Member Briefing July 9, 2024
NFIB: Small Businesses Continue to Struggle to Find Qualified Workers
NFIB’s June jobs report found solid employment hiring plans among small business owners, but overall unsuccessful attempts to hire additional workers. A seasonally adjusted 37% of all small business owners reported job openings they could not fill in their current period, down five points from May. “This summer, small business owners continue to try to hire and find qualified employees for their open positions,” said NFIB Chief Economist Bill Dunkelberg. “The number of small businesses with one or more job openings they can’t fill remains at exceptionally high levels. However, owners are raising compensation at historically high levels to attract and retain employees.”
Overall, 60% of owners reported hiring or trying to hire in June.
Of those hiring or trying to hire, 85% reported few or no qualified applicants for the positions they were trying to fill.
Seasonally adjusted, a net 38% reported raising compensation, up one point from May and historically very high.
A net 22% (seasonally adjusted) plan to raise compensation in the next three months, up four points from May.
Job openings were the highest in the construction, transportation, and retail sectors, and the lowest in the agriculture and finance sectors.
Bank Earnings, Inflation, Powell Testimony: What to Watch This Week
This week, earnings are due from some big-name banks, including JPMorgan and Citigroup. Pending economic data include gauges of both consumer and producer inflation. Plus, Federal Reserve Chair Jerome Powell will testify on monetary policy. Powell will testify before the Senate and the House on Tuesday and Wednesday, respectively, with the bulk of his testimony expected to focus on monetary policy.
Powell had signaled last week that while the Fed had made some progress towards bringing down inflation, policymakers still did not have enough confidence to begin trimming rates. The minutes of the Fed’s June meeting furthered this notion. Weaker-than-expected labor data from last week ramped up hopes that the jobs market was cooling, giving the Fed more impetus to begin cutting interest rates. But inflation is likely to be the central bank’s key point of consideration in reducing interest rates. The consumer price index is due on Thursday, and is expected to rise 0.1% m/m and 3.1% y/y. The core CPI is expected to increase by 0.2%.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Iran's President-Elect Masoud Pezeshkian to be Sworn in Next Month - VOA
- Netanyahu Sets Red Lines Ahead of Doha Summit with Burns on Hostage Deal – Jerusalem Post
- Satellite Photos Show Iran Expanding Missile Production, Sources Say – Reuters
- Thousands of Palestinians Flee Amid Heavy Israeli Attack on Gaza City - The Guardian
- Israel Orders Residents to Evacuate as Tanks Storm Gaza City Districts – Reuters
- Israeli Troops Return to Gaza City Months After Leaving - WSJ
- Iran's Newest Navy Warship Sinks in 'Accident' - Newsweek
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- Russian Missile Attack Kills 29, Hits Children's Hospital, Ukraine Says – Reuters
- NATO Ally Scrambles Fighter Jets Amid Russia's Deadliest Attack of 2024 - Newsweek
- Kremlin Mopes Over French Election Results – Politico
- Hungary's Orban Unexpectedly Visits China, Backs Xi's Peace Plan – Reuters
- NATO Chief: Quickest Way to End Ukraine War is to Lose it; But Won’t Bring Peace - VOA
- Russia Is Running Low On Tanks. So Why Are A Thousand First-Generation T-72s Still Sitting In Storage? - Forbes
- Satellite Images Show Russian Ammo Depot Damage After Chain of Detonations – Newsweek
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Other Headlines
- France's Far-Right Suffers Blow in Election – Newsweek
- France Faces Coalition Puzzle After Left-Wing Surge in Election – Reuters
- The Magnificent Mind of Emmanuel Macron – Politico
- China Threat Pushes U.S. Allies Into Historic Defense Pact - Newsweek
- India’s Modi to Meet Putin in Moscow as Both Sides Seek to Forge Deeper Ties- CNBC
- Beryl Kills 2 in Houston Area and Knocks Out Power to 2.6 Million Customers - NPR
- 6 Things UK Prime Minister Keir Starmer Wants to Fix in His First Month – Politico
- Japan Says Keen to Deepen Security Ties With Philippines, US, Australia – Reuters
- Milei’s Shock Therapy Sends Demand for Beef to 110-Year Low in Argentina - Bloomberg
Policy and Politics
The Noncompete Clause Moves Deeper Into Limbo
Employers face a summer of uncertainty about the legality of noncompete agreements. A federal judge last week backed a challenge to a nationwide ban on the pacts, which restrict workers’ ability to join rival firms. The ruling came days after the Supreme Court gave judges more latitude to challenge federal agencies’ rule-making authority. The judge, Ada Brown, said the plaintiffs in a lawsuit challenging the ban are likely to prevail in a final ruling based on their argument that the FTC lacks statutory authority to promulgate the ban, and that the rule is overly broad because it “imposes a one-size-fits-all approach with no end date.”
