Member Briefing July 7, 2022
JOLTS: U.S. Job Openings Higher than Expected in May, Mfg Openings Fall by 136K
The number of job openings throughout the economy fell to 11.3 million at the end of May, according to Job Openings and Labor Turnover Survey, or JOLTS, data published Wednesday morning. That landed above the median estimate of 11 million openings from economists surveyed by Bloomberg. It also marks the second month in a row of declines. The report reveals little improvement in matching workers with jobs. The ratio of available workers to job openings held at 0.5, matching the all-time low first seen in March.
Openings fell the most at professional and business services firms, with such companies shedding 325,000 openings through May. Durable goods manufacturers followed with a decline of 138,000 openings to a total of 487,000, and nondurable goods manufacturers erased 70,000 openings to a total of 322,000 openings.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – CNN
- Blinken Plans ‘Candid Exchange’ With Chinese Counterpart on Ukraine War – Bloomberg
- UN Cites ‘Growing Evidence’ of War Crimes in Ukraine – CNBC
- Putin is Weaponizing Food to Win the War in Ukraine, Experts Warn – Business Insider
- NPR Hosts Share Their Experiences Covering the War in Ukraine – NPR
- Civilians Flee Frontline City as Russians Advance – BBC
- Ukraine War in Maps: Tracking the Russian Invasion – BBC
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Fed Minutes: ‘More Restrictive’ Rates Possible If Inflation Persists
A deteriorating inflation situation and concern about lost faith in the Federal Reserve’s power to make it better prompted U.S. central bank officials to rally around an outsized interest rate increase and a firm restatement of their intent to get prices under control, minutes of the June 14-15 policy meeting showed.
With families stressed by rising food and gas prices, and no evidence Fed actions to date had begun to arrest the fastest inflation surge in 40 years, “many participants judged that a significant risk … was that elevated inflation could become entrenched if the public began to question the resolve of the (Federal Open Market) Committee to adjust the stance of policy as warranted,” according to the minutes, which were released on Wednesday.
Consumers’ Inflation Psychology Is Stoking Anxiety at the Fed
Federal Reserve officials have indicated they accept the risks of causing a recession because they are determined to prevent something they view as worse: a change in consumer psychology that could sustain high inflation. “Is there a risk that we would go too far? Certainly there’s a risk, but I wouldn’t agree that’s the biggest risk to the economy,” Mr. Powell said at a central-banking forum in Portugal. “The biggest mistake to make…would be to fail to restore price stability.”
At the root of the approach is the fear that households and businesses will come to expect high inflation to persist, which can cause it to do so. That would require the Fed to increase rates more than otherwise to break that mind-set. Worries about inflation expectations were one reason Fed officials lifted their benchmark interest rate by 0.75 percentage point last month and have signaled they are likely to approve another such increase at their July 26-27 meeting.
U.S. COVID – Covid-19 Vaccine Doses, Once in High Demand, Now Thrown Away
Governments, drugmakers and vaccination sites are discarding tens of millions of unused Covid-19 vaccine doses amid sagging demand, a sharp reversal from the early days of the mass-vaccination campaign, when doses were scarce. Vaccine manufacturer Moderna Inc. recently discarded about 30 million doses of its Covid-19 shot after failing to find takers, while pharmacies and clinics have had to throw out unused doses from multi-dose vials from Moderna and Pfizer Inc. and its partner BioNTech SE that have a short shelf life once they are opened.
Demand may pick up in wealthy countries like the U.S. during the fall, when vaccine makers roll out modified shots that target Omicron subvariants and potentially provide better protection than current vaccines. Now, however, there are enough doses available to support vaccination of all adults and adolescents globally, according to Covax, an international program distributing vaccines to lower-income countries, led by the World Health Organization and other groups.
