Member Briefing January 19, 2023
PPI = 6.2% The Producer Price Index Declined 0.5% for the Month
The producer price index, which measures final demand prices across hundreds of categories, declined 0.5% for the month, the Labor Department reported Wednesday. Economists surveyed by Dow Jones had been looking for a 0.1% decline. The decline was the biggest on a monthly basis since April 2020. For the year, headline PPI rose 6.2%, the lowest annual level since March 2021 and down considerably from the 10% annual increase in 2021.
Excluding food and energy, the core PPI measure rose 0.1%, matching the estimate. A sharp drop in energy prices helped bring the headline inflation reading down for the month. The PPI’s final demand energy index plunged 7.9% on the month. Within that category, wholesale gasoline prices fell 13.4%.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Who is Valery Gerasimov, Russia’s Latest Commander in Ukraine? – The Economist
- Davos Struggles to Get Used to a World Without Russia - Politico
- Putin: Russian Military-Industrial Might Makes Victory in Ukraine 'Inevitable' – Reuters
- Ukrainian President Volodymyr Zelenskyy addresses World Economic Forum - Euronews
- War in Ukraine Strains Ties Between Putin and His Old Serb Ally – Bloomberg
- Zelensky Addresses World Economic Forum – The Hill
- Putin Could be Ready to Announce a Second Mobilization Drive - CNBC
- US Transfers Military Weapons Stockpile From Israel to Ukraine – Fox News
- 'Ukraine Refugee Porn' Raises Risks for Women Fleeing the War - Euronews
- Ukraine Helicopter Crash Kills at Least 17, Including Cabinet Minister - NYT
- Russian Strike Toll: 45 Dead Civilians, Including 6 Children – Politico
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
US Consumer Spending Growth Slowed in December, NY Fed Survey Finds
Spending by U.S. consumers is growing at a slower pace and the share of households making major purchases in recent months declined, according to a report from the Federal Reserve Bank of New York. Monthly household spending grew by 7.7% in December from a year earlier, down from a high of 9% reached in August, according to survey results released by the New York Fed on Tuesday. That growth is still above the 5.1% growth seen in December 2021 and remains “well above” the pre-pandemic level of 2.5%, according to the report.
The share of households that made at least one large purchase in the previous four months dropped to 56.4% in December, lower than the 61.7% who reported major purchases in August and the 58.1% who did so in December 2021. When asked what they would do with an unexpected 10% bump in income, households said they expected to use a larger share of that money to pay down debt when compared to a year earlier. They also said they expected to allocate smaller portions of that additional income to spending, saving and investing.
Read more at Bloomberg
U.S. Retail Sales Fell 1.1% in December
Retail sales, a measure of purchases at stores, restaurants and online, declined a seasonally adjusted 1.1% in December from the prior month, the Commerce Department said Wednesday. That was the biggest monthly decline of 2022 and marked the second consecutive month of decline. November’s retail sales were revised lower to a 1% drop. Sales declined in electronics and clothing, at department stores and online. Dining out at bars and restaurants dropped 0.9% on the month. Sales of furniture and vehicles, which are sensitive to higher borrowing costs, both fell sharply.
Wednesday’s data follows signs that consumer demand is cooling in the face of high inflation and rising borrowing costs. Some retailers have said the recently completed holiday shopping season turned out to be weaker than expected. Macy’s Inc. warned of softer sales, and Lululemon Athletica Inc. said its profit margins were squeezed as shoppers bought more items on sale. Broadly, discounting became more commonplace.
U.S. COVID – Doctors Share How They’re Treating Long COVID Brain Fog
Doctors are still trying to understand brain fog, which some studies estimate may affect up to 70% of COVID patients, and experimenting with treatments that may improve symptoms for those dealing with it months out from their illness. Studies show those who have had COVID demonstrate measurable increases in brain fog compared to their counterparts—even if they didn’t notice it—but also that those symptoms cleared up around six to nine months later.
Theories on what causes the feeling of brain fog are still up for debate, and treatments vary widely. Dr. Raphael Kellman, an internist and functional medicine physician at Kellman Wellness Center in New York treats patients based on the idea that inflammation of the brain causes these symptoms. “Brain fog is a very prominent issue, recall, feeling out of it, and the number one issue is chronic inflammation,” Kellman says. “The immune system has just not shut off and it’s in a constant hyperinflammatory state.” Doctors at the University of Pittsburgh Medical Center have taken a different approach. They have instead focused on treating the symptoms in more than 500 patients with long-haul COVID.
