Member Briefing December 5, 2022
Manufacturing Sector Contracts for First Time Since 2020- ISM
Last month, the U.S. manufacturing economy shrank for the first time since the summer of 2020, according to the latest survey from the Institute for Supply Management. The ISM’s Purchasing Manager’s Index fell to 49.0% in November 2022, 1.2 points lower than in October and 5.5 points better than it was in May 2020. The period between last month and May 2020 was marked by strong demand for manufactured products that, despite the substantial hurdle of sourcing supplies and talent to make them, managed to drive manufacturing growth for about 30 months straight.
Other key indicators for manufacturing growth were mixed but mostly negative. The employment index fell from unchanged in October at 50% to 48.4%, indicating more trouble for businesses hiring employees. The production index, however, fell slightly but remained in growth territory, dropping 0.8 points to 52.3%.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- U.N. Says Deal Close on Resuming Russia Ammonia Exports Via Ukraine - Reuters
- Russian Warship Deployment Puts Ukraine on High Alert - CNBC
- Zelensky Aide Reveals Up to 13,000 War Dead - BBC
- Russians Systematically Loot Art, Ancient Relics From Ukraine’s Cultural Sites - WSJ
- Macron Blasted for Saying Moscow Needs 'Security Guarantees' to End the War - Euronews
- NATO Prepares for Cyber War - Politico
- Russian Forces Attempting Offensives on Two Fronts in Donbas, Says General Staff – Yahoo
- G-7 Joins EU On $60-Per-Barrel Price Cap on Russian Oil - AP
- Russia Will Not Export Oil Subject to Western Price Cap, Deputy Prime Minister Says - Reuters
- Zelenskyy Slams $60 Price Cap on Russian Oil as ‘Weak’ - Politico
- U.S. Intel Chief Says Russia is Using Up Ammunition in Ukraine Faster Than it Can Replace It - NBC
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
November Employment Report Shows U.S. Economy Added 263,000 Jobs, 14,000 in Manufacturing
The U.S. economy added 263,000 jobs in November, the Labor Department said Friday, a sign of continued strength in the labor market. The jobless rate remained at 3.7%. Wage growth has cooled in recent months but remains above the pre-pandemic pace. The figures provide little relief to officials who have been fighting to tamp down decades-high inflation amid concerns that elevated costs could become entrenched.
Manufacturers added about 14,000 jobs during the month to 12.9 million workers in November, the high point for the year. Average hourly earnings for private sector workers rose 18 cents to $32.82 last month and over the last 12 months, wages have grown 5.1%, according to Friday's data. Manufacturing wages were up 3 cents in November to $31.32. The report also said there were notable job gains in leisure and hospitality, health care as well as in government.
Council Email, Many Others, Affected by Rackspace “Security Incident”
Cloud computing services provider Rackspace says an ongoing outage affecting its hosted Microsoft Exchange environments and likely thousands of customers was caused by a security incident. "On Friday, Dec 2, 2022, we became aware of an issue impacting our Hosted Exchange environment. We proactively powered down and disconnected the Hosted Exchange environment while we triaged to understand the extent and the severity of the impact," the company said. "As we continue to work through the root cause of the issue, we have provided an alternate solution that will re-activate our customers’ ability to send and receive emails by providing access to an alternative email solution at no cost to them," Silva said.
"This solution will allow our impacted customers to resume regular business as soon as possible." If you are impacted detailed instructions on how to activate the free licenses and how to migrate users' mailboxes to Microsoft 365 are available in Rackspace's incident report. Council emails are working through this work around but any messages sent to us Friday should be resent.
The Council of Industry uses Constant Contact for email such as the Member Briefing and now have alternative access to emails. However, any email sent Friday or Saturday we did not see and apologize if we missed any urgent matters.
Read more at Bleeping Computer
U.S. COVID – Cases, Hospitalizations Increase
The US CDC is reporting 98.5 million cumulative cases of COVID-19 and 1.07 million deaths. Incidence for the week ending November 23 rose slightly over the previous week, increasing to 305,082 cases from 281,691 cases for the week ending November 16. Weekly mortality increased for the week ending November 23, with 2,644 reported deaths compared to 2,266 deaths the week ending November 16. Both new hospital admissions and current hospitalizations increased last week, up by 18% and 11%, respectively, over the previous week.
The BA.5 sublineage rapidly lost dominance over the past 2 weeks, now accounting for only 19.4% of sequenced specimens. The Omicron sublineages BQ.1.1 (29.4%) and BQ.1 (27.9%) together represent the two most dominant subvariants. A host of other Omicron sublineages—including BF.7, BA.4.6, XBB, BN.1, BA.2.75, BA.5.2.6, BF.11, BA.2, BA.2.75.2, and others—make up the remainder of cases.
