Member Briefing July 26, 2022
Dems Make Another Push to Pass their Agenda Before August Recess
Congress nears the close of a packed legislative session this week, aiming to pass legislation providing about $54 billion to boost U.S. semiconductor manufacturing while also juggling a raft of other bills ahead of the monthlong August recess. The priority for both Republican and Democratic leaders is passing the long-stalled semiconductor package.
Along with the bipartisan bill subsidizing chips, Democrats are hoping to salvage a piece of President Biden’s once-ambitious domestic agenda, looking to advance a measure aimed at lowering some drug and healthcare costs. The party is also weighing whether to hold votes related to social issues and guns that could help rally the party’s base. In the Senate, Democrats are awaiting guidance from the Senate’s parliamentarian over whether a measure aimed at lowering drug costs by giving Medicare the right to negotiate prices for a narrow set of drugs will comport with the Senate’s procedures for passing bills through a budget-related process known as reconciliation.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – The Guardian
- Ukraine’s Neighbor Worried About Russian Invasion – Politico
- The Ukrainian Fighters Standing in Russia’s Way on Eastern Front – Reuters
- Russia Strikes School, Civilian Buildings as It Presses Ukraine Bombardment – WSJ
- Moscow Claims Odesa Strikes Hit Military Targets – Politico
- Grain Prices Shoot Back Up After Russian Missile Attack – The Hill
- Germany Bails Out Uniper, Vowing ‘Whatever it Takes’ to Avert Energy Crisis – Politico
- Russia to Cut Europe’s Gas Flow via Nord Stream to 20% – WSJ
- How Heavy are Russian Casualties in Ukraine? – The Economist
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Fed Meeting – Confusing and Contradictory Data Challenge Rate Decision Makers
Federal Reserve chief Jerome Powell has vowed to follow the data in deciding how high to crank up interest rates to crush the worst inflation surge in four decades. But Powell and other Fed policymakers are making that crucial decision based on data that lately has been so confusing and contradictory that it’s hard for them to know where the economy actually stands.
That uncertainty heightens the risk that they’ll either do too much — triggering a severe recession — or too little, prolonging red-hot inflation and making it harder to conquer.
Economic growth is projected by some analysts to have been negative in the second quarter of the year, but hiring is strong and the jobless rate sits near historic lows. Consumers say they’re unhappy about the economy but are still spending even amid the aggressive price spikes. Supply chains are improving, but manufacturing output is slowing. And Covid cases are skyrocketing again even as America fully reopens for business.
There Are Signs Inflation May Have Peaked, but Can It Come Down Fast Enough?
Ed Hyman, chairman of Evercore ISI, pointed to many indicators that 9.1% might have been the top. Gasoline prices have fallen around 10% from their mid-June high. Wheat futures prices have fallen by 37% since mid-May and corn futures prices are down 27% from mid-June. The cost of shipping goods from East Asia to the U.S. West Coast is 11.4% lower than a month ago. Easing price pressures and improvements in backlogs and supplier delivery times in business surveys suggest that supply-chain snarls are unraveling.
Money-supply growth has slowed sharply, evidence that monetary tightening is starting to bite. Inflation expectations also fell recently—an upbeat signal for the Fed, which believes that such expectations influence wage and price-setting behavior and thus actual inflation.
U.S. COVID – Scientists Are Narrowing in on Why Some People Keep Avoiding COVID
A majority of people in the U.S have had Covid-19 at least once — likely more than 70% of the country. Many have been infected multiple times. In a study that has not been peer viewed that looked at 257,000 U.S. veterans who’d contracted COVID at least once, 12% had a reinfection by April and about 1% had been infected three times or more. This raises an obvious question: What is keeping that shrinking minority of people from getting sick?
Disease experts are homing in on a few predictive factors beyond individual behavior, including genetics, T cell immunity and the effects of inflammatory conditions like allergies and asthma. But even as experts learn more about the reasons people may be better equipped to avoid COVID, they caution that some of these defenses may not hold up against the latest version of omicron, BA.5, which is remarkably good at spreading and evading vaccine protection.
Covid-19 Lab Companies Retrench as Rapid Tests Take Over
U.S. laboratories currently have the capacity to process the results of about 62 million PCR tests for Covid-19 a month, which is half of what it was in March, researchers at the consulting firm Health Catalysts Group estimate, after demand dropped and government funding diminished. Some laboratories and diagnostic companies have laid off employees or reassigned them to other tasks.
Many people have embraced rapid, antigen tests to check whether they are shedding the virus before work, travel or socializing. Rapid tests, however, are less sensitive, and results rarely reach health officials, unlike PCR test results that laboratories report to authorities tracking the pandemic. That is giving officials a dimmer view into a wave driven by the BA. 5 subvariant of Omicron. The 120,000 cases being reported daily on average in the U.S. are likely to be a significant undercount partly because rapid tests aren’t reflected in that data, public-health experts said, and signals in wastewater suggest wider infection.
New York’ 19th Congressional District Special Election Draws National Spotlight
The victor in New York’s 19th Congressional District will win just four months in office, filling the seat Democrat Antonio Delgado vacated when he became New York’s lieutenant governor. But the Aug. 23 contest — the first battleground House election since the Supreme Court overturned Roe v. Wade — could prove far more consequential, giving the clearest indication yet of whether abortion, or the economy will be the issue that decides control of Congress.
The candidates agree on one thing: Their upstate New York special election is a key midterm bellwether that will demonstrate just how energized the electorate is about the nation’s single most critical issue. They just don’t agree on what that issue is. Republican Marc Molinaro, the executive in Dutchess County, is focused on the economy and taming inflation. And Democrat Pat Ryan, the executive in Ulster County, says he’ll preserve abortion rights.
