Member Briefing February 3, 2022

More from the JOLTs Report – Manufacturing Job Opening, Quits Inch Higher

NMA Chief Economist Chad Moutray reports: There were 856,000 manufacturing job openings in December, inching up from 853,000 in November but down from a record 955,000 in October, More importantly, it was the ninth straight month with openings that have exceeded 800,000, averaging 883,000 over that time frame…. Overall, job postings remain well above pre-pandemic levels, as companies ramp up activity and need more workers to meet the additional capacity.

Total quits in the nonfarm business economy pulled back from a record 4,499,000 in November to 4,338,000 in December, which remained the third-highest reading in the survey’s history and speaks to the high degree of ‘churn’ in the labor market, exacerbating the workforce difficulties that companies are experiencing. For manufacturers, the number of quits rose from 294,000 in November to 308,000 in December, remaining highly elevated and not far from the all-time high of 324,000 recorded in September.

Job Openings Rise as Manufacturing Slows

More from the US ISM

Conditions in the manufacturing sector have slowly improved over the last three months, but many of the sector’s persistent issues remain. The culprits of 2022’s sluggish growth are the same as those blamed in 2021 so far: A lack of available talent and a badly tangled supply chain. But conditions are improving, according to Timothy Fiore, chair of the ISM’s manufacturing survey committee.

In a sign that labor shortage may be slowly improving, the ISM’s Employment index rose by about half a point to 54.5%, indicating slightly faster growth in January. And on the supplies side, the Supplier Deliveries index fell by about a third of a point, indicating that deliveries are still getting slower, but at a slower rate. Many goods and commodities remained up in price and in short supply in January, according to the ISM’s report, including aluminum and aluminum products, electrical and electronic components, semiconductors, and steel products.

PMI: Euro Zone Factory Growth Accelerated in Jan as Bottlenecks Eased

IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) rose to a five-month high of 58.7 in January from December’s 58.0, below an initial “flash” estimate of 59.0 but comfortably above the 50 mark separating growth from contraction. “The improvement is by no means evenly spread across the euro zone, however, with resurgent growth in Germany, the Netherlands and Austria contrasting with slowdowns in Italy, Spain and Greece and near-stalled production in France.” said Chris Williamson, chief business economist at IHS Markit.

Raw material prices continued to soar, albeit at a slower pace than in December, and factories passed more of that burden on to consumers. The output prices index climbed to 72.7 from 70.2 – the second-highest reading in almost two decades.

Record Euro Zone Inflation Piles Pressure on ECB

Inflation across the 19 countries that share the euro picked up to 5.1% in January from 5% in December, far outpacing expectations in a Reuters poll of analysts for a drop to 4.4%, data from Eurostat showed on Wednesday. Inflation is now more than twice the ECB’s 2% target.

The reading reflected soaring energy prices as expected but unprocessed food inflation also jumped more than 5%, a potential source of political pressure on the ECB as fuel and food prices impact ordinary voters quickly. The central bank, which will hold a policy meeting on Thursday, has for months shrugged off data showing prices climbing, arguing that temporary factors are behind the rise and inflation will abate soon on its own.

US COVID – At Home Tests Slow to Arrive – Results Often Mis-Interpreted

Only 2 weeks after launching COVIDtests.gov, a website for US residents to order SARS-CoV-2 tests through the US Postal Service, about 60 million households have requested the tests so far, according to White House officials. The orders leave enough tests for about 65 million more households—about 260 million tests of the US government’s initial order of 500 million. Reportedly, the government plans to order an additional 500 million tests to increase availability.

The US has been criticized for not having federal guidance on how to use testing as a COVID-19 mitigation strategy. But even when given FDA-authorized test instructions, a substantial proportion of test users misinterpret negative results of at-home self-tests by not taking into account the implications of a high-risk, pretest exposure and ignoring federal self-quarantine recommendations, according to a study published on January 31 in JAMA Internal Medicine. The researchers suggest that pilot-tested decision science-based instructions might help to increase test takers’ understanding of results and the tests’ usefulness to public health.

NYS Vaccine and COVID Update – Hospitalizations Continue to Drop

Vaccine Stats as of February 2:

One Vaccine Dose

87.6% of all New Yorkers – 16,206,765 (plus 10,345 from a day earlier).
In the Hudson Valley 1,684,216 (plus 1,082).

