Member Briefing February 21, 2023
NY Fed Survey: Job Openings Taking Longer to Fill; Minimum Wage Hike Affecting Manufacturers
Supplemental questions in the February 2019 Empire State Manufacturing Survey and Business Leaders Survey focused on staffing and compensation issues, including effects of the recent minimum wage hike in New York. Here are some Key Findings:
- The median number of new hires over the past 12 months as a percentage of firms’ total employees was 7.9 percent among manufacturers.
- It took manufactures on average 30 days to fill job openings over the preceding twelve months (mostly 2018), unchanged from last years’ survey.
- The median figure for job at the time of the survey openings as a share of the workforce was 2.7 percent among manufacturers
Regarding increases to New York’s minimum wage, 36 percent of manufacturers indicated no effect on wages—about the same proportion as in early 2018—while 22 percent noted a significant effect (up from 17 percent). Among manufacturers only 4% of employees earned minimum wage. 18 percent among manufacturer said thier workforce saw a larger wage raise than they otherwise would have, as a result of the latest minimum wage hike.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Biden, in Kyiv Ahead of War Anniversary, Vows Support as Long as Needed - Reuters
- US: Russia Has Committed Crimes Against Humanity in Ukraine - AP
- Sustaining Unity as Ukraine War Enters Second Year CNBC
- Sean Penn's 'Superpower': The 'Idiot's Guide' to Ukraine
- Uniper Takes €4bn Hit After Losing Control of Russian Subsidiary - FT
- Meet the Russian shadow delegation in Munich - Politico
- Exclusive: U.S. Sanctions Authority Probes Raiffeisen on Russia - Reuters
- F-16s, Longer-Range Missiles Could Help Ukraine Beat Russia, U.S. General Privately Tells Lawmakers - Politico
- Russia’s Death Toll From Ukraine War Is as High as 60,000, U.K. Says - WSJ
- Deeper Dive: What Ukraine Means for the World – The Economist
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
CBO: U.S. Debt Growing Dramatically Worse as Lawmakers Quibble Over Borrowing Cap
Feuding politicians in Washington got grim news Wednesday from Congress' nonpartisan budget analysts: The national debt is bad. It's getting worse fast, and it will cause an economic disaster if lawmakers don't act soon. Not only will the $31.4 trillion debt go up dramatically – by nearly $19 trillion over the next decade – if things continue on their current course, but if Congress doesn't increase the debt ceiling, the government will be unable to pay its bills sometime between July and September of this year, the Congressional Budget Office said in a report.
According to the CBO Revenues last year hit 19.6% of GDP, far above the 17.4% average over the last 50 years, and a share of the economy reached only in 1944, 1945 and 2000. ON the spending side CBO says outlays reached 24.8% of GDP last year, far above the 21% 50-year average. Under current law, that spending burden will continue with some modest annual changes more or less through 2033.
January PPI Report Shows Producer Prices Rose, Pointing to Persistent Inflation
U.S. supplier prices rose 6% in January from a year earlier, a sign of still stubborn inflation pressures in the economy. That increase in the producer-price index, which generally reflects supply conditions in the economy, was slower than December’s 6.5% gain, the Labor Department said Thursday. And it was down markedly from the 11.7% rise in March 2022, the recent peak.
The PPI increased 0.7% in January from the prior month, compared with a revised 0.2% drop in December, and significantly faster than the 0.2% average monthly rise in the year before the pandemic.
US COVID Update - White House Mulls Post-Covid Emergency Backstop for Uninsured
The Biden administration is zeroing in on a plan to keep Covid vaccines, treatments and tests free for the uninsured into 2024, even as it plots a quicker wind-down of its broader pandemic response. The initiative represents a bid to allay fears that the most vulnerable Americans could be left without access to Covid care once the government exhausts its ability to purchase vaccines and treatments and shifts responsibility for distributing them to the private market.
The administration doesn’t plan to shift responsibility for vaccines and treatments to the private market until late summer at the earliest, giving it time beyond the May expiration of the public health emergency to navigate the handover. Even then, most people would still be able to get shots and treatments through private health insurers or federal programs like Medicare and Medicaid that would be newly responsible for negotiating their own supply deals with Covid drugmakers. A separate pre-existing federal program would continue providing free vaccinations for uninsured children.
NYS COVID Update
The Governor updated COVID data through February 3.
