Member Briefing February 26. 2024
S&P Global: Economy Grew Steadily in February, as U.S. Manufacturers Rebound
U.S. business activity cooled in February and there was encouraging news on inflation, with a measure of prices paid for inputs falling to the lowest level in nearly 3-1/2 years, which could allay fears that price pressures were picking up. S&P Global said on Thursday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, slipped to 51.4 this month from 52.0 in January. A reading above 50 indicates expansion in the private sector.
Manufacturing activity perked up, with the survey's flash manufacturing PMI rising to 51.5, the highest reading since September 2022, from 50.7 in the prior month. New orders rose as did employment, but the pace of increase in input prices continued to moderate. "Signs of inventory reduction policies becoming less widespread also helped boost production and sustain high levels of business confidence in the outlook for the year ahead among manufacturers." said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Existing Home Sales Jump in January
Sales of previously owned homes rose 3.1% in January to 4 million units on a seasonally adjusted annualized basis, according to the National Association of Realtors. Sales were down 1.7% year over year. The count is based on closings, so the contracts were likely signed in November and December, when mortgage interest rates backed off their October high of 8%. By mid-December, the rates had hit a recent low of around 6.6%. Today they are back over 7%, according to Mortgage News Daily.
Inventory of homes for sale in January increased to 1.01 million units, up 3.1% from January 2023, but still at a low 3-month supply. Six months is considered a balanced market between buyer and seller. That dynamic is why the market is still seeing pressure on home prices. The median existing home price for all housing types in January was $379,100, up 5.1% from a year earlier and an all-time high for the month of January. 32% of sales were all-cash, the highest level in nearly a decade — since June 2014. First-time buyers made up just 28% of sales. Historically they make up about 40%, but a lack of lower-priced homes for sale is hitting them hardest.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- The Humanitarian Catastrophe in Gaza Can Only Get Worse -The New Yorker
- US, British Forces Carry Out More Strikes Against Houthis in Yemen – Reuters
- Iran Says US and UK Strikes on Houthis ‘Escalate Tensions’ – The Guardian
- Israel, Hamas Skirmish in Gaza as Truce Efforts Pick up Pace – Reuters
- Qatar Reportedly to Host Hamas-Israel Truce Talks – Times of Israel
- Netanyahu Outlines Postwar Gaza Plan That Palestinians Say Means Occupation - WSJ
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- Navalny's 'Tortured' Body Handed Over to His Mother - BBC
- White House Hits Russia With Hundreds of New Sanctions Over Ukraine War, Navalny Death - CBS
- The Biggest Ever Sanctions Have Failed to Halt Russia’s War Machine - WSJ
- How Russia's Military Uses Volunteer Fighters to Plug Gaps in Ukraine – Reuters
- Zelensky Insists Country Will Win on Second Anniversary - BBC
- A Ukrainian Teen’s Dark Transformation Into Russian Propaganda Star - WSJ
- In Third Year of War, Why Ukraine's Fate Hinges on West – Reuters
- For Many Young Russians, Dreams of Democracy Died with Alexei Navalny - Washington Post
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Other Headlines
- Farmers Protest Across Europe – The Dispatch
- Qatar to Build New LNG Project as US Stalls on Export Push - Bloomberg
- Brazil Puts Reform of UN at Heart of its G20 Presidency – The Guardian
- Hungary Buys Swedish Fighter Jets, Prepares to Approve NATO Bid – Reuters
- Japan’s Stock Market Cheers First Record High in 34 Years - Bloomberg
- Blinken Rallies Support for Haiti Security Mission in Brazil - Reuters
- West African Bloc Lifts Sanctions on Junta-Led Niger – Reuters
- Is Europe Ready to Defend Itself? – The Economist
Policy and Politics
House Speaker Johnson Eyes Spending Package to Avert Shutdown, Warns GOP Not to Expect ‘Home Runs’
Speaker Mike Johnson (R-La.) is looking to prevent a partial government shutdown by moving a set of spending bills as a single package ahead of Friday’s deadline, according to a source familiar. Johnson held a private call with GOP lawmakers Friday night and told members his goal is to pass a package of the four bills due Friday, known as a “minibus,” but warned the number of bills included in the package is up in the air, according to the source. Congressional leaders could release the compromise bills as soon as Sunday.
