Member Briefing December 27, 2022
2023 Economic Outlooks: Opinions from A Variety of Industries
The primary task at IndustryWeek is covering the manufacturing world, but they can’t get to every topic that might interest their readers. Their parent company, Endeavor Business Media, however, publishes many other publications that regularly provide insights into various major industries and niche markets. These include the chemical industry, energy industry, logistics industry, construction industry, and others.
As we wrap up 2022, here’s a look at how experts in several markets see 2023 developing.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Six Factors That Will Shape Russia’s Winter War in Ukraine - WSJ
- Ukraine Claims Heavy Russian Losses in South - WSJ
- Three Killed in Second Attack on Engels Base Deep Inside Russia - CNBC
- Putin Says Russia Ready to Negotiate Over Ukraine, Kyiv Says Moscow Doesn't Want Talks - Reuters
- Zelensky Urges Ukrainians to Persevere as Putin Says Moscow Ready for Long War - WSJ
- Russia Suggests it is Ready to Resume Gas Sales to Europe Through Yamal-Europe Pipeline
- North Korea Sold Arms to Russia's Wagner Group, US says - BBC
- Volatile Rouble Recovers Ground After Biggest Weekly Slump Since July – Reuters
- The Making of a Young Hero of Ukraine - BBC
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
U.S. Congress Passes $1.66 Trillion Funding Bill, Biden to Sign
The Democratic-controlled U.S. House of Representatives on Friday passed a $1.66 trillion government funding bill that provides record military funding and sends emergency aid to Ukraine, hours before a midnight deadline. The spending bill for the fiscal year ending Sept. 30 was approved on a largely party-line vote of 225-201, following Senate passage the previous day. President Joe Biden said he would sign the hard-fought legislation, which also includes additional funding to protect workers' rights and more job-training resources.
The 4,000-plus page bill passed the Senate on a bipartisan vote of 68-29, with the support of 18 of the 50 Senate Republicans including Senate Minority Leader Mitch McConnell. Just nine of the 213 House Republicans backed it.
Q3 GDP Revised Up to 3.2%
Gross domestic product grew at a 3.2% annual rate in the third quarter, according to the Commerce Department. That’s higher than the Commerce Department’s previously estimate of 2.9 percent. Economists had expected the pace of GDP growth to be unrevised. The Commerce Department said upward revisions to consumer spending and non-residential fixed investment were partly offset by a downward revision to private inventory investment.
The notable rebound in GDP in the third quarter reflected increases in exports, consumer spending, non-residential fixed investment, and government spending along with a decrease in imports, which are a subtraction in the calculation of GDP.
U.S. COVID Update - Omicron Subvariant XBB Jumps to 18% of U.S. COVID Cases, CDC Says
The highly-contagious Omicron subvariant XBB has surged to more than 50% of COVID-19 cases in the northeastern United States and risks spreading fast as millions of Americans begin holiday travel. In the week ended Dec. 24, XBB was estimated to account for 18.3% of the COVID-19 cases in the United States, up from 11.2% in the previous week, according to the U.S. Centers for Disease Control and Prevention on Friday (CDC).
The subvariant is currently dominant in the Northeast, but accounts for fewer than 10% of infections in many other parts of the country, the CDC said. Andrew Pekosz, a virologist at the Johns Hopkins Bloomberg School of Public Health in Baltimore, said holiday travel in the United States could speed up the XBB subvariant's spread across the country.
NYS COVID Update
The Governor updated COVID data through December 23
- Daily: 32
- Total Reported to CDC: 76,528
- Patients Currently in Hospital statewide: 3,719
- Patients Currently in ICU Statewide: 366
7 Day Average Positivity Rate - Cases per 100K population
- Statewide 7.86% - 28.76 positive cases per 100,00 population
- Mid-Hudson: 8.10% - 30.42 positive cases per 100,00 population
Covid-19 and Opioid Overdoses Contributed to U.S. Life Expectancy Falling to Lowest Level Since 1996
Life expectancy in the U.S. fell again last year to the lowest level since 1996, federal data showed, after Covid-19 and opioid overdoses drove up the number of deaths. Covid-19 was the third-leading cause of death for a second consecutive year in 2021, the Centers for Disease Control and Prevention said Thursday. Overdose deaths have risen fivefold over the past two decades. Heart disease remained the leading cause of death in the U.S., followed by cancer. The CDC in its final count said there were 416,893 deaths last year where Covid-19 was the underlying cause, up nearly 19% from the 350,831 deaths counted during the pandemic’s first year.