Read more the Johns Hopkins Center for Health Security
NYS COVID Update
The Governor updated COVID data through December 2
Deaths:
- Daily: 26
- Total Reported to CDC: 75,867
Hospitalizations:
- Patients Currently in Hospital statewide: 3,316
- Patients Currently in ICU Statewide: 288
7 Day Average Positivity Rate - Cases per 100K population
- Statewide 7.57% - 24.17 positive cases per 100,00 population
- Mid-Hudson: 8.31% - 24.95 positive cases per 100,00 population
Useful Websites:
China Loosens Covid Restrictions as Public Anger Simmers
Local authorities across China are paring back some of their strictest Covid-19 control measures, just days after public anger spilled over into rare protests against a zero-tolerance approach that has kept the country largely isolated for three years. Authorities are also making a fresh push to vaccinate elderly and other vulnerable citizens—a segment of the population that public-health experts say needs higher vaccination rates before China can fully ease Covid controls without a large surge in serious cases that could overwhelm the country’s hospitals.
So far, the trajectory of easing restrictions has held even as recent outbreaks continue to buffet China, in places such as Beijing and the southern province of Guangdong. China’s National Health Commission said it recorded two Covid-related deaths on Saturday, along with tens of thousands of new locally transmitted infections.
House, Senate Negotiators Agree to Add $45B to Administration’s Defense Budget
An emerging compromise on annual defense policy legislation will endorse a $45 billion increase to President Joe Biden’s defense spending plans, according to four people familiar with the negotiations. The deal would set the budget topline of the fiscal 2023 National Defense Authorization Act at $847 billion for national defense, and would go as high as $858 billion when including programs that fall outside of the jurisdiction of the Senate and House Armed Services committees.
Though the major bill is still in the late stages of negotiations, lawmakers are poised to deliver a second straight bipartisan rebuke to the Biden administration’s defense spending plans. The White House sought $802 billion for national defense programs in its fiscal 2023 budget.
Biden Signs Law Bringing Imposing Deal Minus Sick Leave Workers Demanded
President Joe Biden on Friday signed legislation to bring to a close any threat of a rail strike by enshrining into statute a contract between labor unions and the freight rail industry. That closes out months of chaotic negotiations that brought the nation to the brink of a rail shutdown that could have decimated the economy. But in so doing, Democrats have angered one of their key political constituencies and rankled members of their own party for not including paid sick leave for more than 100,000 workers that had threatened to strike.
The high-profile standoff centered on rail workers’ desire for additional paid sick leave and unions’ inability to get rail operators to budge on the issue. Railroads argued that the contracts already offer generous paid time off and other provisions available if workers fall ill, but rail employees countered that those policies require advance notice that isn’t feasible in common situations like having to take a sick child to the doctor unexpectedly.
NYISO Warns of High Electricity Prices as it Forecasts Sufficient Supply to Meet Peak Demand This Winter
The New York Independent System Operator reported last week that it expects electricity supplies will be sufficient to meet peak demand this winter of 23,893 MW based on expected winter temperatures, nearly 3% higher than last winter’s actual peak demand of 23,235 MW. New York’s electric grid is a summer peaking system, but meeting reliability criteria in the winter is a “little bit more challenging so we pay a lot more attention nowadays to winter readiness,” President and CEO Rich Dewey said at a news briefing.
The grid operator’s extreme winter weather scenario shows that peak demand could increase to as much as 26,086 MW, higher than its previous all-time winter peak. After analyzing system conditions for the winter, the key finding from six scenarios is “sufficient supply to meet forecast demand,” with the lowest projected margin of about 1,600 MW, said Aaron Markham, vice president of operations. “However, as we have been highlighting for over a year, national and international economic conditions are contributing to a spike in consumer bills,” he said.
Lack of Wind Pushes Europe’s Power Prices Higher, Just as Cold Sets In
Colder weather in many places in Europe is kicking in at the same time wind speeds have fallen, bolstering demand for gas while reducing the ability of wind farms to generate electricity. This week, wind speeds in Hamburg fell to around 5 meters a second, or about 11 miles an hour, according to the weather forecasting site windy.com. That is the minimum speed required for electricity generation. The still spell also comes as France, a key power exporter in Europe, is struggling to get a big chunk of its fleet of nuclear power plants up and running after maintenance issues. Meanwhile, hydropower generation has also struggled. River levels dropped to multiyear lows after the continent experienced a scorching summer.
Day-ahead power prices in Germany for Friday were at 361 euros a megawatt hour, equivalent to $377, up from €108 in the middle of last month, according to data from European Energy Exchange AG. Natural-gas prices have also risen sharply given the extra demand, with benchmark Dutch TTF prices on Thursday sitting above €158 a megawatt hour, having sat at €123 a megawatt hour at the start of the week.
New York’s Power Grid At Risk: Report
The New York Independent System Operator (NYISO), Wednesday, released its The 2022 Reliability Needs Assessment (RNA) on the future reliability of the electric grid that finds thinning reliability margins over the next decade driven by the retirement of gas-fired generation and electrification. The report also concluded that future reliability is dependent on the coordinated scheduling of new generation and transmission projects, as well as close monitoring of changes in energy demand, public policy, and extreme weather.
While the RNA does not identify any immediate reliability needs, resource adequacy and transmission security margins are tightening across the New York grid through time. New York will likely experience even smaller margins if additional power plants become unavailable or if demand is greater than forecasted, the report stated. If the margins are totally depleted, the risk of a reliability violation is increased.