But her injunction last week applies only to the plaintiffs in the case—a tax-services firm based in Dallas, along with the U.S. Chamber of Commerce and a few other business groups—and it is likely to have little effect on them. Another complicating factor: A Biden-appointed judge in Pennsylvania will rule by July 23 on a request for an injunction in a separate lawsuit, brought by a tree-trimming business in Pennsylvania. That decision, along with the final rulings in both cases, could set the stage for a legal knot that might take years to resolve, employment lawyers say.
Upstate MTA Vendors Concerned About Impact of Congestion Pricing Pause
Leaders of upstate manufacturing companies under contract with the Metropolitan Transportation Authority (MTA) for its capital projects said Wednesday they're concerned Gov. Kathy Hochul's decision to pause congestion pricing in New York City will have a negative economic effect on the rest of the state. The new tolls would have partly funded the MTA's $51.5 billion capital plan, but the pause created a $15 billion funding gap for the authority — halting several subway, railroad and other upgrades in their tracks.
The MTA has spent over $2.2 million in the last decade for contracts with Transit Air System LLC, a manufacturing company in Steuben County. Transit Air CEO Dhruv Sharma said the company has supplied components for various Long Island Railroad and Metro-North Railroad projects, like rail car upgrades, in the last 30 years. But the company is stopping all work and investments in new equipment to complete planned LIRR improvements to be funded through congestion pricing because of its suspension. The MTA contracts much of its capital project work to outside private vendors — including several in Central and Western New York and other parts of the state. About $12 billion of the authority's $15 billion gap goes to private companies, while roughly $3 billion goes to MTA workers who do track repairs, Fauss said.
Read more at NY State of Politics
Gallup Survey: Americans Split Over Confidence in Higher Education
Americans are almost equally divided over their confidence in higher education, with an increasing number of individuals expressing reduced trust in postsecondary education, according to a recent Gallup survey. The poll, released Monday, found 36 percent of Americans have a great deal or quite a lot of confidence in higher education, while 32 percent said they have some confidence and 32 percent expressed little to no confidence.
The latest findings mark a significant drop in faith from when Gallup first measured confidence in 2015, when 57 percent had a great deal or quite a lot of confidence and only 10 percent had little or none. Confidence dropped among various subgroups, especially among Republicans, Gallup noted. Twenty percent of Republicans said they are confident, while 50 percent have little or no confidence. The results are nearly the opposite of 2015, when 56 percent of Republicans had a great deal of confidence and 11 percent had little to none. Democrats also showed reduced confidence, with 56 percent saying they have trust in higher education, down from 68 percent in 2015, Gallup found.
Health and Wellness
Mini-Strokes, Gut Problems: Scientists See Links to an Old Bout of Covid
The link between new health problems and your past health history appears to be particularly prevalent with Covid. A new Nature Medicine study found that health problems stemming from even mild Covid infections can emerge as many as three years afterward. The study found a greater risk three years later of problems in the gut, brain and lungs, including irritable bowel syndrome, mini-strokes and pulmonary scarring. The science is still emerging. It’s hard to know for sure whether an old illness is causing your new problem, so for now there are no hard and fast guidelines for patients.
This is different from what most people think of as “long Covid,” the debilitating chronic condition that can include fatigue, brain fog and racing heartbeat. Instead, the latest study has found an increased risk of new health conditions—things you probably wouldn’t think of as related to a prior illness—developing years later. This connection extends to other illnesses, too, doctors say. “Infections may be setting up things down the road that we’re not aware of,” says Dr. Monica Verduzco-Gutierrez, professor and chair of the department of rehabilitation medicine at the University of Texas Health Science Center at San Antonio and director of its Covid recovery clinic.