The death rate for the U.S. population increased by 5%, cutting life expectancy at birth to 76.4 years in 2021 from 77 years in 2020. The CDC in August released preliminary estimates demonstrating a similar decline. Before the pandemic, in 2019, life expectancy at birth in the U.S. was 78.8 years. The decline in 2020 was the largest since World War II.
U.S. Retail Sales Grew 7.6% in Holiday Season - Mastercard Data
U.S. retail sales rose 7.6% between Nov. 1 and Dec. 24, which encompasses a majority of the holiday season, as steep discounts lured deal-hungry consumers, a Mastercard report showed on Monday.
Retailers including Amazon.com Inc and Walmart Inc (WMT.N) in the United States offered large discounts during the holiday season to get rid of excess stock and bring back inventories to normal levels. That led to strong demand for everything from toys to electronics during the five-day-long period between Thanksgiving and Cyber Monday. However, sales of electronics dropped 5.3% over the broader roughly two-month period, according to the Mastercard SpendingPulse report. Sales in the apparel and restaurants categories, rose 4.4% and 15.1%, respectively, helping boost the overall number. Online sales jumped 10.6% in the period, slightly less than the 11% increase last year, the Mastercard report said.
China Has Stopped Publishing Daily COVID Data Amid Reports of a Huge Spike in Cases
China's National Health Commission said in a statement that it would no longer publish the data daily beginning Sunday and that "from now on, the Chinese CDC (Center for Disease Control and Prevention) will release relevant COVID information for reference and research." The NHC did not say why the change had been made and did not indicate how often the CDC would release data.
China is experiencing a surge in new cases since restrictions were eased. In China's eastern Zhejiang province alone, the provincial government said it was experiencing about 1 million new daily cases. Meanwhile, Bloomberg and the Financial Times reported on a leaked estimate by top Chinese health officials that as many as 250 million people may have been infected in the first 20 days of December.
Corporate Profits Are Up 10% Over the Same Quarter Last Year
Commerce Department previously estimated reported that last quarter, American companies took home about 10% more than they did the same time a year ago. Corporate profits are up in large part because prices are up. Even companies that are selling fewer products are seeing higher profits, said George Pearkes, macro strategist at Bespoke Investment Group. “They’re able to push so much pricing power that it more than makes up for the decline in volumes,” he said. “And revenues are up at a really healthy pace because of that.”
Prices are higher because companies are passing along higher costs and people are willing to pay higher prices. Household balance sheets — for the most part, Pearkes said — are still in good shape. “And combined with strong wage growth and strong employment growth, tight labor markets, you’re in a situation where consumer demand has really held up much better than anyone really expected, including myself,” said Pearkes.
Hudson Valley Projects Included in Omnibus
Fifteen community projects totaling $29 million, proposed by Congressman Sean Patrick Maloney (D, NY-18), have been included in new federal government funding legislation. That is the maximum number of projects allowed by the Appropriations Committee and includes expanding local healthcare options, repairs to major sewer systems, funding for public safety resources and more.
Among the project is $1,125,000 for SUNY Orange for their FoodTEC initiative, a workforce development program in the food service industry and food manufacturing industries. Follow the link below for a full list of projects to receive funding in the 18th Congressional District.
New York Lost More High-Earning Taxpayers in Pandemic-Wracked 2020
According to just-released Internal Revenue Service (IRS) data, the number of New York tax filers with adjusted gross income above $1 million decreased to 54,370 in 2020, from 55,100 in 2019. That 1.3 percent decline came even as the number of millionaire filers nationally was growing by nearly 10 percent, from 554,340 to 608,540. Including the latest numbers, New York’s share of the nation’s income millionaires fell from 9.9 percent in 2019 to 8.9 percent in 2020—down significantly from 12.7 percent in 2010, the year after the state enacted a supposedly temporary higher rate on millionaire earners. This tax hike was repeatedly extended and finally made permanent within a larger package of soak-the-rich tax increases enacted in April 2021 as part of the FY 2022 budget.
