Member Briefing January 18, 2023

Posted By: Harold King Daily Briefing,

Manufacturing “Activity Tumbles” According to NY Fed Survey

Manufacturing activity fell steeply in New York State, according to the January survey. The general business conditions index fell twenty-two points to -32.9, its lowest level since mid-2020 and the fifth worst reading in the survey’s history. Input and selling prices fell in a sign that inflation may be coming under control.

  • The new orders index dropped twenty-eight points to -31.1, and the shipments index also declined twenty-eight points to -22.4.
  • The unfilled orders index edged down to -14.3, a sign that unfilled orders were lower.
  • The inventories index held steady at 4.5, pointing to a small increase in inventories.
  • The index for number of employees fell eleven points to 2.8, its lowest level in more than two years.
  • The prices paid index dropping eighteen points to 33.0. Selling price increases also moderated, with the prices received index falling six points to 18.8.

Looking ahead the index for future business conditions held steady at 8.0, suggesting that firms expect little improvement over the next six months. New orders and shipments are expected to rise somewhat, while employment is expected to increase only modestly. The capital spending index held steady at 22.3, and the technology spending index rose to 17.0.

Read more at the New York Fed

War in Ukraine Headlines


Goldman Sees ‘Bullish Concoction’ for Global Commodities

Commodities have the strongest outlook of any asset class in 2023, with a perfect macroeconomic environment and critically low inventories for almost every key raw material, according to the head of commodities research at Goldman Sachs Group Inc.  This year has started with a pullback in prices driven by warm weather shock and rising interest rates, Jeff Currie said at a presentation in London on Monday. But demand in China starting to rebound and there’s insufficient investment in supply, meaning the year as a whole will be a “Goldilocks” moment for rising prices, he said.

“You cannot come up with a more bullish concoction for commodities,” Currie said. “Lack of supply is apparent in every single market you look at, whether it is inventories at critical operating levels or production capacity exhausted.”

Read more at Yahoo

China's First Population Drop in Six Decades Sounds Alarm on Demographic Crisis

The country's National Bureau of Statistics reported a drop of roughly 850,000 people for a population of 1.41175 billion in 2022, marking the first decline since 1961, the last year of China's Great Famine. That possibly makes India the world's most populous nation. U.N. experts predicted last year India would have a population of 1.412 billion in 2022. Long-term, U.N. experts see China's population shrinking by 109 million by 2050, more than triple the decline of their previous forecast in 2019.

That's caused domestic demographers to lament that China will get old before it gets rich, slowing the economy as revenues drop and government debt increases due to soaring health and welfare costs. "China's demographic and economic outlook is much bleaker than expected. China will have to adjust its social, economic, defense and foreign policies," said demographer Yi Fuxian.

Read more at Reuters

U.S. COVID – Large New Review Underscores the Risks of Covid-19 During Pregnancy

Pregnant women and their developing babies are at higher risk for severe outcomes if they get Covid-19, The study, published in BMJ Global Health, draws on data from 12 studies from as many countries—including the United States. Altogether, the studies included more than 13,000 pregnant women—about 2,000 who had a confirmed or probable case of Covid-19. The health outcomes for these women and their babies were compared to about 11,000 pregnancies where the mother tested negative for Covid-19 or antibodies to it at the time of their deliveries.

Compared to pregnant individuals who weren’t infected, those who got Covid-19 were nearly 4 times more likely to be admitted to an intensive care unit. They were 15 times more likely to be ventilated and were 7 times more likely to die. They also had higher risks for pre-eclampisa, blood clots, and problems caused by high blood pressure. Babies born to moms who had Covid-19 were at higher risk for preterm birth and low birth weights. Previous studies have suggested that Covid-19 may increase the risk of stillbirth, but this study didn’t find that same link.

Read more at CNN

NY Vaccine Mandate for Healthcare Workers 'Null, Void' Following Judge Ruling

A state Supreme Court judge ruled on Friday that the Commissioner of Health for New York State, Governor Kathy Hochul and the New York State Department of Health overstepped their authority when mandating the COVID-19 vaccine for healthcare workers, a vaccine not included in the state public health law. Judge Gerard Neri sided with Medical Professionals for Informed Consent, a group of medical workers who filed on October 20, 2022. The judge wrote in the ruling that the mandate is "null, void."