Walmart Cuts Profit Outlook
Walmart on Monday cut its quarterly and full-year profit guidance, saying inflation is causing shoppers to spend more on necessities such as food and less on items like clothing and electronics. That shift in spending has left more items on store shelves and warehouses — forcing the big-box retailer to aggressively mark down items that customers don’t want.
Walmart, which is the biggest grocer in the U.S. and often considered a bellwether for the overall economy, said more customers are turning to its stores, which are known for low prices, to fill their pantries and fridges. But they are skipping over general merchandise that they can live without.The company’s stock fell in after-hours trading following the announcement. Shares of other retailers, including Target and e-commerce giant Amazon, also fell.
A West Coast Port Worker Union is Fighting Robots. The Stakes for the Supply Chain are High
There are near 1,000 container ports in the world, yet last year, according to a report by the International Transport Forum, only around 53 were automated, representing 4% of the total global container terminal capacity and the argument about the economic efficiency of automating port work is a key one in the current labor union contract dispute between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA).
the International Longshore and Warehouse Union (ILWU) represents more than 22,000 longshoremen in 29 ports and terminals up and down the West Coast. Since early May, the ILWU has been deadlocked in contract negotiations with the Pacific Maritime Association (PMA), which represents 70 shipping companies and port and terminal operators. Typical of labor negotiations, wages are an issue, though ILWU members are among the best-paid union workers in the country, averaging $195,000 a year plus benefits, according to the PMA. More contentious is the matter of automation of container-handling machinery, an emerging trend at ports and terminals throughout the world.
Making Smart Warehouse Robots Smarter
Researchers from the Rochester Institute of Technology (RIT) are working to develop smarter industrial robots that are designed to be aware of whether or not they have the right of way in busy aisles and can intelligently avoid obstacles, people and other robots. The system integrates smart technologies like LiDAR sensors, and uses artificial intelligence and neural networks to achieve a clearer view of personal space so that robots can behave safely in a decentralised way.
With supply chain challenges brought on by the pandemic and increased demands for e-commerce, technology can provide the support businesses need to improve productivity, efficiency and safety in a warehouse setting.
Aerospace Companies of All Sizes Hurt by Supply Chain
The global air industry is in the midst of a post-pandemic rebound, but supply chain problems have left suppliers and manufacturers scrambling to source everything from raw materials to small electronic components to keep production moving. From multinationals to family-run suppliers, few have been spared the impact of shortages or delays.
We are keeping our head above water, keeping the flow happening, but the gymnastics required to make that happen are as difficult now as they have ever been,” Stephen Timm, president of industry giant Collins Aerospace, told Reuters. At the other end of the spectrum, where suppliers lack the clout of a Collins things are even more uncertain. “At the moment it’s extremely challenging because of the lack of raw materials,” said Paul Wingfield, business development manager at Stokenchurch, England-based Aircraft Materials, which supplies alloys for the industry.
Hyundai Subsidiary Has Used Child Labor at Alabama Factory
A subsidiary of Hyundai Motor Co has used child labor at a plant that supplies parts for the Korean carmaker’s assembly line in nearby Montgomery, Alabama, according to area police, the family of three underage workers, and eight former and current employees of the factory. Underage workers, in some cases as young as 12, have recently worked at a metal stamping plant operated by SMART Alabama LLC, these people said.
Reuters learned of underage workers at the Hyundai-owned supplier following the brief disappearance in February of a Guatemalan migrant child from her family’s home in Alabama. The girl, who turns 14 this month, and her two brothers, aged 12 and 15, all worked at the plant earlier this year and weren’t going to school, according to people familiar with their employment. Their father, Pedro Tzi, confirmed these people’s account in an interview with Reuters.
London Narrowly Avoided Blackout as Electricity Prices Surged Last Week
Britain paid the highest price on record for electricity in London last week as the capital narrowly avoided a power blackout, it has emerged. National Grid’s Electricity System Operator (ESO) was forced to pay £9,724.54 ($ 11748.32) per megawatt hour to Belgium, more than 5,000% higher than the typical price, last Wednesday to prevent a blackout in south-east London, as first reported by Bloomberg.
Increased demand for energy across Europe combined with a bottleneck in the grid forced the ESO to buy electricity from Belgium at the highest price Britain has ever paid to keep power flowing.Other factors, including planned maintenance outages of overhead lines and a storm in Belgium impacting solar power, put the system under severe strain.While the amount bought at the record amount was minimal – reportedly enough to supply eight houses for a year – it has exposed the UK’s reliance on importing electricity from interconnectors overseas, particularly France, Belgium and the Netherlands.
Nuclear Fusion Energy Reactor Breakthrough Set To Help Stabilize Plasma
Scientists at a U.S. government plasma lab have discovered a missing component in nuclear fusion equations that could speed up development of a working reactor. Specifically, the discovery could improve the design of the donut-shaped fusion reactors known as tokamaks. Tokamaks work by creating a material known as plasma, in which an element—usually hydrogen—is heated so much that it becomes an electrically-charged soup of electrons and atomic nuclei. Powerful magnets then contain this plasma into a safe, stable flow, creating conditions where fusion should be possible.
Nuclear fusion is the process of joining two atomic nuclei together in order to form a single, larger nucleus whilst releasing energy in the process. It’s the same process that powers our sun, where hydrogen atoms are fused together to form helium. Earlier this month, a report found private investment in fusion companies had skyrocketed.