Feds Probe COVID Unemployment Fraud in NY as GOP Accuses Dems of Systemic Failures, Coverup
Republican federal lawmakers are investigating the historic wave of COVID-19 pandemic fraud that struck New York, raising allegations of Democratic leadership failures and a potential political coverup. The requests for documents and data are focused on billions of dollars in unemployment insurance benefits lost to fraud. A state audit estimated $11 billion was lost to fraud, while state Labor Department officials asserted the true total is $4 billion.
Central to the federal probe is a dispute between DiNapoli’s office and state Labor Department Commissioner Roberta Reardon over the amount of fraud. New York labor officials were unable to provide auditors with documentation to support several of their claims of fraud prevention efforts, according to the state audit. Reardon also recently asserted on Capital Tonight that she could not release underlying data related to the $4 billion fraud estimate because it was protected information.
Biden, House GOP Refuse to Budge as Key Debt Ceiling Deadline Hits
The Biden administration and House Republicans are heading toward today’s debt ceiling deadline without even a hint of an endgame, ensuring a months-long standoff that’s poised to rattle financial markets amid worries about a recession this year. Treasury Secretary Janet Yellen said last week that the U.S. likely won’t run out of cash or exhaust those measures until at least early June. Until then, the department is suspending investments in certain government retirement funds and hoping the House GOP and Democrats can come to an agreement to keep the government from careening into an economic crisis with far-reaching consequences.
But Yellen’s warning to congressional leaders hasn’t spurred any movement toward even the beginning of a deal between Congress and the White House. The biggest legislative battle of the year is just beginning — and threatening to grow even messier than the 15-ballot speakership fight — and there’s no exit strategy in sight.
New Windsor Among 3 Amazon Facilities Cited by OSHA as Part of Ergonomics Enforcement Effort
On January 18, 2023, OSHA cited Amazon for failing to keep workers safe, and issued hazard alert letters after inspections at three warehouse facilities – in Deltona, Fla.; Waukegan, Ill.; and New Windsor, NY. This was done after the agency found workers were exposed to ergonomic hazards. Specifically, OSHA cited the company for violations of the general duty clause in the Occupational Safety and Health Act, which requires employers to provide safe workplaces.
The department’s actions follow referrals from the U.S. Attorney’s Office for the Southern District of New York, which led the agency to open inspections at Amazon warehouses in Deltona, Waukegan, and New Windsor on July 18, 2022. “Each of these inspections found work processes that were designed for speed but not safety, and they resulted in serious worker injuries,” said Assistant Secretary for Occupational Safety and Health Doug Parker, in a statement.
The Economy is Transforming Recruiting and Retention in 2023
The question of whether it’s better to invest people dollars in hiring new talent, or in keeping the current workforce from leaving, is certainly not a new challenge for HR leaders, experts say. But it is one that is getting a fresh look, given the ongoing uncertainties fueled by the economy, the pandemic and the tectonic shifts both are bringing to workforce trends around the world.
“As we enter a phase where a potential economic slowdown means organizations face hiring slowdowns and freezes—but still have to contend with the talent shortage in their existing workforce—organizations are going to have to rethink their approach to talent,” says Emily Rose McRae, senior director in the Gartner HR practice. Deciding whether the focus (and money) should be on recruitment or retention comes down to aligning the people strategy with the business strategy, says Peter Fasolo, CHRO of Johnson & Johnson.
U.S. Labor Strikes Went Up Almost 50% Between 2021 and 2022
The number of strikes in the United States rose almost 50% between 2021 and 2022, according to Cornell University’s School of Industrial and Labor Relations. That pickup in activity has momentum. In many industries, working conditions have worsened during the pandemic. Cathy Creighton at Cornell said workers are stressed. “And with labor shortages, that exacerbates the stress because you have to do more with a lot less people.”
