJ
- Trump Names Kratsios, Parker To Tech Roles - Politico
- Trump Says US Owning Greenland ‘Absolute Necessity’ – The Hill
- Tracking Trump’s Cabinet Picks – Politico
Industry News
Honda, Nissan Aim To Merge By 2026 In Historic Pivot
Honda and Nissan (are in talks to merge by 2026, they said on Monday, a historic pivot for Japan's auto industry that underlines the threat Chinese EV makers now pose to the world's long-dominant legacy car makers. The tie-up would create the world's third-largest auto group by vehicle sales after Toyota and Volkswagen. It would also give the two companies scale and a chance to share resources in the face of intense competition from Tesla and more nimble Chinese rivals, such as BYD. Smaller Mitsubishi Motors, in which Nissan is top shareholder, was also considering joining and would make a decision by the end of January, the companies said.
The chief executives of all three held a joint press conference in Tokyo. The rise of Chinese automakers and new players has changed the car industry quite a lot," said Honda CEO Toshihiro Mibe, citing technological trends of electrification and autonomous driving. "We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten." The two companies would aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen through the potential merger, they said.
U.S. Launches New Us Trade Probe Into Legacy Chinese Chips
The Biden administration on Monday announced a last-minute trade investigation into Chinese-made "legacy" semiconductors that could heap more U.S. tariffs on chips from China that power everyday goods from autos to washing machines to telecoms gear. The "Section 301" probe, launched just four weeks before President-elect Donald Trump takes office on Jan. 20, will be handed over to his administration in January for completion, Biden administration officials said.
The U.S. Trade Representative's office, which will conduct the new probe, said it is aimed at protecting American and other market-driven chip producers from China's massive state-driven buildup of domestic chip supply. U.S. Trade Representative Katherine Tai said that the trade agency has found evidence that Beijing is targeting the semiconductor industry for global domination, similar to its buildup in steel, aluminum, solar panels, electric vehicles and critical minerals.
Lego Is Reinventing Its Iconic Brick Sets And Keeping The Toy Industry Afloat
The toy industry is headed for its second consecutive annual sales decline, but it’s got one thing propping it up: colorful, interlocking plastic bricks. At a time when toy companies are struggling to match the massive gains of pandemic-era sales, Lego is growing rapidly. The Danish company saw revenue jump 13% in the first six months of the year and continues to snap up market share. “When you look at toy sales, Lego has just been driving all the growth in the industry this year,” said Eric Handler, managing director at Roth MKM.
After coming to the brink of bankruptcy in the early 2000s, Lego has reshaped its business and diversified its customer base, helping it to elevate sales even in inflationary market conditions. Its strategy has involved delving into the world of licensing, catering to adults as well as kids, tapping into the digital gaming world, partnering with studios and streamers to bring Lego content to consumers and building manufacturing sites close to distribution hubs to smooth the supply chain. Recent standouts among its tried-and-true portfolio are newly emphasized “passion points,” kits that appeal to a wide variety of consumers, from those obsessed with franchises such as Star Wars and Harry Potter to car enthusiasts and animal lovers.
Transshipping Revelation Rocks Cabinet Making Industry
U.S. Customs and Border Protection, or CBP, agents were inspecting building in Penang, Malaysia after finishing their tour of cabinet production facilities as part of a late 2022 inquiry into allegations that subsidiaries of Chinese company Qingdao Haiyan Group were evading tariffs. Haiyan had been accused of sending Chinese-made cabinets to the U.S. by shipping them through Malaysia, masking the origin of the goods—a scheme known as transshipping.
Haiyan has been a supplier to some of the largest cabinet makers and distributors in the U.S., such as American Woodmark. They, in turn, supply retail giants such as Lowe’s and Home Depot. One longtime Haiyan customer, Cabinets To Go, sparked the probe and has called out larger U.S. rivals for continuing to ignore red flags. American Woodmark said it ensures none of its purchases are transshipped because it has teams in Asia that inspect every shipment. The cabinet maker said that most of its supply chain is sourced in the U.S. and that it canceled all its orders with Haiyan’s Malaysian subsidiary upon learning of the allegations.
How Innovation Died At Intel: America's Only Leading-Edge Chip Manufacturer Faces An Uncertain Future And Lawsuits
Intel's fall from grace seemed to happen all at once. Shares of the once iconic chipmaker plummeted 60% in 2024. The company posted the biggest loss in its 56-year history in its latest quarterly earnings report. Its market cap has dropped 80% since 2000 — when it was one of the most valuable companies in the world. But company insiders and industry analysts tell Yahoo Finance that Intel's dramatic crash is the result of a slow deterioration spanning more than two decades.
