Member Briefing February 27, 2023

Posted By: Harold King Daily Briefing,

Personal Consumption Expenditures (PCE) Price Index Rose to 5.4% in January

Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, rose to 5.4% on a yearly basis in January from 5.3% in December, the US Bureau of Economic Analysis reported on Friday. This reading came in higher than the market expectation of 4.9%. The core PCE-price index, which excludes food and energy prices, rose 4.7% in January from a year earlier, also ticking up from December.  The PCE-price index rose 0.6% in January compared with December. Core prices also rose 0.6% in January from the prior month, compared with December’s 0.4% increase. Many economists see the core measure as a better predictor of future inflation.

Spending by U.S. households rose a seasonally adjusted 1.8% in January from the prior month, the Commerce Department said Friday, compared with a revised 0.1% decrease in December. The spending figure adds to recent evidence that the U.S. economy remains vibrant.

Read more at FX Street

War in Ukraine Headlines


Lab Leak Most Likely Origin of Covid-19 Pandemic, Energy Department Now Says-

The Energy Department now joins the Federal Bureau of Investigation in saying the virus likely spread via a mishap at a Chinese laboratory. Four other agencies, along with a national intelligence panel, still judge that it was likely the result of a natural transmission, and two are undecided. The Energy Department’s conclusion is the result of new intelligence and is significant because the agency has considerable scientific expertise and oversees a network of U.S. national laboratories, some of which conduct advanced biological research.

Despite the agencies’ differing analyses, the update reaffirmed an existing consensus between them that Covid-19 wasn’t the result of a Chinese biological-weapons program, the people who have read the classified report said.

Read more at the WSJ

US GDP Up 2.7% in Fourth Quarter, Less Than Earlier Reported

The U.S. economy grew slightly less than reported in the final three months last year, the Commerce Department said Thursday, citing a downward revision to consumer spending. GDP growth in the October to December period was 2.7%, annualized, lower than the 2.9% increase originally reported. GDP growth for 2022 remains unchanged at 2.1%.

"The updated estimates primarily reflected a downward revision to consumer spending that was partly offset by an upward revision to nonresidential fixed investment," said the Commerce Department in a statement. In the fourth quarter last year, economic growth reflected increases in areas like private inventory investment, led by manufacturing, as well as consumer spending, said the Commerce Department.

Read more at IndustryWeek

US COVID – Cases, Hospitalization and Deaths all Lower

The US CDC is reporting:

  • 103 million cumulative cases
  • 1 million deaths
  • 259,339 cases week of February 15 (down from previous week)
  • 2,838 deaths week of February 15 (down from previous week)
  • 7% weekly decrease in new hospital admissions
  • 7% weekly decrease in current hospitalizations

The Omicron sublineages XBB.1.5 (80%), BQ.1.1 (12%), and BQ.1 (4%) currently account for a majority of all new sequenced specimens, with various other Omicron subvariants accounting for the remainder of cases.

Read more at the Johns Hopkins Center for Health Security


The Governor updated COVID data through February 24.


  • Daily: 10
  • Total Reported to CDC: 78,557


  • Patients Currently in Hospital statewide: 1,945
  • Patients Currently in ICU Statewide: 217

7 Day Average Positivity Rate - Cases per 100K population

  • Statewide 3.91%    -   8.89 positive cases per 100,00 population
  • Mid-Hudson: 2.62%   -   9.00 positive cases per 100,00 population

Useful Websites:

Village Apothecary Encouraging People to Stock Up on At Home COVID Tests  

With the COVID-19 emergency set to end May 11th at home COVID tests will no longer be provided free of charge.  Village Apothecary in Woodstock is helping people secure an allotment of COVID tests before the benefit runs out.  Since most insurances allow for 8 tests every 30 days, Village Apothecary will help your employees process requests so they can stock up.  They will give your firm a unique HIPAA compliant form via a link, and the verbiage for staff email. Employees follow the link and request the tests.  Orders can be picked up or shipped directly to employees homes.

