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Member Briefing December 5, 2024

December 5, 2024

Posted By: Harold King in Daily Briefing,

Top Story

JOLTS Survey: Manufacturing Job Openings Dip

The number of U.S. job openings in manufacturing edged down in October, while overall job opening numbers rose slightly, according to the U.S. Bureau of Labor Statistics. There were 465,000 seasonally adjusted open positions in manufacturing in October, a small decrease from 478,000 in September. The number was down significantly from October 2023, when there were 576,000 seasonally adjusted U.S. job openings in manufacturing.

Job availability in durable goods moved down in October, to 317,000 seasonally adjusted openings from 321,000 in September. The number was a more significant decrease from October 2023, when the total was 364,000.
In nondurable goods, openings came in at a seasonally adjusted 148,000, a mild decline from September’s 156,000. In October 2023, there were 213,000 seasonally adjusted manufacturing job openings in nondurable goods.
Quits in manufacturing inched up slightly in October to a seasonally adjusted 209,000 from September’s 200,000.
Layoffs and discharges declined more, to 111,000 from 159,000. These decreased most notably in durable goods, to 55,000 in October from 92,000 in September.

Read More at The BLS

Commerce Department: U.S. Factory Orders Rose in October

Orders for manufactured goods increased in October, bucking two months of declines, the Commerce Department said Wednesday. Orders totaled $586.7 billion, up from $585.6 billion in September. The 0.2% month-over-month improvement was in line with the consensus forecast from economists surveyed by The Wall Street Journal. Durable-goods orders grew 0.3% to $286.8 billion, including a 0.5% increase in orders for transportation equipment. Orders for nondurables were up 0.1% to $299.9 billion.

The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, fell 0.2% in October, as initially reported. Shipments of core capital goods increased 0.3% instead of rising 0.2%, as estimated last month. Nondefense capital goods orders increased 1.5% instead of 1.4%, as initially reported. Shipments of those goods declined 1.8% rather than by the initially estimated 1.9%. Weak shipments suggest softer business investment in equipment in the fourth quarter after two straight quarters of strong growth.

Read More at Reuters

ISM Services PMI Slips More Than Expected In November, But Still Signals Growth

ISM US Services PMI slipped to 52.1 in November from 56.0 in October, missing the 55.5 consensus estimate, according to Institute of Supply Management data release on Wednesday. While the index fell month on month, the reading of over 50 marked the fifth straight month of expansion in the services sector and the 51st time in 54 months that the index signaled growth. Here are some key numbers.

Prices: 58.2 vs 56.4 consensus and 58.1 prior.
Employment: 51.5 vs 53.0 consensus and 53.0 prior.
New orders: 53.7 vs. 56.6 consensus and 57.4 prior.
Business activity/production: 53.7 vs. 57.2 prior.
Supplier deliveries: 49.5 vs. 56.4 in October. The index was in contraction territory for the sixth time this year, indicating faster supplier delivery performance, ISM said.

Read more at Seeking Alpha

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Policy and Politics

New York Manufacturing Alliance Pushes for ‘Tax Parity’ for Pass-Through Manufacturers

In 2014, a zero percent corporate franchise tax rate was enacted for manufacturers organized as C-corps. The majority of manufacturers in New York, however, are small-to-medium sized companies organized as pass-through entities. These manufacturers do not currently benefit from the existing zero percent rate. In fact they pay one of the highest income tax rates in the United States, which, unlike their competitors in other states, or C-corps here in New York, they must pay before they can invest in their employees, research and development (R&D), and capital expenditures of the business.

Led by the Manufacturing Alliance of New York (MANY) in which the Council of Industry is a founding member, these manufacturers are looking for their home state of New York to provide them with the opportunity they need to continue to invest and grow here. The Alliance sent a letter to Governor Hochul asking her to include the item in the Executive Budget proposal and we are providing members interested in supporting that effort the opportunity to contact the Governor.