The cause of Intel’s decay? A culture of complacency, short-term thinking, and lack of execution, all while its rivals got better. Today, Intel is hemorrhaging share in the very market it created, losing customers to AMD (AMD), Goldman Sachs analyst Toshiya Hari told Yahoo Finance. And its fledgling foundry business is bleeding cash while competitors snatch fat contracts leveraging machine technology that Intel once funded. In a statement to Yahoo Finance, an Intel spokesperson said, "We are executing with rigor on our plan to rebuild product and process leadership and improve our profitability…”
Trucking Congestion Costs $108.8 Billion
According to the latest Cost of Congestion study published by the American Transportation Research Institute (ATRI), traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022. This marks a new record-high national congestion cost. The total hours of congestion decreased slightly in 2022 from record 2021 highs due to a softening freight market, but the cost of operating a truck during this period increased at a much greater rate. As a result, the overall cost of congestion increased by 15% year-over-year. This level of delay is equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
In addition to the national findings, ATRI’s analysis also documented state and metropolitan delays and related cost impacts. The top 10 states each experienced costs of more than $8 billion, led by Texas ($9.17B), California ($8.77B), and Florida ($8.44B). Combined, the top 10 states ultimately account for more than half (52%) of trucking’s congestion costs nationwide. Additionally, the metropolitan areas with the highest congestion costs included New York City ($6.68B), Miami ($3.20B), and Chicago ($3.14B). The report also found that the trucking industry wasted over 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
Read more at Material Handling & Logistics
IBM's New Enterprise AI Models Are More Powerful Than Anything From OpenAI Or Google
IBM is zooming along with new open-source Granite Large Language Models (LLM) releases every few months. Granite 3.1 is the latest generation model, building upon the success of Granite 3.0. The model offers enhanced capabilities and performance optimized for business applications. The family of Granite 3.1 models boasts an impressive 128K token context window, a substantial increase from their predecessors. This expansion allows the models to process and understand much larger amounts of text -- equivalent to approximately 85,000 English words -- enabling more comprehensive analysis and generation tasks. By comparison, OpenAI's ChatGPT 3, which ignited the AI revolution, could handle only 2,000 tokens.
Big Blue claims its new Granite 8B Instruct model outperforms its rivals, such as Google Gemma 2, Meta Llama 3.1, and Qwen 2.5, on HuggingFace's OpenLLM Leaderboard benchmarks. Granite 3.1 also offers improved foreign language proficiency. Alongside English, it can now work with a dozen languages, including German, Spanish, French, Japanese, Portuguese, Arabic, Czech, Italian, Korean, Dutch, and Simplified Chinese. In short, if you have an international business, IBM has an LLM you can use.
From Amazon Warehouse To Port Strikes, Shippers And The DOT Are Preparing For An Unpredictable 2025
The Amazon warehouse strikes are the latest supply chain headwind facing companies this holiday season, and labor battles — which have been a prominent feature of trade disruptions this year — will contribute to “another year of disruption” for global shipping in 2025. The worker actions at Amazon organized by Teamsters union members come just weeks ahead of another possible strike by dock workers at 36 ports up and down the U.S. East and Gulf Coast. Industries like automotive and pharmaceuticals that rely on a just-in-time inventory model need to be implementing and acting on contingency plans, Mike Short, president of global forwarding at C.H. Robinson said, not only in advance of a new strike but also for any further labor unrest on the horizon in 2025.
The biggest potential labor disruption could come as soon as mid-January, with a Jan. 15 deadline for U.S. ports and the International Longshoremen’s Association to reach a deal on automation at East and Gulf Coast ports. Talks between the parties recently broke down again, while President-elect Donald Trump recently voiced full support for the union position of no automation at ports.
Electric Boat Awarded $235M Navy Contract
General Dynamics Electric Boat Corp., a key player in the U.S. defense industry, has been awarded a $235.4 million contract modification by the U.S. Navy. The agreement covers engineering, technical, and planning yard support for operational strategic and attack submarines, reinforcing the company’s critical role in maintaining the Navy’s undersea fleet.
The work will primarily be conducted at the company’s headquarters in Groton, Connecticut, which will handle 70% of the effort. Additional support activities will occur at Kings Bay, Georgia (13%); Bangor, Washington (10%); Pearl Harbor, Hawaii (3%); and locations in Rhode Island, including North Kingston and Newport (4% combined). The contract is expected to be completed by September 2025.