Despite the lower number of filers, the adjusted gross income (AGI) of New York’s income millionaires in 2020 increased by about 10 percent over the previous year. Nationally, however, AGI in this category increased fully twice as fast, by 21 percent. As a result, the New York resident share of all income reported by this group of taxpayers also fell, to 10.4 percent in 2020 from 11.3 percent in 2019.
DiNapoli: Public Authority Debt Ballooned to $329 Billion
State and local public authorities reported debt outstanding totaling more than $329 billion in their most recently reported fiscal years, an increase of 23% ($61.5 billion) since 2017, according to a report released today by State Comptroller Thomas P. DiNapoli.
Public authorities have an outsized impact in New York where they are responsible for a wide range of public functions, particularly in the areas of transportation, energy, environmental protection, housing and economic development. As of July 2022, there were 1,178 public authorities in New York, including 876 local, 294 state (including subsidiaries), and eight interstate or international authorities. Public authorities generally are not subject to many of the oversight and transparency requirements that apply to other government agencies, or the same types of controls over their contracting practices and day-to-day operations.
What to Expect for the Economy in 2023
The U.S. Chamber of Commerce recently convened its Chief Economists Committee to discuss members’ outlooks for the economy in 2023. The committee consists of chief economists from member businesses and helps the Chamber formulate economic policies and analysis. A Mild But Short Recession is Likely in 2023
The consensus among Committee Members is that the U.S. will experience a mild but short recession in the middle of 2023 caused by consumer and business spending falling because of rising interest rates. Further contributing to the downturn would be consumers finally exhausting historic savings built up during the COVID-19 pandemic, meaning they would no longer have that source of money to keep spending at pace with inflation.
Hector LaSalle Nominated to Become New York’s Chief Judge
New York Gov. Kathy Hochul on Thursday selected Hector LaSalle to become chief judge of the state Court of Appeals, a key position that would make him the state’s top jurist and put him in charge of the entire court system — if the Senate confirms his nomination. The son of Puerto Rican parents, LaSalle would be the first Latino to serve as chief judge, according to Hochul’s office.
LaSalle’s history as a prosecutor is likely to draw criticism from progressives, many of whom have long been calling for the court to have more representation from judges who previously worked as civil-rights attorneys or public defenders. His confirmation in the Democrat-dominated Senate is not a given, despite his nomination by a Democratic governor. Labor unions, key Democratic allies in New York, are likely to oppose Hochul’s pick.
Hudson Valley Employment, Workforce Numbers
The November 2022 unemployment rate for the Hudson Valley Region is 2.5 percent. That is up from 2.3 percent in October 2022 and down from 3.2 percent in November 2021. In November 2022, there were 29,100 unemployed in the region, up from 26,600 in October 2022 and down from 36,100 in November 2021. Year-over-year in November 2022, labor force increased by 34,900 or 3.1 percent, to 1,157,200.
Manufacturing employment in the region stood at 42,100, 400 fewer than October and 500 fewer than November 2022.
Applications for Jobless Claims Up Slightly Last Week
Applications for jobless claims for the week ending Dec. 17 inched up by 2,000 to 216,000 from the previous week’s 214,000, the Labor Department reported Thursday. Jobless claims are generally viewed as a representation of layoffs. The four-week moving average of claims, which smooths out some of the week-to-week swings, fell by 6,250 to 221,750.
The technology sector has also gone into belt-tightening mode, with Facebook parent company Meta, Twitter, Amazon and DoorDash all announcing significant layoffs in recent months. About 1.67 million people were receiving jobless aid the week that ended Dec. 10, about 6,000 fewer than the week before.
Toyota's November Global Vehicle Production Rises 1.5% to Record 833,104
Toyota Motor Corp (7203.T) reported on Monday a 1.5% rise in November global vehicle output, reaching a new record of 833,104. Domestic production slid 3.3% to 266,174 vehicles, while overseas output rose 3.8% to an all-time high of 566,930 for the month. The automaker reported earlier this month it expected to produce 700,000 vehicles in January and held to a reduced goal of 9.2 million in the year through March.
Global sales and production in November exceeded last year's levels due to solid demand, particularly in North America, and a recovery in parts supplies that had been impacted by COVID-19 slowdowns, Toyota said.