- Daily: 19
- Total Reported to CDC: 78,401
- Patients Currently in Hospital statewide: 2,144
- Patients Currently in ICU Statewide: 232
7 Day Average Positivity Rate - Cases per 100K population
- Statewide 4.28% - 10.61 positive cases per 100,00 population
- Mid-Hudson: 3.39% - 10.88 positive cases per 100,00 population
WHO Chief to 'Push Until We Get the Answer' on Covid Origins – Disputes Reports to the Contrary
The World Health Organization is denying a report made by a top scientific journal that it had “quietly shelved” an investigation into the origins of the coronavirus. But that denial itself only highlighted the challenges to such an investigation, especially given China’s continued reluctance to allow access to sites that could hold clues to how the pandemic began. Answers have been difficult to come by in large part because Chinese authorities have steadfastly resisted giving Western researchers the access they have been requesting since early 2020.
In her comments to Nature, Van Kerkhove acknowledged a “deep frustration” about how difficult it had been to reestablish trust with Chinese counterparts, who have grown skeptical of outside investigators over the course of the three-year battle against COVID-19. WHO spokesman Jašarević told Yahoo News this week that while there would indeed not be a “phase two” of the original coronavirus investigation, a WHO panel called the Scientific Advisory Group for the Origins on Novel Pathogens (SAGO), would continue looking for answers on how the pandemic had begun.
Study: COVID Increases Risk for Cardiac Complications—Immediately and Into the Future
Even a mild case of COVID can lead to an increased risk of cardiac issues like heart failure and stroke for at least a year, according to a March study by Veterans Affairs Department researchers. In a bid to determine why and how COVID can affect the heart, Dr. Andrew Marks, a cardiologist and biophysics professor at Columbia University, and Steven Reiken, a research scientist in his lab, studied heart tissue from people who died of COVID, in addition to the hearts of mice that had been infected with COVID.
Among their findings, which they’ll present Monday at the 67th Annual Biophysical Society Meeting in San Diego: Heart tissue from humans shows increased levels of oxidative stress and inflammation, and changes in calcium levels due to damage to the system that regulates them in the heart. Such alterations can lead to arrhythmia or heart failure, according to the researchers. Chest pain and tachycardia, or an unusually fast heart beat, are common long-term amongst COVID survivors.
JP Morgan Chase Global PMI: Contraction in Global Manufacturing Output Shows Signs of Easing
The J.P. Morgan Global Manufacturing PMI inched up from 48.7 in December to 49.1 in January, contracting for the fifth straight month but declining at a somewhat slower pace at the start of the year. Data improved across the board in January’s survey. Only nine out of the 31 nations for which January data were available signaled expansions in output. The few pockets of growth were largely confined to Asia, with India, Indonesia, Russia, the Philippines, Thailand and Myanmar all registering increases.
Elsewhere there were also signs of the downturn easing. Although the largest industrial regions of China, the US, the euro area and Japan all saw output contract, rates of decrease eased in all four cases. A similar picture of moderating contraction was also seen in the UK, Brazil and Turkey. Manufacturers' business confidence continued to revive at the start of 2023, with optimism hitting a ten-month high (albeit still below its long-run average).
Workers’ Pay Globally Hasn’t Kept Up With Inflation
Wage growth across advanced economies is plateauing or declining from high levels. For central banks, it is good news: There are no signs of a spiral in which wages push up prices, which push up wages again. For workers, though, it is less positive. Wages rose faster last year than in the previous two years, but not as much as prices across major advanced economies, according to projections by the International Labour Organization.
Workers’ purchasing power—their average inflation-adjusted wage—was lower last year than in 2019, before the pandemic, according to the report. In the U.S., nominal wage growth—meaning unadjusted for inflation—has slowed sharply since the middle of last year, according to a variety of measures. Average hourly earnings for private-sector nonfarm workers rose 4.4% in the 12 months through January, down from 5.6% last March and less than the 6.4% rise in consumer prices in the year through January. In Europe, average wage growth across six countries declined to 4.9% in December from 5.2% in November.
Amid a Chemical Stench, EPA Chief Asks Worried Residents at Ohio Train Derailment Site to ‘Trust the Government’
The head of the U.S. Environmental Protection Agency got a first-hand look Thursday at the toll left by a freight train derailment in Ohio, where toxic chemicals spilled or were burned off, leaving the stench of fresh paint nearly two weeks later. EPA Administrator Michael Regan, who walked along a creek that still reeks of chemicals, sought to reassure skeptical residents that the water is fit for drinking and the air safe to breathe around East Palestine, where just under 5,000 people live near the Pennsylvania state line.
“I’m asking they trust the government. I know that’s hard. We know there’s a lack of trust,” Regan said. “We’re testing for everything that was on that train.” Since the derailment, residents have complained about headaches and irritated eyes and finding their cars and lawns covered in soot. The hazardous chemicals that spilled from the train killed thousands of fish, and residents have talked about finding dying or sick pets and wildlife. Regan said Thursday that anyone who is fearful of being in their home should seek testing from the government.