JAMA Study: COVID-19 Was the Third Leading Cause of Death from March 2020 to October 2021
In 2020, heart disease and cancer were the leading causes of death in the US, accounting for 1.29 million deaths, followed by COVID-19, accounting for 350 000 deaths.1-3 The pandemic may also have indirectly led to increases in other causes of death, including heart disease, diabetes, Alzheimer disease, and unintentional injuries.2,4 We examined the leading causes of death in the US, overall and in various age groups, from March 2020 to October 2021.
Deaths from cancer, heart disease, and COVID-19 accounted for the largest number of deaths in every group aged 55 years and older. Accidents accounted for the largest number of deaths in every age group 1 to 44 years.
UK PM Boris Johnson Resigns
prime Minister Boris Johnson has agreed to resign, his office said Thursday, ending an unprecedented political crisis over his future that has paralyzed Britain’s government. An official in Johnson’s Downing Street office confirmed the prime minister would announce his resignation later. Johnson had rebuffed calls by his Cabinet to step down in the wake of ethics scandals. He gave in after more than 40 ministers quit his government and told him to go.
It was not immediately clear whether Johnson would stay in office while the Conservative Party chooses a new leader, who will replace him as prime minister. Minutes before the news broke, Treasury chief Nadhim Zahawi called on Prime Minister Boris Johnson to resign just 36 hours after Johnson put him in the job, while another newly appointed Cabinet minister quit her post.
World’s COVID Vaccine, Drugs Equity Program Set to Wind Down this Fall
The program, known as the ACT-Accelerator, is a collaboration among the WHO, governments and global health organizations that works to ensure equitable access to COVID tools. It faced significant obstacles to get vaccines to low- and middle-income countries, but it eventually succeeded in shipping over one billion shots. As Covid cases have declined from the height of the pandemic, ACT-A has struggled to secure funding with only Germany, Norway, Sweden and Canada promising the requested financing this year.
The most well-known ACT-A initiative is the vaccines pillar COVAX, which aims to ensure shots are distributed around the world, particularly in countries that can’t afford them. An end to the current project raises questions about how the global health community, including the WHO, will continue to fund the fight against COVID.
Hochul Signs Three Climate-Related Measures Into Law
New York Gov. Kathy Hochul signed a bill into law Tuesday that will bolster the state’s building code when it comes to greenhouse-gas emissions and place tighter energy efficiency standards on new household appliances. The Advanced Building Codes, Appliances and Equipment Efficiency Standards Act was one of three climate-related measures approved by the governor, along with bills paving the way for utility companies to expand thermal energy and making more renewable energy construction projects subject to the prevailing wage.
The new building codes and appliances law is meant to cut down on energy use, both as a way to reduce emissions and cut down on energy costs for consumers. Among other things, the law requires the state Energy Research and Development Authority (NYSERDA) to come up with tougher water and energy efficiency standards for standard appliances – including everything from refrigerators to ice machines to clothes dryers to commercial fryers.
14 Hopeful Processors Apply to NY to Sell Recreational Marijuana
The state Office of Cannabis Management has received 14 applications in one week for people who want process cannabis flower, oils and products for New York’s first recreational marijuana sales expected late this fall. Farmers and entrepreneurs who want to prepare, manufacture and package cannabis products for sale started to file applications on June 28 for a Adult-Use Conditional Processor License. The state’s emerging cannabis industry is on track to license up to 150 dispensaries through early 2023.
The new state department has received the applications across 10 counties, including two each in Ontario, Albany, Erie and Monroe counties and one in Schenectady, Cortland, Tompkins, Onondaga, Yates and Orange counties, according to OCM on Tuesday. Conditional Adult-Use Retail Dispensary applications will open later this summer at an undetermined date.
Economists Estimate Hiring Demand Remained Strong as Summer Started
Demand for workers remained robust early in the summer, according to private-sector estimates, as the labor market remained tight alongside signs of slowing economic growth. Jobs site ZipRecruiter estimates that employers had slightly more than 11.3 million job openings through mid-June. Similarly, Bayard Advertising, a job-advertisement firm, thinks there were 10.9 million openings through mid-June based on job postings and active advertisements.
