Member Briefing July 19, 2022
NY DOL Assessing Surcharge on SUI Wages
As a result of COVID-19, the New York Department of Labor (DOL) paid more than $110 billion in unemployment and pandemic unemployment benefits between March 2020 and September 2021 depleting the Unemployment Insurance (UI) Trust Fund. New York state borrowed $9.2 billion from the federal government to maintain UI and pandemic benefits while the COVID-19 programs were in effect. State law requires employers to pay an annual Interest Assessment Surcharge (IAS) on the federal loan and In July, you will receive an IAS notice.
- The rate is 0.23% of SUI wages.
- The calculation is on SUI from the fourth quarter 2020 through the third quarter of 2021. These are SUI wages from October 1, 2020, to September 30, 2021.
- The agency estimates the amounts to be approximately $27.60 per employee.
- This will be an annual payment until all interest on the federal loan has been paid off, unless the federal government abates any of the interest due on the loan.
- The payment due date is September 30, 2022.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – The Guardian
- Russia Orders Troops to Target Ukraine’s Western-Supplied Long-Range Weapons – WSJ
- Force Majeure – Russia’s Gazprom Tells Europe Gas Halt Beyond its Control – Reuters
- Russian Journalist Who Staged TV Protest Over Ukraine Invasion Briefly Detained – The Guardian
- I Once Supported Putin. Now I Know the Truth. – Politico
- G20 Finance Meetings in Bali Overshadowed by War in Ukraine – AP
- Is America Growing Weary of the Long War in Ukraine? – The Economist
- In Scramble to Give Up Russian Gas, Europe Strikes Energy Deals Elsewhere – WSJ
- Ukrainian Spy Chief’s Dismissal Renews Questions Over Russian Infiltration – The Guardian
- Ukraine’s First Lady to Address U.S. Congress on Wednesday – Reuters
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
The J.P. Morgan Global Manufacturing PMI Falls to its Lowest Reading Since August 2020.
The J.P. Morgan Global Manufacturing PMI inched down from 52.3 in May to 52.2 in June, the lowest reading since August 2020. Manufacturers continued to grapple with supply chain, inflationary, workforce and geopolitical challenges. The underlying data were mixed. On the one hand, output (up from 49.6 to 52.5) rebounded after contracting in both April and May, and exports (up from 47.9 to 49.5) stabilized somewhat, despite declining for five of the past six months. On the other hand, growth in new orders (down from 50.9 to 50.1) stalled, and employment (down from 51.6 to 51.4) and future output (down from 60.7 to 59.3) measures eased. It was the lowest reading for expected production in two years.
Although the index for delivery times (up from 38.8 to 42.3) continued to reflect long wait times related to supply chain bottlenecks and raw material challenges, it improved to the best reading since November 2020. At the same time, input prices (down from 70.3 to 68.6) and output prices (down from 61.5 to 60.5) decelerated in June, although they remained elevated.
Fed Officials Mull 100 Basis Point Increase After Big Inflation Numbers Last Week
Federal Reserve officials have signaled they are likely to raise interest rates by 0.75 percentage point later this month, for the second straight meeting, as part of an aggressive effort to combat high inflation. They also left the door open to a larger, full-percentage-point increase at the July 26-27 gathering. Some officials pointed to signs that economic activity was softening as they raise rates at a historically brisk pace. “You don’t want to overdo the rate increases. A 75-basis-point hike, folks, is huge,” Fed governor Christopher Waller said Thursday at a conference in Victor, Idaho. “Don’t say, ‘Because you’re not going 100, you’re not doing your job.’”
Before last week, officials had signaled they were leaning toward a 0.75-point, or 75-basis-point, increase this month. After another scorching inflation report was released Wednesday, however, they indicated they would consider a full-point increase.
U.S. COVID – Covid Rises Across U.S. Amid Muted Warnings and Murky Data
Covid-19 is surging around the United States again in what experts consider the most transmissible variant of the pandemic yet. But something is different this time: The public health authorities are holding back.
More than two years after the pandemic began public health officials are sounding only quiet warnings amid a picture that they hope has been changed by vaccines, treatments and rising immunity. Deaths are rising, but only modestly so far in this new wave. And state and local public health officials say they also must now factor in a reality that is obvious along the streets from Seattle to New York City: Most Americans are meeting a new Covid wave with a collective shrug, shunning masks, joining crowds indoors and moving on from the endless barrage of virus warnings of months past.
Anthony Fauci to Retire by End of U.S. President Biden’s Term
Dr Anthony Fauci, an infectious disease expert who is the chief medical adviser to U.S. President Joe Biden, will retire by the end of Biden’s term, he told Politico in an interview on Monday. Fauci, 81, has been the director of the National Institute of Allergy and Infectious Diseases (NIAID) since 1984 and became the face of the U.S. government’s efforts to contain the COVID-19 pandemic.
Notably, when asked what he wants his legacy to be, it’s not the coronavirus response. Fauci points to the virus that originally led him into infectious disease research and the NIAID director role in 1984, HIV/AIDS. That work, he is quick to point out, always had bipartisan backing. In the decades since Fauci began work on HIV/AIDS, treating and preventing the virus has transformed. People live for years with HIV or can prevent transmission with daily pills and now, injections every few months. But an HIV vaccine remains elusive and, Fauci says, likely many years away.
Yellen Says U.S. Aims to Move Ahead with Global Minimum Corporate Tax – Manchin Balks
The United States will look for every opportunity to move ahead and enact a global minimum corporate tax agreement despite the opposition of a key Democratic senator, Joe Manchin, to raising corporate taxes, U.S. Treasury Secretary Janet Yellen said.