Village Apothecary owner Dr. Neal Smoller has been at the forefront of the COVID fight and was instrumental in helping the community and Council members with testing, vaccinations. We are greatly appreciative of his leadership. Email “Dr. Neal” to learn more and

Email Dr. Neal Smoller

Euro-Zone Core Inflation at Record Set to Embolden ECB Hawks

Consumer price inflation in the 20 nations sharing the euro eased to 8.6% in January from 9.2% a month earlier, coming in just above the 8.5% estimated earlier this month, when figures from Germany, the bloc's biggest economy, were not yet included. The data are still likely to make for grim reading at the European Central Bank (ECB) as revisions show core inflation, or price growth excluding volatile food and fuel products, accelerating to 5.3% from 5.2%, confounding initial data for a steady pace.

Services inflation, the biggest chunk of core inflation, was revised up to 4.4% from 4.2%, likely worrying some because services primarily reflect wage growth and employee earnings are now rising at their fastest pace in years, even if real or inflation-adjusted growth is still negative. Energy price inflation was revised to 18.9% in January from an initial 17.2%, but that is still down from 25.5% in December.

Read more at Reuters

Tuesday’s Supreme Court’s Student-Loan Case Will Test Limits of Presidential Power

Presidents have tested the bounds of their executive authority for decades, leveraging the power of the White House to put in place sweeping economic and social changes. In recent years, both Republican and Democratic presidents have relied more heavily on the authority to circumvent congressional gridlock. George W. Bush used executive actions to expand government surveillance, and Barack Obama and Donald Trump issued directives meant to reshape the country’s immigration system.

Two cases before the court give the justices an opportunity to set strict limits over the president’s ability to implement policies without explicit authorization from Congress. The high court’s decision on the student-loan plan could mark the biggest curbing of those powers to date. The majority of the 43 million people in the U.S. who hold a total of $1.6 trillion in federal student-loan debt would see some type of debt forgiveness under the proposed plan, with relief of up to $20,000 per borrower. A ruling is expected in June.

Read more at The WSJ

U.S. Labor Market Resilient as Jobless Claims Fall

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to a persistently tight labor market, and further fueling fears that the Federal Reserve could raise interest rates higher than anticipated. Initial claims for state unemployment benefits decreased 3,000 to a seasonally adjusted 192,000 for the week ended Feb. 18, the Labor Department said.

The so-called continuing claims, a proxy for hiring, dropped 37,000 to 1.654 million during the week ending Feb. 11, the claims report also showed. Though continuing claims remain elevated, they are below levels seen before the pandemic.

Read more at Yahoo

What Continuing Unemployment Claims Say About the State of the Labor Market

According to weekly jobless claims data released Thursday, the number of Americans filing for unemployment benefits — or “initial claims” — fell by about 3,000 from the previous week. Continuing claims for unemployment insurance are down as well, with nearly 37,000 fewer than the previous week. Despite the fact that continuing claims numbers don’t capture everyone who’s out of work,  the current numbers are saying it’s not that long.

“Everything that we’re seeing is indicating that we have a really tight labor market or we would have seen claims stay persistent much longer,” said Gary Hoover, professor of economics at Tulane University. “And we would have seen increases in initial jobless claims. Neither one of those are taking place.”

Read more at Marketplace

Warren Buffett, in Annual Letter, Stays Upbeat and Preaches Patience

Billionaire investor Warren Buffett on Saturday signaled he has lost none of his enduring confidence in the U.S. economy and his company Berkshire Hathaway Inc. In his annual letter to Berkshire shareholders, the 92-year-old Buffett urged investors to focus on the big picture over the long term, rather than higher inflation and other factors that in 2022 dampened stock prices, though not Berkshire's.

He also urged Americans not to be convulsed by "self-criticism and self-doubt," saying the country's dynamism has benefited Berkshire in his 58 years running the company from Omaha, Nebraska, and will do so after he passes the reins. "I have yet to see a time when it made sense to make a long-term bet against America. And I doubt very much that any reader of this letter will have a different experience in the future."