Thruway Authority to Consider Toll Hikes for E-ZPass Holders
The state Thruway Authority will propose the first widespread toll hikes on E-ZPass holders since 2010 in a meeting Today with its board of directors. If approved, New York E-ZPass tag holders will see a 5 percent increase beginning Jan. 1, 2024, with a second 5 percent increase to follow in January of 2027. On the Mario Cuomo Bridge, a proposed 50-cent annual increase for New York E-ZPass holders would go into effect over a four-year period from 2024 to 2027, raising the base-rate toll on the bridge from its current $5.75 to $7.75.
The 570-mile Thruway system stretches from New York City to Lake Erie. It includes the 496-mile mainline Thruway, plus five additional highways: the Berkshire Connector, the Garden State Parkway Connector, the New England Thruway (I-95), the Niagara Thruway (I-190) and the Cross-Westchester Expressway (I-287). Since November 2020, the entire network has used an all-electronic, open-road cashless-tolling system that reads transponders such as the E-ZPass, which the vast majority of Thruway drivers use, according to Dougherty. Drivers without an E-ZPass are sent a bill in the mail.
Read more at the Albany Times Union
OPEC+ Keeps Oil Curbs Despite Russia Price Cap
OPEC+ agreed Sunday to stick to its oil-output targets two days after the Group of Seven nations agreed to a price cap on Russian oil, amid mounting concerns over new Covid-related lockdowns in China and lingering uncertainty over Russia’s ability to export crude. During a virtual meeting, the Organization of the Petroleum Exporting Countries and the Russia-led bloc—a group collectively known as OPEC+—decided to maintain production cuts of 2 million barrels a day initially agreed to in October, OPEC said.
Known in OPEC parlance as a “rollover,” it will allow the group time to assess the market impact of the price cap of $60 a barrel on Russian oil, the delegates previously said. Some members had previously considered the possibility of a production increase to fill a possible gap in Russian output. But members are now grappling with oil prices that have fallen 13% in the past month.
Post-Election, it’s Veto Season for Kathy Hochul
While hundreds of bills passed both the state Senate and Assembly months ago, many are still waiting for their fate to be determined by Gov. Kathy Hochul before the official end of the legislative session at the end of the year. With the stress of the gubernatorial election behind her, the governor has been busy reviewing bills and delivering vetoes left and right.
Hochul recently vetoed 39 bills that would have created commissions and task forces to address various issues impacting the state – including acts that would establish a gambling advisory council, a fentanyl abuse and overdose prevention task force, a joint commission on affordable housing and a group home families working group. Supporters of some of the popular vetoed bills are not happy with the governor’s decision, NY1 reported. One noteworthy veto was for a bill that would establish a cryptocurrency and blockchain study task force.
Apple Makes Plans to Move Production Out of China
Apple Inc. AAPL -0.34%decrease; red down pointing triangle has accelerated plans to shift some of its production outside China, long the dominant country in the supply chain that built the world’s most valuable company, say people involved in the discussions. It is telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam, they say, and looking to reduce dependence on Taiwanese assemblers led by Foxconn 2354 4.05%increase; green up pointing triangle Technology Group.
Turmoil at a place called iPhone City helped propel Apple’s shift. At the giant city-within-a-city in Zhengzhou, China, as many as 300,000 workers work at a factory run by Foxconn to make iPhones and other Apple products. At one point, it alone made about 85% of the Pro lineup of iPhones, according to market-research firm Counterpoint Research.
Lawmaker Says EU Should Complain to WTO Over U.S. Inflation Reduction Act
The European Union should file a complaint with the World Trade Organization (WTO) in the next few months regarding the United States' green energy subsidy package, the head of the European Parliament's trade committee was reported as saying on Sunday. The U.S. and the EU have so far sought to be conciliatory about the bill, saying last week they would seek to tackle the bloc's concerns about the package, known as the U.S. Inflation Reduction Act.
EU members worry the $430 billion bill, with generous tax breaks for U.S. companies, may disadvantage European companies from car manufacturers to makers of green technology. read more. Officials from both sides are due to address the issue at a meeting next week, but Bernd Lange, the chair of EU parliament's trade committee, said he no longer expects a negotiated solution as only small changes could still be agreed through talks.
Amid ‘Triple Squeeze’ of Pressures, HR Setting its Sights on Leader Effectiveness
If there’s one word to describe the mood of HR leaders as they get ready to head into 2023, it may be “uncertain.” Management consulting firm Gartner describes that uncertainty as being fueled by a “triple squeeze” of pressures: economic upheaval, CEOs increasingly prioritizing the needs of their workforces and the mandate for HR to manage multiple tradeoffs (for instance, balancing cost savings amid a potential economic downturn with the need for increased talent investment). It’s with this context that HR leaders are lining up their priorities for 2023, which, according to a new survey by Gartner of 800 HR professionals, puts leader and manager effectiveness squarely at the top of the list.
Leadership jumped to that spot from third last year, while organizational design stayed steady at No. 2. Other shifts include employee experience rising from sixth to third and recruiting claiming the fourth spot after ranking seventh last year.