Supply Chain Vulnerabilities Point up Advantages of Reshoring
More than 40 years after the U.S. manufacturing sector peaked at 19 million-plus jobs, made-in-America advocates see a reversal in the forces that once shipped production out of the country. Now, they say, it’s becoming clearer that reshoring would bring greater predictability, while producing benefits in terms of cost and environmental impact. The Reshoring Initiative lately has been tracking victories, with ballpark figures of the number of reshored jobs and jobs created by foreign investment in the U.S. increasing from 6,000 in the year of its founding to 260,000 in 2021.
In 2022, 350,000-plus jobs came back, Reshoring Initiative founder and President Harry Moser said. And, in testimony he delivered to a U.S. Senate committee in the summer, he predicted 400,000 for this year. While it’s sometimes difficult to distinguish jobs created by expansion from those created by reshoring, Moser has confidence that at least 90 percent of the jobs included in his figures are the result of reshoring or foreign direct investment (FDI) — when a company with a headquarters based outside the U.S. expands in the U.S.
Weekly Jobless Applications Fall Again Despite Fed Rate Push
Applications for jobless aid in the U.S. for the week ending Feb. 11 fell by 1,000 last week to 194,000, from 195,000 the previous week, the Labor Department reported Thursday. It’s the fifth straight week claims were under 200,000. The four-week moving average of claims, which smooths out some of the weekly ups and downs, rose by 500 to 189,500. It’s the fourth straight week that the four-week moving average has been below 200,000.
Earlier this month, the Fed raised its main lending rate by 25 basis points, its eighth rate hike in less than a year. The central bank’s benchmark rate is now in a range of 4.5% to 4.75%, its highest level in 15 years. Chair Jerome Powell appeared to suggest that he foresees two additional quarter-point rate hikes.
The Future Of Work: Are Traditional Degrees Still Worthwhile?
Jobs and the world of work are changing. This raises one very important question: As many roles become increasingly focused on specialized skills and on-the-job experience, are traditional degrees still valuable to employers? The ongoing skills crisis plays a big part in this. Technologies like artificial intelligence, machine learning, the internet of things, and blockchain have the potential to revolutionize every industry.
But putting them to work requires specialized skillsets that are difficult to find, and candidates who possess them are often targeted for recruitment by the biggest (and highest-paying) technology and financial services businesses. When businesses do find the right candidate with the right skill set, it's unlikely that they will decide to turn them away due to a lack of a college degree. In these instances, skills and experience are simply far more valuable to employers.
Local Sales Tax Collections Grew by Over 9% in January Compared to Last Year
Local sales tax collections in New York state increased by 9.2% in January compared to the same month in 2022, according to an analysis released today by State Comptroller Thomas P. DiNapoli. Overall, local collections totaled $1.89 billion, up $159 million compared to the same time last year. Every county experienced some year-over-year growth in January collections, with Delaware County seeing the largest increase at 26%, followed by Schenectady and Cayuga counties at 24.1% and 20.6%, respectively.
Monthly sales tax distributions made to counties and tax-imposing cities are based on estimates by the state Department of Taxation and Finance. In the third month of each calendar year quarter, these distributions are adjusted upward or downward, so that the quarter as a whole reflects reported sales by vendors. The next quarterly numbers (for January to March) will be available in April. DiNapoli’s most recent annual report covered the October-December quarter and calendar year 2022.
Con Edison, State Regulators Propose Rate Hike
Under a joint proposal between Con Edison and staffers of the state Public Service Commission, electric bills in most of New York City and Westchester would rise roughly 4.2% this year, 4% in 2024 and 3.8% in 2025
Con Ed says the hike is necessary for reliability, safety and to meet New York's clean energy goals. The public can comment on the proposal, which will be reviewed by the Public Service Commission.
At Job Fairs in China, Employers are Thrifty and Applicants Timid
China's job fairs are making a comeback after being forced online by COVID-19 for three years, but subdued wages and less abundant offerings in sectors exposed to weakening external demand point to an uneven and guarded economic recovery. Authorities announced hundreds of such events across the country this month, the latest sign that China is returning to its pre-COVID way of life and that youth unemployment, a major headache for Beijing, may ease from its near 20% peak.
job fairs are one of the most efficient ways for employers and workers to connect. Although attendees said their long-awaited return is encouraging, some were not brimming with confidence. A survey of about 50,000 white-collar workers published on Thursday by Zhaopin, one of China's biggest recruiting firms, showed 47.3% of respondents were worried they may lose their jobs this year, up from 39.8% a year ago. About 60% cited the "uncertain economic environment" as the main factor affecting their confidence, up from 48.4% in 2022.