Johnson warned the lawmakers, however, that they will likely be “disappointed” with the final bills if they are expecting “home runs and grand slams” in them, according to a partial transcript of the call. Funding for military construction and the departments of Agriculture, Energy and Water, Veterans Affairs, Transportation and Housing and Urban Development elapse on Friday. The remaining eight spending bills expire on March 8. Johnson told members Friday night that the number of bills included in the package will depend on how many measures are ready to hit the floor for a vote, according to the source familiar.
New York State Legislature Retirement Announcements Piling Up
Turnover in the New York State Legislature, where lawmakers run every two years, isn't unusual. However, Democratic political analyst Jack O'Donnell said what is unusual is the timing of the retirement announcements of many veteran lawmakers this year. "It's really early for people to say, ‘I'm bowing out’ and it's rare for them to do it before session is over,” he said. “They still have a job to do.”
Democratic Assembly members, Speaker Pro Tempore Jeff Aubry and Mental Health Committee Chair Aileen Gunther, will not run for reelection. Gunther represents parts of Orangeand Sullivan Counties. Nor will two Southern Tier Republicans run, Minority Leader Pro Tempore Andy Goodell and Joe Giglio, who is part of the conference's leadership team. Collectively they represent 85 years of Legislature experience. "I think it's the tenor of the politics and the hyper-partisanship just continues to escalate and it makes it really hard to get things done," O'Donnell said.
Read more at New York State of Politics
New York DEC Commissioner Basil Seggos to step down
New York state Department of Environmental Conservation Commissioner Basil Seggos has decided to step down from the role, Spectrum News 1 learned Wednesday evening. Seggos has led the DEC since October 2015, the longest tenure a commissioner has served in that department. Seggos said he will remain in Gov. Kathy Hochul’s administration into the spring to see the completion of negotiations in this year’s state budget, which is due April 1.
“For nearly a decade, Commissioner Seggos has led the Department of Conservation through a pivotal moment in our climate fight. His leadership has been instrumental in safeguarding our land and water, combatting climate change, protecting New Yorkers during extreme storms, and supporting the incredible outdoor recreation programs across the state," said Katy Zielinski, a spokeswoman for Gov. Hochul, in a statement. Hochul will appoint Seggos’ successor, who will then have to be confirmed by the state Senate.
Read more at New York State of Politics
Health and Wellness
Long Covid ‘Brain Fog’ May be Due to Leaky Blood-Brain Barrier, Trinity College Dublin Study Finds
From forgetfulness to difficulties concentrating, many people who have long Covid experience “brain fog”. Now researchers say the symptom could be down to the blood-brain barrier becoming leaky. The barrier controls which substances or materials enter and exit the brain. “It’s all about regulating a balance of material in blood compared to brain,” said Prof Matthew Campbell, co-author of the research at Trinity College Dublin. “If that is off balance then it can drive changes in neural function and if this happens in brain regions that allow for memory consolidation/storage then it can wreak havoc.”
Writing in the journal Nature Neuroscience, Campbell and colleagues report how they analyzed serum and plasma samples from 76 patients who were hospitalised with Covid in March or April 2020, as well 25 people before the pandemic. Among other findings, the team discovered that samples from the 14 Covid patients who self-reported brain fog contained higher levels of a protein called S100β than those from Covid patients without this symptom, or people who had not had Covid.
NYS COVID Update
The Governor updated COVID data for the week ending January 12th.
