Member Briefing January 10, 2023
Orders for US Manufactured Goods Fell in December
New orders for U.S.-manufactured goods fell more than expected in November amid a sharp decline in bookings for aircraft, while higher borrowing costs cooled demand for other goods. The Commerce Department said on Friday that factory orders dropped 1.8% after gaining 0.4% in October. The plunge in factory orders was driven by a 6.3% drop in bookings for transportation equipment, which followed a 1.9% increase in October.
Transportation equipment orders were weighed down by a 36.4% tumble in orders for civilian aircraft. Orders for defense aircraft fell 8.6%. Motor vehicle orders rose 0.6%. There were moderate gains in orders for machinery, computers and electronic products as well as electrical equipment, appliances and components. Transportation equipment orders were weighed down by a 36.4% tumble in orders for civilian aircraft. Orders for defense aircraft fell 8.6%. Motor vehicle orders rose 0.6%. There were moderate gains in orders for machinery, computers and electronic products as well as electrical equipment, appliances and components.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Ukraine’s Forces Hold Front-Line City of Bakhmut, Zelensky Says - WSJ
- No Sign of Casualties After Russia Claims Revenge Attack on Ukrainian Soldiers - Reuters
- Kremlin Claim of Deadly Retaliatory Strike Criticized in Russia – USA Today
- Ukraine’s M-2 Fighting Vehicles Aren’t Tanks. But They Sure Can Kill Tanks. – Forbes
- Missile Attack on Village Market Kills Two Women - CNBC
- France is Sending Tank-Killing AMX-10RC Armored Vehicles to Ukraine – Business Insider
- Shifting Strategy, Ukraine Goes Toe to Toe With Russia in Bakhmut – NY Times
- German Won't Rule Out Deliveries of Leopard Tanks to Ukraine, Economy Minister Says - Reuters
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Strong Economic Data Point to Shallow Eurozone Recession
Eurozone unemployment hit a fresh record low, while output from German factories rose in November, boosting hopes of a milder-than-feared economic downturn across the single currency area. Figures from Eurostat, the European Commission’s statistics bureau, showed that the number of people in the labour market without work fell slightly in November. Eurostat reported 10.849mn workers without jobs, 2,000 less than in the previous month and the lowest since records began. The unemployment rate remained unchanged from October at 6.5 per cent.
Meanwhile, the German federal statistics office reported industrial production increased 0.2 per cent between October and November, a slightly better reading than the 0.1 per cent expansion forecast by economists polled by Reuters. The resilience of the eurozone economy and its labour market are expected to lead to more policy rate increases by the European Central Bank.
U.S. Manufacturers Dealing with Decreasing Demand and Tight Labor Market
Demand for manufactured goods has been falling in recent months in the U.S. and overseas, says Scott Paul, president of the Alliance for American Manufacturing. “We have interest rates that are hitting businesses in the United States, and consumers in the United States,” Paul said. “You had the COVID lockdowns in China, you have a lot of economies dealing with inflation.”
Meanwhile, manufacturers are still dealing with a tight labor market, according to Chad Moutray, chief economist with the National Association of Manufacturers. Wage growth continues to be very elevated,” Moutray said. “And manufacturers continue to tell me just how difficult it is to attract and retain workers.” But falling demand for manufactured goods has helped to make supply chains less congested. Input prices have also been falling. “That also is an encouraging sign that some of those bigger problems that manufacturers have had to face over the last couple years … have started to pull back a little bit, at least in terms of their severity,” Moutray said.
U.S. COVID – RSV Recedes and Flu Peaks as a New COVID Variant Shoots 'Up Like a Rocket
As the new year begins and the depths of winter approach, U.S. infectious disease experts monitoring the "tripledemic" stew of viruses that have been plaguing the country say there's good news — and bad. The good news is the worst appears to be over from the RSV surge. RSV cases have been falling steadily since the end of November, according to the Centers for Disease Control and Prevention. At the same time, the flu looks like it's finally receding in most places, according to the latest data out Friday from the CDC.