Read more Reuters

U.S. Labor Board Limits Gag Clauses in Severance Agreements

he National Labor Relations Board has ruled that laid-off workers cannot be required to sign agreements that contain confidentiality clauses and other provisions that could deter them from exercising their rights under federal labor law in exchange for receiving severance. The board in a 3-1 decision on Tuesday overturned a pair of Trump-era rulings that said severance agreements only violate federal labor law when employers engage in other unlawful conduct when asking workers to sign them.

The board said it was illegal for the company to offer the workers severance agreements that included confidentiality and non-disparagement provisions because they could be discouraged from filing complaints with the NLRB or publicizing labor disputes.

Read more at Reuters

Global Steel Production Up to Start 2023

Global steel production rose 3.2% from December to January, up to 145.3 million metric tons in the latest summary issued by the World Steel Assn.  The January tonnage also represents a -3.3% decrease in output from the January 2022 result.

Among the top steelmaking nations, China’s 78.5 million metric tons produced in January represent a 2.0% rise over December’s result and a 2.3% increase over the January 2022 total. Steelmakers in the U.S. produced 6.5 million metric tons (7.2 million short tons) during January, the same total they produced for December.

Read more at American Machinist

Boeing Halts Dreamliner Deliveries on Fuselage Part Review

Boeing Co. has paused deliveries of its 787 Dreamliner over a documentation issue with a fuselage component, the latest setback for the planemaker’s marquee widebody program. The problem stems from an analysis error by a supplier related to the 787’s forward pressure bulkhead, the planemaker said Thursday in a statement. Boeing discovered the issue in certification paperwork provided to the US Federal Aviation Administration and notified the regulator.

Dreamliner production is continuing as Boeing works to resolve the issue, which the company said doesn’t pose an “immediate safety of flight concern for the in-service fleet.” Boeing expects no change to its 2023 production and delivery targets for the plane, though deliveries will be affected in the near-term, it said. The company hasn’t delivered a 787 since Jan. 26, according to data from Ascend by Cirium.

Read more at Yahoo

VW Group Formulating Scout, Audi EV Assembly Plans in U.S

Volkswagen-owned Audi (VOWG_p.DE) may build a factory in the United States in light of the Inflation Reduction Act, it said on Friday, the latest company to consider investments in the region to take advantage of the subsidies it offers. The premium carmaker, which sold around 190,000 cars in the U.S. last year, accounting for 11% of its total sales, does not yet have a plant in the country, and is at present not eligible for tax incentives and subsidies offered under the Inflation Reduction Act (IRA) for vehicles sourced and made in North America.

Carmakers have in recent years moved to reduce exports and imports across major markets such as the United States, China and Europe and instead localise production and supply chains to lower transport and logistics costs.  Industry publication Automobilwoche reported on Friday that Volkswagen planned to build its own plant in the U.S. for the Scout brand, which will make electric pick-ups and SUV trucks.

Read more at Reuters

China Solar Companies Qualify For Benefits Under Inflation Reduction Act

Concern over U.S. government support of China companies is growing. But for now, the over/under on Chinese green energy companies losing IRA support favors China. That’s because China has made itself as indispensable as OPEC in the green energy business. The “trade war” that started under Trump continues under Biden and is harder on the Chinese in some ways. This is especially true for Chinese tech companies that rely on U.S. hardware. Biden also passed the Uyghur Forced Labor Prevention law last year, which has made it difficult to export anything that had materials sourced from the western province of Xinjiang, where thousands of Uyghurs face arbitrary detention, according to the United Nations.

Despite all this, Chinese companies in the green energy space are allowed federal tax incentives and other benefits to the tune of millions of dollars thanks to the Inflation Reduction Act passed by Congress and signed into law by President Biden last year. If you’re making solar panels or EV car batteries, the government will help you. That includes China’s companies.

Read more at Forbes