Member Briefing January 11, 2024
Top Story
World Bank: Global Economy Set for its Worst Half Decade of Growth in 30 Years
The global economy is on course to record its worst half decade of growth in 30 years, according to the World Bank. Global growth is forecast to slow for the third year in a row in 2024, dipping to 2.4% from 2.6% in 2023, the organization said in its latest “Global Economic Prospects” report released Tuesday. Growth is then expected to rise marginally to 2.7% in 2025, though acceleration over the five-year period will remain almost three-quarters of a percentage point below the average rate of the 2010s.
And despite the global economy proving resilient in the face of recessionary risks in 2023, increased geopolitical tensions will present fresh near-term challenges, the organization said, leaving most economies set to grow more slowly in 2024 and 2025 than they did in the previous decade. On a regional basis, growth this year is set to weaken most in North America, Europe and Central Asia, and Asia-Pacific — mainly on account of slower expansion in China. A slight improvement is forecast for Latin America and the Caribbean, coming off a low base, while more marked pickups are expected in the Middle East and Africa.
US Wholesale Inventories, Key GDP Component, Fell in November
U.S. wholesale inventories fell for a second straight month in November, suggesting that a slow pace of inventory accumulation could undercut economic growth in the fourth quarter. The Commerce Department's Census Bureau said on Wednesday that wholesale inventories slipped 0.2% as estimated last month. Stocks at wholesalers dropped 0.3% in October. Economists polled by Reuters had expected that inventories would be unrevised.
Businesses are holding back on inventory accumulation in anticipation of slower demand this year following 525 basis points worth of interest rate hikes by the Federal Reserve since March 2022. The government reported on Tuesday that imports of consumer goods dropped to a one-year low in November, contributing to pushing down overall goods imports 2.3%. Wholesale motor vehicle inventories dropped 1.1% in November after falling 0.4% in October. There were also decreases in wholesale stocks of lumber, computer equipment, metals, electrical equipment, groceries, apparel, petroleum, chemicals and hardware. But stocks of machinery and professional equipment rose.
Global Headlines
Gaza
- Israel and Hamas: The Latest News – The Guardian
- Saudi Arabia Interested in Israel Normalisation Deal After War - BBC
- ICJ to Hear Israel Genocide Accusation Case Brought by South Africa - AP
- Despair in Gaza as Fighting Intensifies – Reuters
- IDF Knows Where Hamas Leader is, But Won’t Strike at Him Because of Hostages – Yahoo
- Arab Neighbours, Palestinians' Abbas Seek to Rally Efforts for Gaza Truce - Reuters
- 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
- Orbán’s Ukraine Compromise Would Allow Him to Hold EU to Ransom Every Year – Politico
- Ukraine's President Denies Facing Pressure from Allies to Stop War – Reuters
- Zelenskyy Says Russia Can be Stopped but Kyiv Badly Needs More Air Defense Systems - AP
- Who Is Robert Woodland? US Citizen Being Held in Russia on Drug Charges - Newsweek
- Ukraine’s War Effort Is Stuck. This Heroic Battlefield Failure Shows Why - WSJ
- 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
- Houthi-Launched Drones Shot Down Over Red Sea By U.S. And U.K. Navies - Forbes
- Latest news — European Parliament Election 2024 – Politico
- Red Sea Attacks: Retailers Rush to Avoid Delays to Spring Collections - Reuters
- U.S. and Its Allies Weigh How to Shut Down Houthi Attacks in Red Sea – Yahoo
- Infographic - Liquefied Natural Gas Infrastructure in the EU – European Council
- China Satellite Launch Causes Pre-Election Political Storm in Taiwan - Reuters
- UN Helicopter and Passengers Seized by al-Shabab in Somalia - BBC
- Crisis Erupts In Ecuador Amid Nationwide Wave Of Gang Violence - Forbes
- Xi Jinping Risks Setting Off Another Trade War – The Economist
Policy and Politics
Spending Bill Won’t Be Done in Time, Senate Republicans Warn
Senate Minority Leader Mitch McConnell (R., Ky.) said the dwindling days left before the deadline meant Congress would have to take up a stopgap bill, known as a continuing resolution or CR, to keep the government open as work continues on full-year fiscal 2024 legislation. The current interim spending law funds some parts of the government through Jan. 19 and the rest through Feb. 2. “Obviously we’re going to have to pass a CR,” McConnell told reporters Tuesday. “It’s up to the speaker and the majority leader to determine the length of the CR,” referring to Johnson and Schumer.