Election 2024
- 4 More House Democrats Say Biden Should Drop Out: Here’s Who Has Called For Biden To End Campaign - Forbes
- Biden Rejects Democratic Lawmaker Calls to Step Down – The Hill
- 25th Amendment Talk Grows To Replace Biden As President Digs In His Heels - Forbes
- Democrat Pollster Calls On Biden To Resign Now After ‘Incoherent’ Stephanopoulos Interview – The Hill
- How J.D. Vance Rocketed Onto Trump’s VP Shortlist - WSJ
- Republican Party Lays Out its 2024 Policy Platform - NPR
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
Bicycles Used to be Made in the U.S.A.—a New Bill Aims to Bring Them Back
After half a century in Congress, Representative Earl Blumenauer (D-Oregon) has announced he’s retiring at the end of 2024. A cycling enthusiast known for his advocacy on everything from public transportation to cannabis legalization, Blumenauer isn’t leaving the halls of Congress without a final fight. Last month, he introduced legislation that would reinvigorate bicycle manufacturing in the U.S.
In March 1974, Fortune magazine documented the country’s “Bicycle Craze,” citing homegrown manufacturers like Murray and Huffman (Ohio), Schwinn (Chicago), and AMF (Ohio, Arkansas, and Illinois). But after demand fell off in the late ‘70s and ‘80s, brands looked for ways to cut costs and ultimately shifted production to other countries, like China. In 2022, 97.8% of bikes sold in the U.S.—electric and people-powered—were imported. Blumenauer’s Domestic Bicycle Production Act aims to incentivize American companies to make bicycles again through a mix of tariff suspensions, tax credits, and loans. Fast Company spoke to Blumenauer about his first bicycle memory, how bicycles have the power to bridge the political divide, and why America can and should be a powerhouse of bicycle manufacturing once again.
Boeing Resumes Widebody Deliveries To China Following 777 Freighter Arrivals
Boeing has restarted widebody deliveries to China following a two-month hiatus forced by a regulatory review. The planemaker recently delivered two new 777 freighters and is expected to resume 787 Dreamliner and 737 MAX deliveries shortly. According to a Reuters report, a source told the news agency that all Boeing deliveries to China are set to resume following the brief stop. In May, the Civil Aviation Administration of China (CAAC) ordered a halt to deliveries as it conducted a regulatory review into the batteries powering the aircraft's cockpit voice recorders (CVR).
Two Boeing 777F cargo planes were delivered to the customer at the tail end of last week, representing the first Boeing deliveries for almost two months. Prior to this, Boeing had last delivered a widebody (a 787-9) to China Southern Airlines on May 10th, while you'd have to go back a full year for its last 777F delivery. The two 777Fs have joined Air China Cargo, which operates a total of 11 777Fs, three 747-400Fs and one Airbus A330P2F, and has two more 777Fs on order from Boeing. Boeing delivered a total of 83 aircraft in the first quarter, a considerable drop from the 130 delivered the year prior, and has stated its second-quarter total will be similar.
GlobalFoundries Races to Find Semiconductor Talent as Demand for Chips Soars
The U.S. chips industry is expected face a shortage of 67,000 technicians, computer scientists and engineers by 2030, while the broader U.S. economy is set to have a gap of 1.4 million such workers, according to a 2023 study from the Semiconductor Industry Association. A separate study from Deloitte found the talent crunch in the semiconductor space could get even worse due to the global economic environment and ongoing supply chain issues. GlobalFoundries, the third-largest chipmaker globally, is casting a wide net to recruit talent. The company has sought out veteran candidates, along with candidates from its own workforce reentry program and an initiative for women in construction.
In 2021, the company launched the sector’s first registered apprenticeship program (Through the Manufacturers Intermediary Apprentice Program that the Council of Industry runs in the Hudson Valley) which is full time and paid with benefits, with training at no cost to the apprentice. It is completed in two years or less, and requires only a high school diploma or equivalent and interest in the mechanical field. Some 50 apprentices have gone through the program so far, the company said. It has recruited graduates with technical associate degrees from regional community colleges and veterans transitioning out of the military for the program.
Battery Metal Lithium is Dirt Cheap, and Could Have Further to Fall
Lithium prices are plumbing multiyear lows in a market awash with the battery material, and it’s unlikely they have hit rock bottom yet. The race to build new mines for a clean-energy transition that’s expected to need lots of lithium has pushed global production out of lockstep with demand in the small but fast-growing market. Lithium-ion batteries are key to powering electric vehicles, among other things, but consumers have been slower to make the switch from gas-powered cars than many investors and auto executives envisaged.
Instead of cutting back on lithium output to balance easing demand growth, miners have sought to ride out the downturn by slashing costs and putting off new projects. This week, a closely followed lithium price from Benchmark Mineral Intelligence sank to its lowest level since the market-data company began publishing weekly prices in early 2023. Lithium’s worsening slump follows a two-year boom that took the little-known commodity to record-high prices and fueled new mining investments. The pullback is a win for consumers and automakers by reducing battery costs. For miners, not so much.