Fully Vaccinated

74.2% of all New Yorkers – 14,390,881 (plus 10,673).
In the Hudson Valley – 1,468,567 (plus 1,488).

Boosters Given

All New Yorkers – 5,923,921
In the Hudson Valley – 708,836

The Governor updated COVID data through February 1. There were 136 COVID related deaths for a total reported of 66,391.

Hospitalizations:

Patients Currently in Hospital statewide: 6,628.
Patients Currently in ICU Statewide: 1,094

7 Day Average Positivity Rate – Cases per 100K population

Statewide 5.96% – 53.79 positive cases per 100,00 population
Mid-Hudson: 5.79% – 47.69 positive cases per 100,00 population

Useful Websites:

Read the press release
Visit the NYS COVID-19 Data Hub

Hochul, NYS Department of Health Announce an Expert Consortium to Address Long COVID

Governor Kathy Hochul today announced New York State, led by the State’s Department of Health, will be hosting an expert panel on long COVID today, February 3 beginning at 8:45. The event will be hosted by State Health Commissioner, Dr. Mary T. Bassett, and consist of three panels featuring the research, clinical, and functional aspects of this critical public health challenge.

The forum will include specialists, clinicians, social scientists, advocates, and other stakeholders to share their experience, expertise, and insights. The discussion and findings will inform the State’s response to long COVID—including policy, regulatory, and program considerations—to support impacted New Yorkers as well as the healthcare providers who care for them.

Omicron Sub-Variant Could Be More Infectious, Found In 57 Countries: WHO

A subvariant of the highly contagious Omicron coronavirus strain, which some studies indicate could be even more infectious than the original version, has been detected in 57 countries. In its weekly epidemiological update, the World Health Organization said that the variant, which accounts for over 93 percent of all coronavirus specimens collected in the past month, counts several sub-lineages: BA.1, BA.1.1, BA.2 and BA.3.

The BA.1 and BA.1.1 — the first versions identified — still account for over 96 percent of all the Omicron sequences uploaded to the GISAID global science initiative, it said. But there has been a clear rise in cases involving BA.2, which counts several different mutations from the original — including on the spike protein that dots the virus’s surface and is key to entering human cells.

Play Airlines Launches Direct Flights to Iceland from Newburgh

A new international low-cost carrier will begin flying from Newburgh in the Hudson Valley, with direct service to Iceland and connecting to 22 European cities. The airline announced its June 9th startup date on Tuesday noting that from its hub in Reykjavik, passengers will be able to take connecting flights to several European cities including London, Paris and Barcelona, among several others. Introductory fares will start as low as $109 one way, said Port Authority director of airline attraction Alex Minton while at Stewart on Tuesday.

When Play Airlines begins its daily flights between New York Stewart International Airport and its hub in Iceland, the new Stewart International Arrivals Terminal will be put into use for the first time accepting oversea passengers.

What About Me? Work-From-Home Spurs Blue-Collar Americans to Seek Career Shifts

A new study by management consulting firm Oliver Wymans research arm found that the desire for more work flexibility was a key motivation for blue-collar employees to make the transition. It also said that almost four out of five who tried were successful. “Despite being front and center during the spread of Covid-19, the well-being of blue-collar workers took a back seat,” the report said. “Most clocked hours in person -– putting themselves and their loved ones at risk –- while they watched their white-collar counterparts migrate to comfortable and safe remote setups, with their jobs and pay protected.”

To be sure, any such moves are on a small scale when measured against the overall labor force. Still, they can add to the difficulties facing U.S. businesses as they try to fill record numbers of vacant jobs –- more than 10 million as of November – in a rebounding economy. Economists point to lagging pay, Covid sickness, a lack of child-care facilities and early retirements among the reasons for the squeeze. Career rethinks may be another one.

Home Depot Will Add 100,000 Workers This Springs with Next-Day Job Offers

Home Depot has a plan to combat the worker shortage: Speedy job offers. The world’s largest home improvement retailer said Tuesday that job applicants “could receive an offer within one day of applying.”