Manchin, who holds the pivotal vote in the evenly divided Senate, this week said he would not support a Democratic proposal for new climate change spending and higher taxes for corporations and wealthier Americans. His opposition could imperil passage of legislation that would commit the United States to a 15% global minimum corporate tax, a key part of an agreement that Yellen helped negotiate with nearly 140 countries last year.
U.S. Manufacturers Strategize to Take On Inflation, Labor Shortages
Manufacturers surveyed in Umpqua Bank’s “2022 Business Barometer” cited inflation as the number-one economic concern, with 59 percent ranking it as a top challenge, while about six in 10 surveyed companies were also having difficulty finding qualified employees and 59 percent indicated that navigating supply chain issues was the most important area of their business to address for success in the coming year.
To address these challenges, manufacturers are most likely to make significant changes to their products and services and pricing models in the next year, as well as invest in digitization to become more efficient, the study revealed. Compared to other sectors, manufacturers are more focused on finding new suppliers or strengthening relationships with current suppliers and implementing new inventory management techniques to address ongoing supply chain disruption. Manufacturers are also likely to allow more remote work options, increase pay and benefits and adopt creative ways to support working parents, as attracting and retaining workforce talent poses increasing challenges to growth.
IBM Second-Quarter Earnings Advance on 9% Sales Growth, Warns on Forex and Russia
International Business Machines Corp. reported 9% sales growth in second-quarter results that also reflected some of the wider concerns tech investors confront as the sector kicks off its earnings season. Earnings per share in the second quarter rose almost 80% from the year-ago period to $1.61 a share.
IBM on Monday said revenue for the April through June period reached $15.5 billion after Chief Executive Arvind Krishna vowed to reinject growth into the business. As part of that plan, IBM spun off some of its declining operations last year. But the company also exited profitable operations in Russia after Western governments imposed sanctions on Moscow for its invasion of Ukraine, IBM Chief Financial Officer Jim Kavanaugh said Monday. The strength of the dollar also affected its results, he added. IBM shares fell more than 4% in after-hours trading.
Stop Giving Gen Z So Much Credit for Shaking up the Workplace. Gen X Started it 30 Years Ago
Gen Z is a puzzle everyone’s trying to figure out at work. They want it all: Purpose! Work-life balance! Flexibility! And if they don’t get it, they’ll leave the door swinging on their way out. If that narrative sounds a little tired, it’s likely because you first heard it when millennials entered the workforce 15 years ago.
Gen Z’s attitudes about work are the result of both generational identity and life stage. Yes, the pandemic accelerated desires past generations set into motion and emboldened Gen Z to speak up about them. But still, these are idealistic 20-somethings who have stars in their eyes, who are also eclipsed by economic crises. Millennials have trod this ground before. And some even argue that this workplace idealism began with Gen X 30 years ago.
NY Fed Survey: Region’s Service Sector Declined in Early July
Activity declined in the region’s service sector, according to firms responding to the Federal Reserve Bank of New York’s July 2022 Business Leaders Survey. The survey’s headline business activity index fell thirteen points to -10.7, its first negative reading in over a year. The business climate index was little changed at -34.3, indicating that firms generally viewed the business climate as worse than normal for this time of year.
Employment growth slowed, and wage increases remained widespread. While still elevated, the prices paid and prices received indexes moved notably lower, pointing to a deceleration in price increases. Looking ahead, firms no longer expect activity to increase over the next six months, and they remained pessimistic about the expected future business climate.
Airbus Forecasts Steady Growth in Commercial Aviation
Airbus has issued a 20-year forecast for the global commercial aerospace market (2022-2041), highlighted by the projection that air-traffic volumes will return to pre-pandemic (2019) levels between 2023 and 2025. That development would be followed by a growth in commercial aircraft passenger traffic at a 3.6% consolidated annual growth rate through 2041.
In numerical terms, Airbus projects that demand total of 39,500 new passenger aircraft will be delivered between 2022 and 2041. Of these, more than 2,400 will be new or converted cargo jets. Air-freight volumes will take a similar growth rate achieving a 3.2% CAGR through 2041. The 20-year outlook anticipates about 80% of these new aircraft will be narrow-body jets and about 20% will be wide-body models.
Farnborough Airshow to Focus on Cleaner Flying and Potential Fighter Jet Deal
Low-emission air travel and a potential deal for Japan to help build the UK’s next-generation Tempest fighter jet are set to take centre stage at the annual Farnborough airshow this week. Analysts expect hundreds of orders for new Airbus and Boeing planes during the show as airline passenger numbers bounce back, but manufacturers have emphasised efforts to reduce planes’ environmental impact, even as they expect a resurgence in sales of commercial jets using fossil fuels.
Executives from global aerospace manufacturers and airlines will gather at the airport in Hampshire after a four-year gap. The show, which begins on Monday, normally happens every two years but was cancelled in 2020 because of the coronavirus pandemic, as the aviation industry faced potential collapse.
Moody’s Economist Mark Zandi Warns Recession Could Be a Self-Fulfilling Prophecy for the U.S.
Mark Zandi, who has been an economist for more than three decades, says he’s never seen so many people convinced that a recession is imminent. And while he believes the U.S. economy can still avoid such an economic downturn, sentiment is so poor that it poses its own risk—a sort of self-fulfilling recession prophecy.
Zandi, the chief economist at Moody’s Analytics, joined the “What Goes Up” podcast to discuss his outlook after government data this week showed the highest level of inflation in almost 41 years.