Deaths:
- Weekly: 74
- Total Reported to CDC: 82,770
Hospitalizations:
- Average Daily Patients in Hospital statewide: 1,313
- Patients in ICU Beds: 167
7 Day Average Cases per 100K population
- 7.9 positive cases per 100,00 population, Statewide
- 10.7 positive cases per 100,00 population, Mid-Hudson
Useful Websites:
Election 2024
- South Carolina Primary Results: Trump Wins, Defeating Haley in Her Home State - Yahoo
- Five Takeaways from the South Carolina GOP Primary – The Hill
- Becoming VP: The Elise Stefanik Playbook – City & State
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
Aerospace Giants Form Coalition to Stop Unauthorized Parts from Entering Supply Chain
Airbus, Boeing, and GE Aerospace, on last Thursday announced the formation of a coalition that would aim to prevent unauthorized parts from entering the global supply chain. The move comes after jet engine maker CFM International, co-owned by GE Aerospace and France's Safran, last year said thousands of engine components may have been sold with forged paperwork by British distributor AOG Technics.
The group, Aviation Supply Chain Integrity Coalition, was launched on Thursday and would include senior representatives from American Airlines, Delta Air Lines, Safran, StandardAero and United Airlines, according to a statement. Former National Transportation Safety Board Chairman Robert Sumwalt and former U.S. Transportation Deputy Secretary John Porcari will serve as coalition co-chairs, the statement added.
Survey: PTO Trends at U.S. Companies Are Changing
New data about U.S. workers provided by the International Foundation of Employee Benefit Plans shows that paid time off (PTO) trends in U.S. workplaces are changing. The Paid Leave in the Workplace 2024 Survey Report reveals what organizations are offering their employees for vacation, sick leave, parental leave and bereavement leave. The report also highlights the types of paid leave employees are seeking most adamantly.
Although federal law does not require employers to offer vacation time to their workers, nearly all (99%) organizations surveyed offer this benefit. For most organizations, the number of paid vacation days increases with service. Only 12% offer a flat number of vacation days regardless of service. While most companies offer paid leave, many employees are simply not taking the time off. Heavy workload (44%) and lack of adequate staffing (23%) are the two most common reasons workers do not use their paid vacation time. That being said, roughly three quarters of employers (74%) encourage employees to take paid vacation days.
GE Aerospace Converting Singapore MRO Center to ‘Smart’ Factory
GE Aerospace is planning an $11-million investment to convert its Singapore aircraft engine repair center into a ‘Smart factory’ that will “revolutionize engine repair and expand workforce skills to support the new technologies.” The Singapore operation is GE Aerospace’s largest for engine component maintenance, repair, and operations (MRO), performing for more than 60 percent of its global repair volumes. It employs more than 2,000 people at the three plants.
The Smart factory will expand and update the current additive manufacturing capabilities there for high pressure compressor (HPC) airfoils for GEnx engines, and later for LEAP engines produced by a GE, joint-venture CFM International. Ultimately, the new AM capabilities will be available for CFM56 and CF34 engines, too. The smart factory also will introduce automated inspection systems, and new material removal processes, such as net-shape airfoil robotic polishing, net-shape airfoil adaptive machining, and robotic airfoil leading-edge re-reprofiling. The operation will include a range of digital capabilities, including IOT functions, robotics, cloud storage, and data analytics for a highly connected, intelligent operation.
Read more at American Machinist
Half of College Grads Are Working Jobs That Don’t Use Their Degrees
Roughly half of college graduates end up in jobs where their degrees aren’t needed, and that underemployment has lasting implications for workers’ earnings and career paths. That is the key finding of a new study tracking the career paths of more than 10 million people who entered the job market over the past decade. It suggests that the number of graduates in jobs that don’t make use of their skills or credentials—52%—is greater than previously thought, and underscores the lasting importance of that first job after graduation.
Of the graduates in non-college-level jobs a year after leaving college, the vast majority remained underemployed a decade later, according to researchers at labor analytics firm Burning Glass Institute and nonprofit Strada Education Foundation, which analyzed the résumés of workers who graduated between 2012 and 2021. More than any other factor analyzed—including race, gender and choice of university—what a person studies determines their odds of getting on a college-level career track. Internships are also critical.
Ford Halts Shipments Of 2024 F-150 Lightning Due To Undisclosed Quality Issue
The first two months of 2024 indicate that it will be a very challenging year for many EV manufacturers and Ford is one of them. According to Automotive News, Ford halted shipments of the 2024 Ford F-150 Lightning model over an undisclosed quality issue. The stop-ship order went into effect on February 9 and there is no info on when it will be lifted.