Johnson and Senate Majority Leader Chuck Schumer (D., N.Y.) struck a deal Sunday to set overall discretionary spending at $1.66 trillion for fiscal 2024. But that top-line agreement left unresolved key details, and many conservative Republicans complained the deal didn’t include significant cuts to federal spending they had been advocating for months, raising questions about its passage into law. With 10 days until Jan. 19, McConnell said that “the simplest things take a week in the Senate.
Mixed Reaction to Governor Hochul’s State of the State address
Governor Kathy Hochul’s State of the State address focused on three parts of her “Our New York, Our Future” agenda this afternoon. Reaction to her proposals from officials upstate is mixed. The Democrat focused on crime, affordability and housing. Hochul told legislators that the state has a unique opportunity to be a leader in AI technology development.
North Country Chamber of Commerce President Garry Douglas welcomes several elements of the governor’s 2024 agenda, particularly her recognition of the state’s population loss. Douglas said. "It was important to have the governor acknowledge that. We now are talking about maybe by the time of the next national census New York losing maybe three or four additional Congressional seats. Assembly Minority Leader Will Barclay is a Republican from the 120th district said “I don’t know how she’s going to solve for instance the out-migration," said Barclay. "We’ve lost 100,000 people in the last year. Now housing. She mentioned housing. Great. We do need to build more housing in New York. But I think she wants more government intrusion into that housing market and just you know subsidizing housing where we would be more less regulations, private developers to do that.”
College Enrollment Could Take a Big Hit in 2025. Here’s Why.
After peaking in 2010, undergraduate enrollment dropped from roughly 18.1 million students that year to about 15.4 million in 2021 amid changes in the country’s economy and immigration policies and the onset of the COVID-19 pandemic. And while enrollment increased slightly last year, higher education experts worry a significant demographic shift could send enrollment into a more dramatic decline beginning in 2025.
One of the most important contributing factors to the country’s dwindling college enrollment is that the number of children born in the U.S. has been shrinking. The decline began roughly 17 years ago. Before then, the national birth rate had been increasing, and the number of births in the country climbed to an all-time high in 2007, according to the Centers for Disease Control and Prevention (CDC). But then the Great Recession hit, causing fertility rates to plummet. The national birth rate fell by almost 23 percent between 2007 and 2022. At the beginning of that period, between 2007 and 2009, fertility rates fell more rapidly than any other two-year period in the country’s recent history. Fast forward to the present day, and the nation has a deficit of high school seniors preparing to go to college.
Health and Wellness
Substance Use-Related Heart Disease Deaths Skyrocketed Over Past 20 Years, Study Finds
Substance use-related cardiovascular disease deaths more than doubled between 1999 and 2019, despite overall cardiovascular disease deaths decreasing by 25%, according to a new study published Tuesday in the Journal of the American Heart Association. These increases were more notable in those who used psychostimulants like cocaine (16.8), and cannabis (12.7%), as well as among American Indians or Alaskans (5.4%), adults between 25 and 49 (5.3%), people in rural areas (5%) and women (4.8%), though overall there were more deaths in men.
Alcohol was the most prominent substance and contributed to 65% of these deaths, followed by opiods (13.7%), cocaine (9.8%), stimulants (6.5%), sedatives (4.1%) and cannabis (0.5%)—smoking and tobacco use weren’t included as factors in the study. The most common age range for substance use-related cardiovascular disease deaths was 55 to 69 (39.1%), followed by 40 to 54 (36.8%) and 70 to 84 (12.1%), the JAAA study reports. Around 10% of the U.S. population, or 23 million adults, will at some point develop substance use disorder, and about one-third of Americans will have alcohol use disorder at some point, though only a small fraction will receive treatment, a 2021 study published in the Journal of Clinical Pharmacology found.
