Member Briefing December 8, 2022
US Trade Deficit Rose in October as Exports Dip
A drop in exports helped widen the U.S. trade gap in October, government figures showed Tuesday, with decreases seen in shipments of industrial supplies and consumer goods. The overall trade deficit rose $4 billion to $78.2 billion in October, Commerce Department data showed, slightly more than expected. Exports have weakened in recent months as global economies grapple with inflation and higher interest rates, while a stronger US dollar has made American goods more pricey for foreign consumers.
Imports picked up in October to $334.8 billion on goods including automotives and parts, but demand for consumer products eased with a drop in items like mobile phones and sporting goods. Meanwhile, the value of exports eased to $256.6 billion on a fall in industrial supplies and materials such as natural gas and petroleum products. Consumer goods, in particular pharmaceutical preparations, slipped as well. The U.S. deficit with China decreased to $26.1 billion in October, data showed.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- 2022 Person of the Year Volodymyr Zelensky - Time
- Gen. Mark Milley Sees Time for Potential Ukraine Peace Talks Drawing Closer - WSJ
- Putin: Nuclear Risk is Rising, But We Are Not Mad - BBC
- Russian Shelling Kills at Least Six in East Ukraine - Reuters
- Putin Acknowledges Fighting in Ukraine ‘Might Be a Long Process’: Live Updates - NYT
- Russian Oil-Price Cap Adds to Fiscal Pressure on Moscow - WSJ
- Flurry of Military Activity in Belarus Stirs Concern in Ukraine -Reuters
- U.S. Lawmakers Authorize $800 Million More for Ukraine in Defense Bill – US News
- Go Slow on Crimea Why Ukraine Should Not Rush to Retake the Peninsula – Foreign Affairs
- Ukraine’s Somme - Russia is Hurling Troops at the Tiny Ukrainian Town of Bakhmut – The Economist
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
CEOs Say Demand Is Strong for Now, but Caution Abounds
Business executives from a range of industries say that demand in the U.S. economy remains resilient, for now, but is showing signs of slowing. Goldman Sachs Group Inc. Chief Executive David Solomon told The Wall Street Journal’s CEO Council Summit that “we still have a pretty strong economy,” particularly in the services sector. Still, he gave a 35% chance of a “soft landing,” where the Federal Reserve manages to curb inflation without pushing the U.S. into recession, and said there is also “a very, very reasonable possibility that we could have a recession of some kind.”
Companies are taking a conservative stance on spending and investment, given risks such as rapid monetary-policy tightening by the Fed, business leaders said at the summit. “Things are feeling resilient, it’s a slowdown in slow motion,” said Sander van 't Noordende, CEO of human-resources-services company Randstad NV. “There’s been inflation, the war in Ukraine, but also mitigations—people have money in the bank, people have jobs.”
Labor Productivity Declines 1.3 Percent Year on Year
U.S. worker productivity rebounded at a bit faster pace than initially thought in the third quarter, though the trend remained weak, keeping labor costs elevated. Economists said the report from the Labor Department on Wednesday pointed to inflation staying high and the Federal Reserve continuing to raise interest rates for some time. Nonfarm productivity, which measures hourly output per worker, rose at a 0.8% annualized rate last quarter. Productivity fell at a 1.3% rate from a year ago. It has now declined for three straight quarters on an annual basis.
Unit labor costs - the price of labor per single unit of output - rose at a 5.3% rate from a year ago instead of the previously reported 6.1% pace. Hourly compensation increased at a 3.2% pace, revised down from the 3.8% rate reported last month. Compensation rose at 2.3% pace in the second quarter. It increased at a 4.0% rate compared to the third quarter of 2021, rather than at a 4.7% as previously reported.
U.S. COVID – Flu, RSV, COVID-19: 'Perfect Storm' of Sickness Threatens Holiday Season
Dr. Rochelle Walensky, head of the Centers for Disease Control and Prevention, said Monday that the country has seen higher levels of both the flu and RSV, or respiratory syncytial virus, than is typical for this time of year. Speaking with reporters, Walensky said 47 jurisdictions throughout the U.S. have reported “high” or “very high” levels of flu-like illness, compared with 36 jurisdictions reporting such levels the previous week.