Home Depot said the “accelerated” hiring process is part of its plan to hire more than 100,000 new associates ahead of its busy spring season. The company is hiring flexible, full-time and part-time positions in customer service, sales, store support, freight, merchandising and warehouse associates.
The move underscores the difficulty businesses are facing as they try to fill open positions.

Fortune’s Most Admired Companies

Fortune’s annual list of the World’s Most Admired Companies was out Wednesday morning, and the top three won’t surprise anyone: Apple, Amazon and Microsoft. They’ve led the list for three years straight. Apple has held the top spot for 15 years straight. Kudos to all.

But next up is a pandemic surprise: Pfizer. The company suffered like all the pharma companies from public displeasure over pricing policies before the pandemic. This year, it made it back to the all-star list for the first time in 16 years, jumping all the way to number four. Let’s see if it can hold that. Another deserving new arrival: Danaher.

See the full list at Fortune

Around the World, CEOs Expect Pricing Pressures to Continue This Year and Next

Pricing pressures, combined with the promise of interest rate increases as soon as March, will make it more important than ever for companies to take control of their cash flow and find ways to maximize their working capital. According to a new global CEO survey from The Conference Board:

CEOs ranked rising inflation as the No. 2 external threat for the coming year, behind only disruptions related to COVID-19.
Only 10% of respondents expected pricing pressures to resolve by mid-2022. The largest group (35%) predicted it will continue through 2022, while others said it could persist through mid-2023 (24%) or beyond 2023 (31%).
About 82% of the respondents said they were facing increased costs for wages, raw materials and other inputs, with 93% of Chinese executives agreeing it was a problem.
Regions view the risk differently. European CEOs listed inflation as their No. 1 risk, while it was No. 4 for Chinese executives. Inflation wasn’t even a Top 10 worry for Japanese leaders, though they were concerned about labor shortages, changes in consumer behavior and volatility in energy prices.

GM CEO: Chip Constraints Will Lessen in Q3

General Motors Corp. executives and their suppliers think their access to semiconductors will continue to improve and no longer be a production constraint come mid-summer, CEO Mary Barra said Feb. 1. Speaking to analysts and investors after GM reported a fourth-quarter profit of $10.0 billion Barra and CFO Paul Jacobson said the company’s chip outlook has them eyeing global production growth of 25% to 30% for 2022, with much of that growth coming from July on.

GM secured a steadier supply of semiconductors in the fourth quarter than in the three months prior and Barra said that trend has carried over into the first few weeks of 2022. Jacobson said the greater number of chips allowed GM to trim its inventory of nearly-finished vehicles late in the year.

Experimental HIV Vaccine, Based on Moderna’s mRNA Technology, Now in Clinical Trial

Researchers have started administering doses of an experimental HIV vaccine that uses the breakthrough mRNA technology in Moderna’s coronavirus shot. U.S. biotech firm Moderna and the nonprofit International Aids Vaccine Initiative (IAVI) are exploring the use of mRNA technology, which prompts the body to make a protein that triggers an immune response (the technology also is used in Pfizer’s coronavirus shot).

Researchers will monitor 56 HIV-negative adults for six months in the Phase 1 clinical trial, typically the first step in a long road to study the safety and efficacy of a vaccine. George Washington University, one of the sites where the trial is taking place, described it as the first human trial of a mRNA-based HIV vaccine.

Consumers Are Pivoting Spending to Services Like Dining and Travel

Americans responded to the pandemic with a dramatic shift in spending to goods from services. That now appears to be reversing and should gather steam as the Omicron wave of Covid-19 ebbs, economists say. Consumers shopped more online in the pandemic, and changed what they bought. Unable to eat out or travel, and with both school and work going remote, they splurged more on things for the home such as furniture and computers. Several rounds of federal stimulus amplified that spending spree.

Goods—including nondurable goods such as food and clothing, and durable goods such as cars and appliances—averaged 31% of total personal consumption in the two years before the pandemic. That soared to 36% in March and April 2021, shortly before Covid-19 vaccines became widely available. But looking ahead, a strong labor market and rising wages mean many U.S. consumers are starting 2022 with robust income prospects that are likely to help fuel the services recovery this year.

DAILY BRIEFING – 453