Election 2024
- Ahead of Iowa Caucuses, Big 2024 Election Changes Are Baffling Voters - WSJ
- The 7 GOP Candidates' Path to victory ‒ or Defeat in the Iowa Caucuses – Des Moines Register
- 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
Importers Face Surging Shipping Costs, Delays as Red Sea Diversions Pile Up
Western importers are reporting a steep rise in ocean-shipping rates and weekslong delays as carriers divert ships from the Red Sea to avoid Houthi rebel attacks. Some companies shipping goods on the crucial trade lane are starting to chafe at the rising prices and extra fees that ocean carriers are imposing for the higher cost of routing containerships on longer voyages around the Horn of Africa following drone and missile attacks by Houthi rebels in Yemen.
Average worldwide costs to ship 40-foot-long containers have nearly doubled since late November, according to London-based Drewry Shipping Consultants. The increases have also accelerated in the past two weeks on routes that traditionally use the Suez. The spot-market price to move containers between China and Rotterdam in the Netherlands reached $3,577 in the week ending Jan. 4, a 115% increase from the week before.
US Consumer Borrowing Surges on Jump in Credit-Card Balances
US consumer borrowing surged in November by the most in a year on a jump in credit-card balances as the holiday-shopping season kicked into high gear. Total credit rose $23.8 billion after rising a revised $5.8 billion in October, according to Federal Reserve data out Monday. The figure well exceeded the highest estimate in a Bloomberg survey of economists, which had a median forecast of $8.6 billion.
Revolving credit outstanding, which includes credit cards, increased $19.1 billion in November, the most since March 2022. Non-revolving credit, such as loans for vehicle purchases and school tuition, climbed $4.6 billion. The figures aren’t adjusted for inflation. According to separate data from the New York Fed, the amount of revolving debt outstanding was more than $150 billion higher in the third quarter than a year earlier, the largest annual increase in data back to 1999. There are some signs of stress. New York Fed data also showed the rate of credit-card debt becoming newly delinquent rose in the third quarter.
EIA Sees U.S. Setting New Oil Production Record in 2025,
The Energy Information Administration’s latest Short-Term Energy Outlook report published on Tuesday represents the first peek into predictions for 2025. Those predictions include the United States hitting 13.4 million bpd in crude oil production after continued production growth over the next two years “driven by increases in well efficiency.” U.S. production of dry natural gas is seen growing at a rate of 1.3 Bcf/d in 2025, compared to the 4.0 Bcf/d seen in 2023. For U.S. coal production, the EIA predicts a decline by more than 90 million short tons to less than 430 MMst in 2025—the least amount of coal produced in the United States since the early 1960s, the EIA said in its report.
Power generated by wind, the largest source of U.S. clean electricity, likely fell in 2023 for the first time in over two decades, the EIA said, as difficult conditions and rising costs curbed capacity growth. Total wind generation is expected to have fallen about 1% in 2023 to 430.24 billion kilowatt hours, the EIA said in its Short Term Energy Outlook (STEO) report. Total wind capacity reached an estimated 149.4 gigawatts in 2023, up 6% from 2022, the slowest capacity addition in a decade, it added.
BP, Equinor Tear Up Contract for Big New York Offshore Wind Project
BP Plc and Equinor ASA have terminated their power agreement with New York state for a 1.3-gigawatt wind farm in the Atlantic Ocean, blaming changing economic circumstances that made the Empire Wind 2 project unviable. The companies said they plan to seek new offtake opportunities, according to a statement Wednesday. BP and Equinor were among a group of developers that were rebuffed in October after asking state regulators for higher rates to deliver power from offshore wind farms.
The rejection was just the latest blow to the US offshore wind industry, which is struggling to adjust to rising inflation, supply-chain issues and other factors that have driven up costs. Many projects are in jeopardy as developers are forced to recalculate the numbers for proposals originally modeled years ago. “It appears that the economies of scale just aren’t enough to help these projects amid these macroeconomic events,” said Timothy Fox, an analyst at ClearView Energy Partners.