So far this season, the flu has caused at least 8.7 million illnesses, 78,000 hospitalizations and 4,500 deaths, according to CDC estimates, with 14 deaths occurring among children. Coinciding with the uptick in flu-like activity this season has been the higher burden of RSV. The CDC reported a cumulative RSV-associated hospitalization rate of 25 per 100,000 for the week ending Nov. 26. The U.S. also has seen an uptick in COVID-19 activity of late. CDC data shows the average number of related hospitalizations over seven days increased by 17%, from 3,768 admissions reported from Nov. 20 through Nov. 26 to 4,425 from Nov. 27 through Dec. 3
US Risks Falling Behind Foreign Competitors on Next Generation Vaccines
As the United States heads into its third pandemic winter, White House COVID Coordinator Ashish Jha says regarding tools: “the medicine cabinet has actually shrunk.” While the rapid development of mRNA vaccines in 2020 and rollout in 2021 put the United States firmly on the map as the global leader in COVID-19 pharmaceutical innovation and global vaccine provision, this has not kept pace with continued vaccine innovation.
Today, as the virus mutates to evade the protection once almost assured by hallmark mRNA vaccines and treatments, the race to develop next generation vaccines—and the downstream impacts of that technology—is quietly underway. Technologies such as mucosal entry, inhaled vaccines, or variant-proof pan-coronavirus vaccines hold promise for blocking transmission and getting ahead of continuously mutating variants. But despite decades of basic research funding, the U.S. risks falling behind foreign competitors in bringing these new technologies to market.
Three Takeaways From Georgia U.S. Senate Runoff
U.S. Senator Raphael Warnock beat Republican challenger Herschel Walker in a Georgia runoff election that fortified Democrats' Senate majority and handed the Republican Party another bitter loss to cap a disappointing midterm election season.
Here are some takeaways from Warnock's victory including the effect of Trump’s endorsement and the fact that candidates matter.
Lighting Design and Manufacturer RBW Opens Global HQ in Ulster County
Council of Industry Member RBW, a lighting design and manufacturing company has opened its new global headquarters in the Town of Ulster in a 100,000 square foot facility. Lt. Governor Antonio Delgado said the company “has a forward-thinking vision that incorporates sustainability, cutting edge research and development, as well as innovation into their facility and products.”
The state’s Empire State Development has awarded Excelsior Job Tax Credits in exchange has awarded RBW up to $547,500 in Excelsior Job Tax Credits in exchange for the retention of 35 jobs and creation of 49 new, local jobs.
World Cup Quarterfinals: Qualifying Teams, and Schedule
All eight teams have now booked their places in the World Cup quarterfinals. Five-time winners Brazil, defending champions France, Lionel Messi's Argentina and England are all still in the mix as the tournament in Qatar paused for a first rest day.
Brazil, who face beaten 2018 finalists Croatia in the first of the quarter-finals on Friday, remain favourites to lift a sixth World Cup in Qatar after their 4-1 mauling of South Korea. Argentina, who have hit their stride since their shock defeat against Saudi Arabia, will come up against an in-form Netherlands team, who remain unbeaten. On Saturday, Morocco take on Portugal before focus shifts to the late kick-off between England and France.
Rail Workers Warn of Exodus after Congress Pushes Deal
Railroad workers could leave the industry after Congress forced through a contract that does not provide them any paid sick days, an exodus that would ripple through an economy reliant on freight railroads to transport goods. The exit of thousands of train conductors and engineers would be felt by major corporations and U.S. consumers alike. It could slow the delivery of food, fuel and online orders while strangling already-shaky supply chains.
Those who were holding out hope for a strong contract might look for a new job after the deal failed to provide paid sick leave or put an end to strict attendance policies and strenuous schedules that require workers to be on call constantly, rail workers say. events.
How Amazon is Advancing Robotics on a Massive Scale
For decades, one of the hardest problems for robot developers to crack has been something seemingly mundane: how to replicate the human hand’s ability to pick up stuff. Amazon.com has just come a lot closer to achieving this elusive goal, with a leap in its automation prowess that promises far-reaching effects for its huge workforce and its future growth ambitions.
The tech giant last month unveiled a collection of new robots, one of which is suited to replacing humans in the most common job at Amazon – picking up items and placing them elsewhere. The linchpin of this new kind of automation is a robot arm – appropriately named Sparrow after the tenacious, pervasive bird – that combines advanced artificial intelligence, a variety of grippers, and the speed and precision that is now standard in off-the-shelf industrial robotic arms.