Creighton, who used to be an attorney with the National Labor Relations Board, said going on strike can be risky. In some cases, employers are allowed to permanently replace striking workers. But businesses might think twice about doing that right now, given how hard it’s been to find workers in the first place. “If there’s nobody in line to take your job because there are just not enough people, that gives you incredible strength in striking,” Creighton said, adding that many striking workers have won big concessions recently.
How Employers Can Respond to the Rising Cost of Living
While there is no debating that the cost of living and inflation have caused life expenses to go up, it is unfortunately not the case in most circumstances that salaries have gone up to accommodate. Employees are paying more for groceries and homes, but also for important services like childcare, medical procedures, and behavioral therapy. Because of this, more employees are turning to their employers in hopes they may offer covered or subsidized services to help with such needs.
Where possible, some employers are offering one-off cost of living bonuses or are providing more frequent pay reviews (biannually instead of annually) to offer support with the increase in cost of living. Sequoia has also observed companies offering support with caregiving, care navigation and virtual care, and packaged therapy visits. In addition, some organizations are rolling out financial planning tools to help employ.
Emerson Goes Public With $7B Bid for National Instruments
The leaders of Emerson Electric Co. on Tuesday said they have offered to buy for more than $7 billion testing and measurement company National Instruments Corp., the board of which on Friday said it had started a review of its strategic options. On a conference call with analysts, Emerson President and CEO Lal Karsanbhai said NI’s testing businesses will be a good adjacent market for Emerson to grow into and that it also connects well to a number of Emerson's current end markets.
“NI determined to affirmatively initiate, announce and pursue a comprehensive strategic review process inclusive of other counterparties rather than negotiate exclusively with Emerson, which NI believes would be detrimental to shareholder interests,” a company statement read. “NI is focused on conducting its strategic review process in a manner that provides all interested parties with the opportunity to fairly participate on a level playing field.”
Labor Secretary Walsh at Davos: America Needs Immigrants to Make Up Worker Shortfall
A lack of workers is the biggest threat to the U.S. economy in the long term--and immigration and apprenticeships are key to addressing the shortfall, according to Labor Secretary Martin Walsh. "We need immigration reform in America," Mr. Walsh said during a panel session on the future of jobs at the World Economic Forum in Davos, Switzerland. "The threat to the American economy long-term is not inflation, it's [about] immigration," he said. "It's not having enough workers."
"America has always been a country that has depended on immigration," he said. "Right now we don't have good immigration policy." Mr. Walsh noted that students from around the world come to America to get educated, but risk being sent back home if they fail to secure a work visa. "There are jobs available right now in the U.S. that we don't have enough people for," he said. Immigration shouldn't be a hot-button political issue, whether in America or elsewhere in the world, he said.
Nearly a Quarter of Travelers Flying Out of China After ‘zero COVID’ Lift Were Positive for the Disease, New Report Reveals
Nearly 23% of the 565 passengers on four flights to airports in Rome and Milan from Dec. 26-29 were carrying the highly infectious disease, according to a study published last week in infectious disease journal Eurosurveillance. As many as 42% of passengers on one flight were infected. The study likely gives a good sense of the number of infected individuals on the flights, experts told Fortune.
Some passengers might have been too early in their infection to test positive. That number, however, is likely offset by others who tested positive but were too late in the course of their infection to be contagious. About 11% of travelers in the study were “highly likely to be infectious to others, but the remainder may not have been,” Dr. Jay Varma, chief medical adviser at the New York-based think tank Kroll Institute, tells Fortune, citing the study. Varma’s two-decade career with the U.S. Centers for Disease Control and Prevention included postings in China.
Governor Hochul Announces the Start of Innovative Microtunneling for Newburgh Sewer Project
Governor Kathy Hochul today announced the start of innovative microtunneling in the City of Newburgh as part of ongoing wastewater and stormwater infrastructure upgrades that are crucial to protecting the water quality of the Hudson River and increasing storm resiliency. Microtunneling allows for the precise alignment of the sewer over a long distance and avoids the disturbance of streets and residents that results from deep underground excavations.
The North Interceptor Improvement Project includes the installation of approximately 8,700 linear feet of new larger gravity sanitary sewer piping to increase system capacity and reduce pollution discharged to the Hudson River. This will be accomplished by diverting more flows to the city's treatment plant during wet weather flow events. Microtunneling will be used for a 2,000-foot-long portion of the new piping.