“We have seen a little bit of softening in certain industries, but the overall job market remains remarkably strong,” said Julia Pollak, chief economist at ZipRecruiter. Ms. Pollak said the industries that have been pulling back on hiring, such as technology and real estate, have been doing so mostly because of rising interest rates and stock-market turbulence.
Manufacturers Can’t Find Workers. Where’d They Go?
Theories have been easy to come by—data, less so. Which is why I was so enthusiastic about Bethia Burke’s project. President at the nonprofit Fund for Our Economic Future, her team recently set out to understand why 4 million people are quitting their jobs every month. From the survey of 5,000 working-age Ohioans, there is much manufacturers can learn to get a leg up in the uber-competitive fight for talent.
As much as anything, the pandemic gave people time with their thoughts—time, Burke says, that many spent reflecting on the briefness of life, how they’d like to spend it, and whether their current career path aligns with their personal and professional goals. “I have never had the chance to pause and reflect about what work and what life was,” respondents told Burke. Those moments of reflection have shown up in how people are making choices.
China’s BYD Surpasses Tesla in Global EV Sales
BYD, the Chinese electric vehicle firm partly owned by Warren Buffett’s Berkshire Hathaway, became the world’s largest electric vehicle maker in the first half of 2022, wrestling the title from Elon Musk’s EV giant Tesla in another sign of the Chinese automaker’s resilience in the face of COVID-inflicted disruptions that plagued its rivals this year. However, the companies’ sales don’t represent an apples-to-apples comparison. Many of BYD’s car sales are plug-in hybrids and use gasoline engines to supplement battery power. Tesla, on the other hand, exclusively sells fully electric cars. China counts both types of vehicles as “zero-emission.”
BYD sold 641,350 new electric vehicles in the first half of this year, compared to Tesla’s 564,743, company filings show. Sales at BYD are also growing at a faster pace than at its American counterpart. In the first six months of 2022, BYD sold 486,771 more cars than it did in the first half of 2021, representing an increase of 315%. Tesla, meanwhile, sold 178,693 more vehicles in the first half of this year compared to last, a 46% year-on-year bump.
France to Nationalize Energy Giant EDF to Help It Combat Europe’s Energy Crisis
The French government said it plans to nationalize utility company EDF saying the step is necessary to manage the transition away from fossil fuels at a time of energy crisis in Europe. The power company, which is already 84% controlled by the state, has been absorbing billions of euros in losses since President Emmanuel Macron imposed a cap on electricity prices, forcing EDF to buy supplies at higher market prices without passing the cost on to consumers. Those losses have become heavier as Russia has cut the flow of natural gas to Europe, triggering a surge in gas and power prices.
EDF also lies at the center of Mr. Macron’s ambitious plans to develop France’s nuclear fleet as a way of cutting emissions to fight climate change.
City and State Officials Direct Billions Toward Child Care
More than $340 million in federal funding is being made available to provide direct support for child care providers in New York under a second wave of grants to help stabilize the industry and its workforce, Gov. Kathy Hochul on Tuesday announced.
The money is meant to aid providers who are licensed with the Office of Children and Family Services or have registered child care programs, New York City-permitted group day care organizations or enrolled legally exempt group child care programs.
US Factory Boom Heats Up as CEOs Yank Production Out of China
Rattled by the most recent wave of strict Covid lockdowns in China, the long-time manufacturing hub of choice for multinationals, CEOs have been highlighting plans to relocate production — using the buzzwords onshoring, reshoring or nearshoring — at a greater clip this year than they even did in the first six months of the pandemic, according to a review of earnings call and conference presentations transcribed by Bloomberg.
The construction of new manufacturing facilities in the US has soared 116% over the past year, dwarfing the 10% gain on all building projects combined, according to Dodge Construction Network. There are massive chip factories going up in Phoenix: Intel is building two just outside the city; Taiwan Semiconductor Manufacturing is constructing one in it. And aluminum and steel plants that are being erected all across the south.