Read the Letter

Contact the Governor to support tax parity

New Bill Aims To End FDA Drug Shortage By Offering Compounding Solutions

Members of Congress are considering a bill that could make it easier for compounding pharmacies to use emergency rules to create alternatives to patented, brand-name drugs that are in short supply. Rep. Abigail Spanberger, D-Va., has introduced the House version of the End Drug Shortages Act bill together with Rep. Adrian Smith, R-Neb. Sen. Tim Kaine, D-Va., joined with Sen. Tom Cotton, R-Ark., to introduce a Senate version.

The bill would require a drug manufacturer to notify the Food and Drug Administration when a surge in demand for a drug might be straining the manufacturer's capacity to meet demand for the drug, according to a summary posted by Spanberger. Officials at the FDA are tracking supply concerns for about 275 drugs, including everything from saline solution to some of the popular GLP-1 anti-diabetes and anti-obesity medications, such as semaglutide and liraglutide.

Read more at Benefits Pro

DOL Proposes Rule To Phase Out Subminimum Wage For Workers With Disabilities

The FLSA allows employers to obtain subminimum wage certificates under Section 14(c), which stipulates that workers with disabilities may be paid below minimum wage if their disabilities affect their earning or productive capacity. Such disabilities may include blindness, mental illness, developmental disabilities, cerebral palsy, alcoholism and drug addiction, DOL specified in a fact sheet. However, these disabilities must “actually” impair the worker’s capacity; “the fact that a worker may have a disability is not in and of itself sufficient to warrant the payment of a subminimum wage,” DOL noted.

The vast majority of subminimum wage workers — roughly 90%, as of 2021 — have an intellectual or developmental disability, per a Government Accountability Office report. Nearly half make less than $3.50 per hour, according to DOL; 14% make $1 or less per hour. Under the proposed rule, the Wage and Hour Division would stop issuing new subminimum wage certificates after the effective date of the final rule. For current certificate holders wishing to renew, DOL would continue to grant renewal applications for a period of three years, with all renewals expiring no later than three years from the effective date of the final rule.

Read more at HR Dive

Health and Wellness

Tactics for Addressing Mental Health for Frontline Workers

The Health Action Alliance hosted the 2024 Mental Health Equity at Work Summit during World Mental Healthy Day, which was held on October 10. The event included a panel discussion on strategies to improve mental health for frontline employees. The discussion included Amy Small, managing director of the Health Action Alliance, Chris Forbeck, director of Total Rewards at Northwestern Energy, and Xiomara Arroyo, senior vice president and Market Manager at PNC Bank. Here are some takeaways.

Meet workers where they are: Traditional communication methods like emails might not reach all employees, especially frontline workers. Find creative ways to engage employees through in-person conversations or on-the-job moments during their workday.
Incentivize participation: Financial incentives like reduced premiums or HSA contributions can encourage employees and their families to engage with wellness programs.
Offer flexible access to mental health resources: Provide multiple ways for employees to access mental health support, including virtual, telephone, and in-person options. Also, consider offering services that support all aspects of employees' well-being, including mental health, financial wellness, and caregiving responsibilities.
Promote community involvement through paid volunteer time: Encourage employees to engage with their communities by offering paid time off for volunteering. This strengthens your organization's culture and allows employees to connect with causes they care about, enhancing their sense of purpose and well-being.
Extend benefits to families: Offering wellness and support programs to employees as well as their spouses and dependents can significantly increase the reach and effectiveness of these resources.

Read more at EHS Today

Transition 2024

Industry News

Homebuyer Demand For Mortgages Jumped 6%, As Interest Rates Fell To The Lowest Level In Over A Month

US mortgage rates dropped to the lowest level since mid-October and spurred a financing flurry for home purchases during the week that included the Thanksgiving holiday. The contract rate on a 30-year mortgage decreased 17 basis points, the biggest weekly slide since August, to 6.69% in the week ended Nov. 29, according to Mortgage Bankers Association data released Wednesday.

The group’s index of home purchase applications advanced a seasonally adjusted 5.6% to the highest level since the start of the year. MBA’s gauge of refinancing dropped for the ninth week in the last 10 to the lowest level since May. The figures are prone to wide swings around the year-end holidays, evidenced by a roughly 18% jump over the past two weeks.