The Battle Over J&J’s Bankruptcy Plan to End Talc Lawsuits
Johnson & Johnson is locked in a bitter fight with lawyers opposing its third attempt to settle tens of thousands of lawsuits through a controversial bankruptcy-court maneuver. The women alleging J&J’s talc products caused their cancer are caught in the crossfire. After being rebuffed twice by federal courts, the $350 billion healthcare giant is attempting again to end the litigation in a so-called “Texas two-step” bankruptcy. The maneuver involves offloading its talc liability onto a newly created subsidiary, which then declares Chapter 11. The goal is to use the proceeding to force all plaintiffs into one settlement – without requiring J&J itself to file bankruptcy.
But the company needs the votes of 75% of claimants before the subsidiary can ask a bankruptcy judge to impose the deal on all of them. J&J faces lawsuits from more than 61,000 plaintiffs but the figure swells as high as 100,000 when counting claimants who haven’t sued, according to Erik Haas, J&J’s global vice president of litigation. The company maintains its talc products are safe and do not cause cancer. Some plaintiffs’ lawyers are urging their clients to support the settlement. But a coalition of other plaintiffs’ lawyers is fighting back, saying J&J’s bankruptcy maneuver should not be legally allowable – given that the company itself is immensely profitable – and that its $6.48 billion offer is too low.
Foreign Carmakers Fight to Survive in China as Market Share Dwindles
New data show foreign carmakers’ share of the Chinese market is shrinking more quickly, and foreign executives say any turnaround is years away. In the first six months of the year, foreign brands such as Tesla and Volkswagen took 43% of the passenger-car market in China, down from 50.5% in the same period a year earlier, the China Passenger Car Association said Monday. China’s auto market, the world’s largest by unit sales, is rapidly electrifying with help from state subsidies, and local electric-vehicle makers have grabbed significant market share.
The foreigners’ setbacks in China have added to the global backlash against Chinese car exports, with the U.S. and some other governments figuring they have little to lose by hitting Beijing with tariffs. The U.S. in May set a 100% tariff on Chinese EVs, and the European Union followed suit the next month by releasing tariff rates of about 17% to 38%. In the first six months of this year, car sales rose 3.3% from a year earlier to 9.84 million vehicles, according to the Chinese car association. Gas-car sales continued to tumble, while growth of EV sales slowed. Overall, new-energy vehicles, a category that includes full EVs and plug-in hybrid vehicles, accounted for about 42% of the market in the first half. Tesla fell to third place in the new-energy-vehicle category in the January-May period, according to the latest available data from the association, behind China’s BYD and Geely Auto.
Robots are Better Than Humans at Everything, Including Solving Rubik's Cubes
Laura Davis, the editor in chief of New Equipment Digest, recently reported on the TOKUI Fast Accurate Synchronized Motion Testing Robot, or TOKUFASTbot, which has received a Guinness World Record for being the fastest to complete a Rubik's Cube. Below is an excerpt from her blog post:
‘Awarded on May 21, 2024, the previous record of 0.38 seconds was beaten by TOKUFASTbot's time of 0.305 seconds. That's only 0.075 seconds faster. The team worked to set the world record as a demonstration of the technical capabilities of high-tech motors, power semiconductors, and related products developed and manufactured by its Component Production Engineering Center. Established in 2016, this center produces technologies that achieve high-speed and high-precision windings that increase the productivity and efficiency of motors used in many of the products.’
Read the blog and watch the video at Plant Services
The Mission for Europe’s New Rocket: Challenge SpaceX
Europe’s satellites and military intelligence have come to depend on the U.S. company after delays and malfunctions left the continent unable to get to orbit with its own rockets. Officials fear that dependence could extend to the battlefield: SpaceX’s Starlink internet service has been crucial for Ukraine to fight off Russia, fanning worries in Europe that its armies might also need Musk for satellite communications in a war. Governments say the Ariane 6 rocket, operated by the European consortium Arianespace, will begin to change that equation. It is set to lift off from French Guiana on Tuesday, Europe’s first rocket to launch in a year.
With European rockets stuck on the ground, SpaceX stepped in to fill the void. Its Falcon 9 rocket has launched all of Europe’s most important satellites over the past year, including two that were supposed to be handled by Arianespace. The most recent blow came last month when Europe’s weather-satellite agency canceled a contract to launch next year with Ariane 6 and hired SpaceX instead. The decision left European space officials crestfallen, with the head of the French space agency saying: “How far will we, Europeans, go in our naivety?”