The Bad news is the rate at which the coronavirus is being detected in wastewater, which has become a bellwether for the pandemic, has tripled or quadrupled in many parts of the U.S. in recent weeks. COVID-19 hospitalizations have jumped 70%, and 300 to 400 people are dying every day from COVID-19. To make matters worse, all this is happening as yet another new, even more transmissible variant has taken over in the United States. Called XBB.1.5, this new omicron subvariant was barely on the radar in late November. But according to new estimates released Friday by the CDC, XBB.1.5 now accounts for almost a third of new infections and is the dominant variant in the Northeast.
mRNA Cancer Vaccine Trials Could Start in England by Autumn
The UK health secretary, Steve Barclay, is to sign a memorandum of understanding with BioNTech on Friday to “ensure the best possible treatments are available as soon as possible” for cancer. The agreement means cancer patients in England will get early access to trials exploring mRNA therapies, such as cancer vaccines, possibly from as early as autumn.
MRNA treatments are tailor-made for the individual and provide immune systems with genetic code from the specific cancer so it can attack only the tumour, whereas chemotherapy targets lots of different cells as well as the cancer. BioNTech worked with Pfizer to develop the widely used mRNA vaccination against Covid, and its partnership with the UK government could deliver 10,000 doses of personalised therapies to UK patients by 2030 through a new research and development hub. Barclay said: “Once cancer is detected, we need to ensure the best possible treatments are available as soon as possible, including for breast, lung and pancreatic cancer.
Latest Reports Show Manufacturing Jobs Overall Stable Despite Persistent Churn
A pair of reports released by the Bureau of Labor Statistics last week shows that manufacturing employment remains stable despite significant churn and persistently high job openings. Manufacturing companies hired a net estimated 8,000 jobs, matching November’s slow growth but falling short of the 32,000 average new hires per month for 2022. Almost all the new hires in December, though, were in durable goods manufacturing, offsetting significant losses in nondurable goods production.
At the same time, demand for manufacturing workers grew as the Bureau’s Job Openings and Labor Turnover report for November, released Wednesday, showed the number of openings at manufacturing firms last month grew by 57,000 postings to 779,000 open positions, somewhat lower than the year average of 837,000 but still elevated compared to pre-Covid years. New manufacturing hires in December were almost entirely concentrated in durable goods production, offsetting widespread losses across almost every category of the nondurables industry. Gains of 24,000 jobs in durable goods offset a loss of 16,000 across the nondurable goods production segments.
China’s Covid-19 Infections Hit Peak in Populous Regions, Officials Say
Over the weekend, China’s National Health Commission said infections in several major cities were either peaking or had peaked. The health agency’s Jiao Yahui told flagship state broadcaster China Central Television that there were signs emergency-room visits were declining nationwide, though intensive-care units were still under stress.
Those updates sought to follow the message sent by Communist Party leadership last month in the Central Economic Work Conference attended by President Xi Jinping. The economic conference, which pledged to focus on growth in 2023, directed local officials to pivot away from preventing Covid infections and toward ensuring a smooth transition that would give priority to the treatment of severe cases and the elderly.
U-Haul: People Moving Out of NY, California — Heading to Texas, Florida
People are U-Hauling it out of New York and California — and flocking to lower-taxed places, including Texas and Florida, a new study released Tuesday found. The report by U-Haul truck rental moving service shows that sunny California — the Golden State — has gone from Dreamin’ to Leavin’, while more folks are departing the once mighty Empire State than are moving into New York.
California ranked dead last this year, with more one-way U-Haul rentals leaving the state than moving in — while New York ranked a lowly 46th. The rest of the bottom six was rounded out by a group of other famously blue states: New Jersey at number 45, Massachusetts at 47, Michigan at 48 and Illinois at 49. Where are folks moving to? Texas is the No. 1 growth state for the second consecutive year and the fifth time since 2016, U-Haul reports.
Tech Industry Reversal Intensifies With New Rounds of Layoffs
After a bruising 2022 in which companies from small startups to tech giants slammed the brakes on expansion, some of the biggest names in the sector are demonstrating that an era of austerity is only beginning, with expenses closely scrutinized and moonshot projects abandoned. Amazon.com Inc. and Salesforce Inc. both announced plans for layoffs in the past week. The job cuts at Amazon, the largest in the tech sector to date, affect more than 18,000 workers, mostly in the retail, recruiting and devices businesses.