Read more at Yahoo Finance

Losses In China Lead To $5B Charge For General Motors As It Cuts The Value Of Its Assets

The poor performance of General Motors' Chinese joint ventures is forcing the company to write down assets and take a restructuring charge totalling more than $5 billion USD in the fourth quarter of this year. The Detroit automaker said in a regulatory filing Wednesday that it will cut the value of its equity stake in the ventures by $2.6 billion to $2.9 billion when it reports its results early next year. In addition, GM will take $2.7 billion worth of restructuring charges, most of it during the fourth quarter. The noncash charges will reduce the company's net income, but they will not affect adjusted pretax earnings, GM said in the filing with the U.S. Securities and Exchange Commission.

GM for years has owned 50 per cent of its joint venture with SAIC General Motors Corp. and has other joint ventures, including a finance arm. The ventures used to be a reliable source of equity income for the company, but have swung to losses in the past year. The ventures lost $347 million from January through September, compared with a profit of $353 million in the same period of 2023. Still, GM expects to post a full year net profit of $10.4 billion to $11.1 billion. China has become an increasingly difficult market for foreign automakers, with BYD and other domestic companies raising their quality and reducing costs. The country also has subsidized domestic automakers.

Read more at The CBC

Cargill Cuts 5% Of Global Workforce After Profits Decline

Agribusiness giant Cargill is slashing 5% of its global workforce in an effort to streamline operations after reporting a rare decline in profits earlier this year. The job cuts will affect an estimated 8,000 workers. In a statement to sister publication Agriculture Dive, Cargill said layoffs were necessary for the company to take advantage of changing trends in agriculture as it looks to “evolve and strengthen our portfolio.”

Tumbling global crop prices have pressured earnings at Cargill and other commodity traders including Archer-Daniels-Midland. As a broader economic downturn in the agricultural sector hits all parts of the industry, Cargill’s other businesses — including its vast meat processing operations — have also suffered. Cargill reported $160 billion in annual revenue in 2024, close to a 10% drop from the previous year. In August, the company outlined plans to consolidate operations after less than one-third of its businesses met their earnings goals.

Read more at Manufacturing Dive

Intel Launches Arc B-Series Graphics Cards for Budget Gamers

Intel has announced its next-generation Arc B-series desktop graphics cards, based on its new Xe2 architecture dubbed "Battlemage". Two new graphics cards, the Intel Arc B570 and B580, have been announced for gamers running displays at 1440p resolution, starting at an attractive $219 USD. Both Intel B-series GPUs are primed for 1440p gaming with ray tracing and include upgraded versions of XeSS, the machine learning-based upscaling technology, and other AI features. Besides XeSS 2, the GPUs include XeSS frame generation and XeLL, a latency-reduction technology not unlike Nvidia's Reflex.

Intel claims that the Arc B580 will be 10% faster than the Nvidia Geforce RTX 4060 on average while being 24% faster than the last-gen Arc A750. While its raw performance seems impressive, what pushes Intel's cards into the recommended tier is their increased VRAM capacity. While the RTX 4060 and AMD's Radeon RX 7600 max out at 8 GB, Intel's graphics cards include 10 GB and 12 GB of VRAM in the Arc B570 and B580 respectively. This is helpful for many games at 1440p, as we've seen many triple-A games choking on cards with lower amounts of VRAM.

Read more at Newsweek

Eli Lilly’s Zepbound Beats Novo Nordisk’s Wegovy in First Head-to-Head Study

In the first head-to-head test, Eli Lilly’s Zepbound obesity drug helped people lose significantly more weight than its main competitor, Novo Nordisk’s Wegovy. People taking Zepbound lost 20.2% of their body weight on average after 72 weeks of treatment in the Lilly-sponsored study, compared with a 13.7% loss for Wegovy patients, Lilly said Wednesday. That translated into an average 50-pound loss for people who took Zepbound, while Wegovy users lost 33 pounds.