Steven M. Cohen, litigation chair with HoganWillig Law Firm said this ruling will, without a doubt, be appealed. Cohen said in the judge's ruling, the judge acknowledges that the vaccine doesn't stop the transmission of COVID-19. "What his honor did is he said, 'Look whether you want to take the vaccine or not, that's up to you but it's not up to the executive branch of government,'" Cohen explained.

Read more at WKBW (Buffalo)

China Reports 3% GDP Growth for 2022 Near Historic Lows

China’s economy grew at one of its slowest rates in decades last year as repeated Covid-19 lockdowns hammered households and businesses.. GDP grew by 3% in 2022, the National Bureau of Statistics said Tuesday. Retail sales fell by 0.2% for the year. But retail sales in December declined by 1.8% from a year ago, less than the expected 8.6% plunge predicted by a Reuters’ poll.

Industrial production rose by 3.6% in 2022. The figure rose by 1.3% in December, well above the 0.2% predicted by the Reuters’ poll. Fixed asset investment for 2022 rose by 5.1%, slightly above the 5% expected by Reuters. Infrastructure investment on a year-to-date basis grew faster in December than in November, while investment into manufacturing slowed its growth. Real estate investment fell by 10% in 2022, a steeper drop than recorded for the year through November.

Read more at CNBC

McCarthy Renews Calls for Spending Cuts to Raise Debt Ceiling

 House Speaker Kevin McCarthy (R., Calif.) said Sunday he would seek to negotiate with President Biden over raising the federal debt ceiling but renewed his calls for cuts in spending, days after the Treasury Department said the government may not be able to pay its bills by early summer.Treasury Secretary Janet Yellen said the government would hit the roughly $31.4 trillion borrowing limit on Jan. 19, when Treasury will begin implementing so-called extraordinary measures to manage the government’s cash flow that are expected to last at least until early June.

Republicans, who recently took control of the House, have insisted that any increase of the debt limit include cuts in spending, a demand that many Democrats reject. The White House has called on Congress to raise the debt ceiling without conditions. Mr. McCarthy on Sunday didn’t commit to specific cuts, nor did he rule out any parts of the budget for reductions. Republicans are split over whether to seek cuts to Pentagon spending as the U.S. is providing extensive military support to Ukraine.

Read more at the WSJ

Shopper Rebellion Against Higher Prices Helps Slow Inflation

Many companies raised their prices substantially last year to offset higher fuel costs and higher prices for ingredients, parts and labor. As fuel prices have dropped and pandemic supply-chain snarls have eased, some of those costs have come down. That is a good sign for the economy. It suggests that some inflation in the past year resulted from extreme supply-demand imbalances brought on by the pandemic and the war in Ukraine and which are now fading.

Consumers last year cut back on purchases, suggesting that they were hitting a ceiling on prices they were willing to pay. Unit sales of general merchandise, a category that includes home décor and small appliances, fell 7% in 2022 compared with 2021, according to data from IRI and NPD, which track store and online purchases. Dollar sales of those items fell 2%, reflecting higher prices. Unit sales of food and beverages fell 3% last year, but on a dollar basis they rose 10%. That showed consumers were willing to pay higher prices for groceries but bought fewer items.

Read more at the WSJ

AIHA Issues New Public Policies

The number of hazards in the workplace is the background for the American Industrial Hygiene Association (AIHA) to determine the organization's policy agenda for 2023. In addition to specific policies to address these issues, the organization is focused on encouraging more students to pursue careers in occupational and environmental health and safety (OEHS). This includes not only improving school infrastructure but creating better learning environments for students and better working conditions for teachers and other school personnel as well.

AIHA's three public policy priorities for 2023 are:

  • Protecting Workers and the Public from Hazardous Noise Exposure
  • Protecting Workers and the Public from Thermal Stress
  • Strengthening the Occupational and Environmental Health and Safety (OEHS) Professional Pathway and Improving the Learning and Working Conditions of Schools

For other issues not covered by these public policy priorities, AIHA will continue to engage with association members and policymakers. The association’s goal is to translate as much of its members’ technical expertise into public policy recommendations as possible to protect more workers and their communities.