Boeing 737-9 Parts Suppliers Spirit AeroSystems Subject of Lawsuit Prior to Door Plug Blowout
The manufacturer of the door plug that was blown out in mid-air during a Alaska Airlines flight on Friday was the focus of a class-action lawsuit filed less than a month earlier, with the complaint alleging that Spirit AeroSystems had experienced "sustained quality failures" in its products. The complaint, filed on December 19 in federal court in New York, was filed on behalf of investors in Spirit AeroSystems, which was originally a manufacturing unit of Boeing until it was spun off in 2005 (
The midair incident involved a door plug, panels designed to fit into doors that typically aren't needed on an aircraft, transforming them into windows. One of these plugs was sucked out of a Boeing 737 Max 9 flown by Alaska Airlines just minutes after the plane departed Oregon's Portland International Airport on its way to Ontario, California. Alaska and United Airlines — the only two U.S. carriers to fly the Boeing 737 Max 9 — have since said they have found loose bolts inside several other door plugs on the jets, which the Federal Aviation Administration has grounded.
Drought at the Panama Canal - Delay, Rising Prices, and Possible Fixes
Parched conditions have crippled a waterway that handles $270 billion a year in global trade. And there are no easy solutions. The Panama Canal Authority is weighing potential fixes that include an artificial lake to pump water into the canal and cloud seeding to boost rainfall, but both options would take years to implement, if they’re even feasible. With water levels languishing at six feet (1.8 meters) below normal, the canal authority capped the number of vessels that can cross.
The limits imposed late last year were the strictest since 1989, when the conduit was shut as the US invaded Panama to extract its de facto ruler, Manuel Noriega. Some shippers are paying millions of dollars to jump the growing queue, while others are taking longer, costlier routes around Africa or South America. In the long term, the primary solution to chronic water shortages will be to dam up the Indio River and then drill a tunnel through a mountain to pipe fresh water 8 kilometers (5 miles) into Lake Gatún, the canal’s main reservoir.
BMW Retools Munich Headquarters for All-Electric Production From 2027
BMW is investing 650 million euros ($711 million) to convert its main plant in Munich to exclusively produce EVs from the end of 2027, the carmaker said on Wednesday, a major stepping stone in the transition to the electric age. It is putting up four buildings including a new vehicle assembly line and body shop, and has moved traditional engine manufacturing to Great Britain and Austria, with 1,200 employees retrained or moved to other locations.
Unlike other carmakers, BMW has not set its own target for ending production of combustion engine cars, but is coming up against European Union regulation which effectively bans the sale of new petrol and diesel cars in the bloc from 2035. All-electric vehicles made up 15% of the Munich-based carmaker's sales in 2023, a ratio it expects to rise to a third by 2026. Carmakers from Mercedes-Benz to Volkswagen have warned in recent months that EV sales are not developing as fast as expected, with economic pressures weighing on consumers just as supply chain bottlenecks that had held up production began to ease.
Eli Lilly Now Offering Obesity Drug Zepbound Direct to Consumers
Eli Lilly has launched a new online service last week to provide telehealth prescriptions and direct home delivery of its weight-loss drug Zepbound. The service, called LillyDirect, also will offer delivery of certain Lilly insulin products and a migraine drug. The company may add other products in the future. “We’ve noticed that patients often struggle to manage their disease not because of the medicine itself but because the pathway to getting the medicine can be really challenging,” CEO David Ricks told The Wall Street Journal. “Sometimes that’s the pharmacy experience where products are out of stock or markups in pricing are confusing.”
For its new service for Zepbound, Lilly partnered with telehealth provider Form Health, which specializes in weight loss. Form Health also offers prescriptions for non-Lilly drugs such as Wegovy, and Form’s prescribers won’t be obligated to prescribe Zepbound. LillyDirect also will provide patients with access to telehealth providers and allow for search tools to find health-care professionals near patients if in-person care is preferred..
CES 2024: The Most Interesting News and Gadgets from Tech’s Big Show
CES 2024 is taking place in Las Vegas this week. The multi-day trade event put on by the Consumer Technology Association is set to feature swaths of the latest advances and gadgets across personal tech, transportation, health care, sustainability and more — with burgeoning uses of artificial intelligence almost everywhere you look. T
he Associated Press will be keeping a running report of everything we find interesting from the floor of CES, from the most interesting developments in vehicle tech, to wearables designed to improve accessibility to the newest smart home gadgets.