Lilly’s new study is the first randomized clinical trial to demonstrate that Zepbound could induce more weight loss than Wegovy in head-to-head testing. Previous studies sponsored by Lilly and Novo Nordisk found that each of the drugs helped people who are obese lose significant amounts of weight, but those trials didn’t compare Zepbound and Wegovy against each other. Lilly will probably cite the results from its new study in the company’s Zepbound marketing. It could give Lilly an edge with doctors and patients in one of the fastest-growing and most lucrative prescription-drug markets.

Read more at The WSJ

Honeywell To Sell PPE Business For $1.3B

Honeywell International is selling its personal protective equipment business for $1.3 billion to Protective Industrial Products, a portfolio under private equity firm Odyssey Investment Partners, the company announced last month. The company’s PPE business has approximately 5,000 employees and operates 20 manufacturing facilities and 17 distribution sites across the U.S., Mexico, Europe, North Africa, Asia Pacific and China, according to the release.

The pending deal includes Honeywell’s PPE brands such as Fendall, Fibre-Metal, Howard Leight and KCL, according to Protective Industrial Products’ press release. The sale is expected to close in the first half of 2025. The divestiture is also part of Honeywell’s plans, announced in October 2023, to shift its focus to three major areas: automation, aviation technology and clean energy transition.

Read more at Manufacturing Dive

NASA Monitoring 39-Foot Asteroid Nearing Earth

An asteroid twice the size of a giraffe is due to pass closer to our planet than the moon today. The asteroid, named 2024 XH, is roughly 39 feet in diameter according to NASA's Jet Propulsion Laboratory (JPL), though it may be anywhere between 30 feet and 69 feet across, according to JPL's Center for Near-Earth Object Studies. In comparison, an average male giraffe grows to around 16 to 18 feet tall.

2024 XH is expected to soar past us at a distance of 207,000 miles, coming closer than our moon's 238,900-mile orbit. It will travel at a mind-boggling speed of 24,800 mph, several times faster than even the fastest of bullets. Asteroids like 2024 XH that travel within about 120 million miles of the sun, or 30 million miles of Earth, are known as Near-Earth Objects or NEOs. NEOs that are larger than 460 feet in diameter and also come within 4.6 million miles of Earth's orbit are classified as potentially hazardous asteroids (PHAs) or potentially hazardous objects (PHOs).

Read more at Newsweek

Breaking Down Trump’s Tariffs on China and the World, in Charts

Since Trump began hiking tariffs on China in 2018, the average effective tariff rate on Chinese imports has jumped from around 3% to roughly 11%, according to Trade Partnership Worldwide’s analysis of U.S. Census Bureau data as of September. The average effective tariff rate on imports from all countries rose from more than 1% to more than 2%, according to the firm, which provides data and research to business groups. Under higher tariff levels, China’s share of U.S. imports has already waned, while imports from the rest of the world have risen. Still, China is the U.S.’s second-largest supplier of goods.

Now Trump is poised to ratchet up the pressure on China and other trading partners again, recently proposing an additional 10% tariff on all products from China and a 25% tariff on all Mexican and Canadian imports. That could upend the U.S.-Mexico-Canada Agreement he signed in 2020 that maintained largely duty-free trade between the three North American countries.

Read more at The WSJ

EPA Issues 2024 PFAS Progress Report – 3 Takeaways

The U.S. EPA’s most recent progress report on PFAS actions highlights a year of significant new regulatory and research updates, some of which will continue to have long-term impacts on the manufacturing industry. The third annual progress report compiles 2024 updates related to regulations, research and other actions to curb health and safety impacts of the chemicals. It comes in the last few months of President Joe Biden’s administration, which in 2021 created its PFAS Strategic Roadmap meant as a master to-do list “to confront PFAS contamination head on,” according to the report.

Here are the top takeaways from the progress report and how EPA actions affected the industry this year: (1) The regulatory landscape is still evolving after notable EPA decisions. (2) Keeping PFAS out of new products could help ease future PFAS management efforts. (3) More PFAS research is ongoing, but questions remain for the new administration.

Read more at Manufacturing Dive

Member Briefing December 9, 2024December 9, 2024 Workforce Newsletter 39 - December 5, 2024December 5, 2024