Read more at EHS Today

Oil Prices Rise on Hopes of China Demand Rebound

Oil prices rose to their highest in two weeks on Tuesday after China posted weak but expectation-beating annual economic growth data and on hopes that a recent shift in its COVID-19 policy will boost fuel demand. Brent crude futures rose $1.39, or 1.7%, to $85.85 a barrel by 11:58 a.m. EDT (1658 GMT).  U.S. West Texas Intermediate (WTI) crude was up 36 cents, or 0.5%, at $80.22. There was no settlement on Monday because of a U.S. public holiday for Martin Luther King Day.

Oil has also been bolstered by a weaker U.S. dollar, which fell against most major currencies on Tuesday. A weakening dollar makes greenback-denominated oil less expensive for other currency holders.

Read more at Reuters

EVs Made Up 10% of All New Cars Sold Last Year

Electric-vehicle sales crossed a global milestone last year, achieving around 10% market share for the first time, driven mainly by strong growth in China and Europe, according to fresh data and estimates. While EVs still make up a fraction of car sales in the U.S., their share of the total market is becoming substantial in Europe and China, and they are increasingly influencing the fortunes of the car market there as the technology goes mainstream. The surge in EV sales also contrasted with the broader car market that suffered from economic worries, inflation and production disruptions.

Global sales of fully electric vehicles totaled around 7.8 million units, an increase of as much as 68% from the previous year, according to preliminary research from LMC Automotive and, research groups that track automotive sales.

Read more at the WSJ

German Finance Minister Says Country Will Likely Face a ‘Very Mild’ Recession This Year, Expresses Concern Over US Green Subsidies

German Finance Minister Christian Lindner said Tuesday that he believed the country would experience a mild recession in 2023, but that he felt positive about his country’s economic outlook. He added that he felt more positive about 2023 and 2024 than just a few months ago.

Lindner also addressed the U.S. administration’s Inflation Reduction Act, which he said he had some concerns about. “We need trade diplomacy and not any kind of trade war or a competition between the United States and European Union who can afford to pay more subsidies. There will the two losers, the U.S. and the European Union,” Lindner said. While he said he understood the U.S. government’s focus areas of a green transition and its relationship with China, he also believes the “negative side effects on the European Union and our bilateral trade relationship” must be minimized.

Read more at CNBC

Canadian Woman is Ordered to Repay $2,000 After Her Employer Used Software to Track Her Time

When Canadian accountant Karlee Besse was fired for being unproductive at her job, she found herself up against not only her former employer, but its time-tracking software, too. Her employer argued that Besse was rightfully let go because she engaged in time theft. Reach CPA said it gathered evidence using TimeCamp, time-tracking software that records what files are accessed, and for how long. The records showed a discrepancy of 50 hours between what Besse reported as time worked and what TimeCamp logged as work activity.

TimeCamp is able to record when and how long employees access work-related documents, and to differentiate – based on electronic pathway – from when they're on non-work sites, such as a streaming service like Disney Plus. Besse also argued that she spent a significant amount of time working with paper documents but didn't tell her company because "they wouldn't want to hear that." However, TimeCamp also tracks printing activity and the company found no evidence that she printed a large volume of documents.

Read more at NPR

Study: Electric Car Batteries Could Vastly Boost Grid Storage

New research published Tuesday found that electric car batteries could help boost short-term grid storage in times of increased demand or lower supply, either by setting up "vehicle-to-grid" or "second use" schemes. "Harnessing this potential will have critical implications for the energy transition," said the study published in Nature Communications.

A "vehicle-to-grid" approach would allow drivers to connect car batteries to the grid for short term-storage when needed, the authors said. For example, commercial fleets could inject power into the grid when at a depot.

Read more at IndustryWeek

GM’s New Hybrid Corvette Will Be Its Fastest Yet

The first gas-electric hybrid Corvette will also be the fastest version of the American sports car, General Motors Co. said Tuesday. The Chevrolet Corvette E-Ray will start at just over $104,000 and go on sale later this year, 70 years after the first Corvette was unveiled.  The E-Ray can go from zero to 60 miles an hour in 2.5 seconds, about 0.1 second faster than the 2023 Corvette Z06, a spokesman for the auto maker said.  

The car doesn’t have to be plugged in to be charged. Instead, the lithium-ion battery charges when the car slows down or brakes, GM said. It will still have the roaring V-8 engine the Corvette is known for. The battery will power the front wheels of the vehicle, the auto maker said. even in snow. GM said the E-Ray can be bought as a coupe or a convertible, which will start at $111,000.

Read more at Yahoo