The 2024 model year Lightning is not an exception, as a similar stop-ship order concerns the 2024 Ford F-150 with an internal combustion engine. In the case of the ICE version, the issue started in December 2023 and lasted for several weeks (shipments to dealers finally started several days ago). Because of that, "hundreds, if not thousands, of trucks have piled up," awaiting some additional quality checks.
US Should Block Cheap Chinese Auto Imports From Mexico, US Makers Say
The U.S. government should block the import of low-cost Chinese autos and parts from Mexico, a U.S. manufacturing advocacy group said on Friday, warning they could threaten the viability of American car companies. "The introduction of cheap Chinese autos - which are so inexpensive because they are backed with the power and funding of the Chinese government - to the American market could end up being an extinction-level event for the U.S. auto sector," the Alliance for American Manufacturing said in a report.
The group argues the United States should work to prevent automobiles and parts manufactured in Mexico by companies headquartered in China from benefiting from a North American free trade agreement. Vehicles and parts produced in Mexico can qualify for preferential treatment under the U.S.-Mexico-Canada trade agreement as well as qualifying for a $7,500 electric vehicle (EV) tax credit, the report noted. The Chinese embassy in Washington said in response that China's automobile exports "reflect the high-quality development and strong innovation of China’s manufacturing industry. The leapfrog development of China’s auto industry has provided cost-effective products with high quality to the world."
Hydro-Québec Has Enough Energy to Meet Domestic, Export Demand, CEO Insists
Hydro-Québec has enough energy to meet both domestic and out-of-province demand, even after low water levels led the utility to curb power exports last year as a precautionary measure, chief executive Michael Sabia insists. Canada’s biggest electricity producer on Wednesday reported that 2023 net income dropped 28 per cent to $3.29 billion. It also cut the dividend it pays to its sole shareholder, the Quebec government, by 26 per cent to $2.5 billion. Power from the company is a major part of New York's future energy plan according to the NYISO.
Smaller-than-average rainfall in northern Quebec, where several of the company’s dams and generating stations are located, left reservoirs with less water than in previous years. The decision to reduce exports cost Hydro-Québec about $550 million, Sabia said. “The issue essentially is that there wasn’t enough snow and rain in the places where we need it,” Sabia told reporters Wednesday. “We had lower water levels in our reservoirs, so we took the decision to reduce our exports to keep energy available for our clients in Quebec. Let’s be clear: Hydro-Québec has enough energy for demand in Quebec and its long-term commitments for neighbouring markets.”
Boeing Replaces 737 MAX Chief
Boeing announced last week that the head of its 737 MAX program is departing the aviation giant less than two months after a major safety incident temporarily grounded 171 planes. Ed Clark, an 18-year Boeing veteran is "leaving the program," Boeing Commercial Aviation (BCA) Chief Stan Deal said in a memo released by the company. Katie Ringgold has been named as his replacement.
It was the first American mission to land on the moon since Apollo 17 in 1972 and the first private spacecraft ever to make a soft landing there. While it was a private mission, NASA paid Intuitive Machines $118 million to deliver six instruments to the moon. And the U.S. space agency provided streaming video of the landing.
A U.S.-Built Spacecraft Lands on the Moon for the First Time Since 1972
Intuitive Machines’ cargo moon lander, “Odysseus,” became the first privately developed spacecraft to land on the lunar surface on Thursday – as well as the first U.S. spacecraft to soft land on the moon in over 50 years. The Houston, Texas company confirmed that the IM-1 mission lander was standing upright and sending data back to Earth. “Odysseus has found his new home,” Tim Crain, Intuitive Machines’ CTO and IM-1 mission director, said from the company’s mission control.
As it approached the surface of the moon, Odysseus lost contact with NASA, resulting in several anxious minutes for those who worked on the joint project. But after approximately 15 minutes of searching, officials confirmed that they were once again receiving signals from the spacecraft. The Intuitive Machines moon lander was launched from Kennedy Space Center in Cape Canaveral, Fla., last week on board a SpaceX Falcon 9 rocket.