EVs May Challenge the Nation’s Electric Grid, But May Also Help
Clearly, EVs are and will increase pressure on the grid. But there’s also an intriguing aspect of EV charging that could actually alleviate the pressure EVs may put on the grid: they could easily act as one giant national battery storage system for the grid. “vehicle-to-grid” — V2G for short — technology, enables an EV to send power back through the charger to not just power your home, but potentially power anything else on the grid. In fact, the 2022 IRA includes tax credits for bidirectional (V2G) charging equipment.
Yes, there will be capacity challenges going forward, there already have been. During a California heatwave this summer, the state asked EV owners not to charge their vehicles during peak usage hours. The Edison Electric Institute predicts 26.4 million EVs will be on the road by 2030 — 10 times the number on the road today.
Oil Edges Up From Lows on Chinese Demand Hopes, Tanker Delays
Oil edged up on Wednesday after Brent crude earlier fell close to its lowest in 2022, as hopes of higher Chinese demand and concern about Russian supply arising from tanker delays in Turkish waters offset recession fears. China announced on Wednesday the most sweeping changes to its anti-COVID regime since the pandemic began, while RIA cited Russia's deputy foreign minister as saying Russia was concerned about a build-up of oil tankers in the Bosphorus Strait.
Brent crude was up 20 cents, or 0.3%, at $79.55 a barrel by 1300 GMT. It touched $77.74 earlier, the lowest since Jan. 3. U.S. crude added 22 cents, or 0.3%, to $74.47 and earlier touched $72.75, the lowest since late December.
Apple: Morgan Stanley Cuts iPhone Estimates Again, Expects Revenue Miss
Morgan Stanley analysts cut estimates for FQ1 iPhone shipments by 3 million to 75.5M, which brings the quarterly projection for revenue down by 3% to $120.3B. The new forecast for iPhone shipments implies an 11% drop year-over-year.
They don't expect Apple will be able to recover lost units in its March quarter, hence leaving the FQ2 forecast for iPhone shipments unchanged. Morgan Stanley analysts made the second cut to iPhone and revenue estimates for this quarter to account for a slower China production ramp. The broker previously slashed its forecast by 1.5M iPhone 14 Pro units and 1.5M iPhone 14 Pro Max units, as far as Apple's first fiscal quarter is concerned.
Boeing’s Last 747 Has Rolled Out of the Factory After a More Than 50-Year Production Run
Boeing’s final 747 rolled out of the company’s cavernous factory north of Seattle Tuesday night as airlines’ push for more fuel-efficient planes ends the more than half-century production run of the jumbo jet. The 1,574th — and last — 747 will later be flown by a Boeing test pilot, painted and handed over to cargo and charter carrier Atlas Air Worldwide Holdings early next year.
The hump-backed 747 is one of the most recognizable jetliners and helped make international travel more accessible in the years after its first commercial flight in January 1970. Its four powerful engines were efficient for their time. The planes could carry hundreds of passengers at a time for long-haul flights. The enormous jets also made it easier to fly air cargo around the world, helping companies cater to more demanding consumer tastes for everything from electronics to cheese.
MTA’s On-Street Bus Chargers Need More Flood Protection, Study Warns
The MTA’s surface fleet of nearly 6,000 buses is supposed to get a jolt of life with 60 more electric buses set to hit the streets sometime next year, but experts say the juice docks for the vehicles could be a liability. While this adds four times the number of buses to the 15 electric buses currently in use, a new study suggests the on-street chargers that power these buses need more flood protections.
The study, published recently in the peer-reviewed scientific journal “Transportation Research Part D: Transport and Environment,” seeks to determine just how protected or unprotected the city’s current bus chargers would be during storms and floods of the kind that NYC has experienced this century. In every scenario tested, one or both of the routes’ on-street chargers were compromised by flooding or power outages, contradicting the MTA’s belief that an East Side on-street charger in the study is not currently vulnerable to flooding.
Escape From New York? City Tax Data Shows 2020 Drop in High Earners
New York City’s economy survived the pandemic shutdown in 2020 because an unprecedented increase in jobless benefits buoyed households. The city avoided a fiscal crisis because a surge in capital gains for the richest taxpayers bolstered income tax collections.
But the income and tax liability data released by the city Independent Budget Office (IBO) Tuesday also revealed some darker news: the number of New Yorkers making between $150,000 and $750,000 declined by almost 6% between 2019 and 2020 — and the number of those making more than $750,000 dropped by almost 10%. The loss of high-income taxpayers coincided with the worst of COVID. Whether it also indicates a flight from New York by high-income individuals moving to escape New York’s highest-in-the-nation tax rate remains a source of great controversy.