For years, the tech sector was among the most aggressive to expand. Companies competed for talent by offering lucrative pay packages and throwing big money at new endeavors. As Covid-19 set in, the rush to hire went into overdrive as technology companies tried to cash in on supercharged demand. But over the past months, several tech companies have shifted from hiring one moment to slashing thousands of positions the next as the business climate deteriorated. The experience has been humbling for some of America’s best-known corporate executives.
Training is Still one of the Best Ways to Prevent Falls
A recent survey uncovered interesting findings into the underlying causes of workplace falls from height. The anonymous 32-question Fall Experience Survey, conducted by The Center for Construction Research and Training with support from the American Society of Safety Professionals, gathered information from 671 safety professionals and others about workplace falls they had been involved in, witnessed or investigated. Key Findings from the Survey:
- Insufficient or ineffective planning was the most selected primary cause for falls (27%).
- The likelihood of using fall protection was 71% lower for individuals whose employer or competent person did not do any planning.
- Nearly half (49%) of respondents said that no fall protection was being used at the time of the fall.
- Respondents who believed fall protection was required by their employer were eight times more likely to use it.
- The odds of a fall being fatal were 76% lower for those who had self-rescue training compared to those who did not have this training.
- Subcontractor employees were 2.7 times more likely to die from the fall than those who worked for a general contractor.
Tesla's New No. 2 Won Elon Musk Over by Working Around the Clock – Who is HE?
In a Twitter photo celebrating Tesla Inc. producing 3,000 Model Ys a week at its Texas factory last month, Zhu Xiaotong, who goes by Tom Zhu, stood smiling to the left of the large crowd in a hi-visibility vest and black cap imprinted with a white "T" for Tesla.
Zhu, who spearheaded the U.S. carmaker's Asia Pacific operations and oversaw Tesla's factory in Shanghai become its most productive in the world, was brought over to Austin late last year to help run the company's newest plant. Although Tesla hasn't made any formal announcement and has yet to name him as an executive officer, it's understood Zhu is now overseeing global automotive production, sales and service, a level of responsibility arguably second only to Chief Executive Officer Elon Musk. So who is Zhu?
As White-Collar Layoffs Rise, Blue-Collar Resilience Faces Test in 2023
Layoff rates in these white-collar industries are still historically low, at 1% of total employment in November, according to the Labor Department, compared with 0.9% in February 2020. Their recent rise, however, contrasts with industries where manual labor is more prevalent and pay lower. Manufacturing, leisure and hospitality and retail all laid off fewer workers on average in the three months through November compared with a year earlier.
Many blue-collar workers might fare better than they did in previous downturns. Demand for goods and services, while softening, is still too high for many employers to consider layoffs. If demand does soften, industries such as leisure and hospitality might hesitate to fire the front-line workers they struggled to hire and retain during the pandemic rebound, some economists contend.
Consumer Confidence in Housing Finally Rises, Thanks to Falling Home Prices
Mortgage rates are still twice what they were a year ago, but home prices have been falling since June, and that’s finally making consumers feel better about what had been an overheated, highly competitive housing market.
A monthly housing sentiment index from Fannie Mae showed sentiment improving from November to December. The index is still lower than it was a year ago and just slightly off its record low set in October and November. The share of respondents saying now is a good time to buy a home was still low, at just 21%, but it was up from 16% in October. The share saying now is a bad time decreased.
Inflation in the Eurozone Falls Back to Single Digits as Downward Trend Continues
Annual inflation across the eurozone fell back to the single-digit territory and stood at 9.2% at the end of December, according to a flash estimate released by Eurostat on Friday morning. Inflation started easing in November but still stood at 10.1%. It comes as gas prices, one of the main drivers behind last year's record-breaking inflation, returned to pre-war levels amid unusually warm weather. However, core inflation, which excludes the volatile prices of energy, food and tobacco and therefore gives a more accurate picture of the health of the economy, went slightly up, from 5% in November to 5.2% in December.
Spain (5.6%), Luxembourg (6.2%) and France (6.7%) recorded the lowest inflation rates across the bloc, while Latvia (20.7%), Lithuania (20%) and Estonia (17.5%) again saw the highest levels. Energy inflation receded sharply, from 34.9% in November to 25.7% in December, while fresh food saw a more moderate contraction, from 13.8% to 12.% over the last month.