Member Briefing June 20, 2022

June 20, 2022

Posted By: Harold King in Daily Briefing,

NAM Survey: Inflation, Recession Signs Worry Manufacturing Leaders, But Optimism Remains

The National Association of Manufacturers Q2 2022 Manufacturers’ Outlook Survey shows manufacturers’ significant concerns around recession, inflation, hiring and China competition legislation. The NAM conducted the survey May 17–31, 2022. Here are some key Findings:

59.3% of manufacturing leaders believed inflationary pressures would make a recession more likely in the next 12 months.
Increased raw material costs topped the list of primary business challenges in the second quarter, cited by 90.1% of respondents.
Three-quarters of manufacturers felt inflationary pressures were worse today than six months ago.
The top sources of inflation were increased raw material prices (97.2%), freight and transportation costs (83.9%), wages and salaries (79.5%) and energy costs (55.9%), with 49.4% also citing a shortage of available workers.
When asked about what aspects of the China competition legislation were most important for supporting manufacturing activity, 70.9% of respondents cited addressing port congestion and competition issues in shipping.
Despite ongoing economic headwinds, manufacturers remain largely optimistic, with 82.6% of respondents maintaining a positive outlook for their company.

War in Ukraine Headlines

U.S. Industrial Production Eased in May, Adding to Signs of Economic Slowdown

Total industrial production moved up 0.2 percent in May, Output has increased in every month of the year so far, with an average monthly gain of nearly 0.8 percent. The indexes for utilities and mining rose 1.0 percent and 1.3 percent, respectively. At 105.7 percent of its 2017 average, total industrial production in May was 5.8 percent above its year-earlier level. Capacity utilization edged up to 79.0 percent, 0.5 percentage point below its long-run (1972–2021) average.

Manufacturing output slipped 0.1 percent in May; even so, the index has advanced 4.8 percent over the past 12 months. In May, the index for nondurable manufacturing moved up 0.1 percent, while the indexes for durable manufacturing and for other manufacturing (publishing and logging) each moved down 0.2 percent. The easing of industrial output added to signs of an economic slowdown.

U.S. Economic Growth Shows Signs of Slipping

he U.S. economy is starting to slow under the combined weight of soaring inflation and climbing interest rates—including the highest mortgage rates since 2008. Economists have slashed their projections for second-quarter output growth in recent days. One closely watched forecast—the Federal Reserve Bank of Atlanta’s GDPNow tracker—estimates that gross domestic product is on track to remain unchanged at an annual rate over the three months through June 30. Output fell at a 1.5% annual rate in the first quarter.

Recent reports show sharp declines in key sectors, raising the prospects of a stalled economic recovery and possibly a recession. Home construction across the U.S. fell sharply in May, the Commerce Department said Thursday. Factories in the mid-Atlantic region reduced activity for the first time in two years this month, the Federal Reserve Bank of Philadelphia said. And Americans broadly cut spending at retailers for the first time this year in May, the Commerce Department said earlier this week.

US COVID – Hospitalizations Begin to Taper

The US CDC is reporting 85.7 million cumulative cases of COVID-19 and 1,007,374 deaths. The average daily incidence has plateaued over the past several weeks, holding relatively steady at approximately 100-110,000 new cases per day. Despite the ongoing elevated daily incidence, there has not observed a corresponding increase in daily mortality. Daily mortality has held relatively steady at approximately 275-325 deaths per day since late April.

Despite the absence of a surge in COVID-19 mortality, both new hospital admissions (+6.5% over the past week) and current hospitalizations (+1.8%) continue to increase. Notably, both trends appear to be tapering off to some degree. Considering the plateau in daily incidence, it is possible that hospitalizations could also remain elevated, rather than peaking and then declining. Community transmission in the US continues to be driven by the BA.2.12.1 sublineage of Omicron (64.2%), followed by BA.2 (14.2%), BA.5 (13.3%), and BA.4 (8.3%).

NYS Vaccine and COVID Update –

Vaccine Stats as of June 17:

One Vaccine Dose

90.9% of all New Yorkers – 16,651,966
In the Hudson Valley 1,732,322

Fully Vaccinated

77.6% of all New Yorkers – 14,943,680
In the Hudson Valley – 1,527,264

Boosters Given

All New Yorkers – 8,720,979
In the Hudson Valley – 1,060,324

The Governor updated COVID data through June 17. There were 13 COVID related deaths for a total reported of 71,670

Hospitalizations:

Patients Currently in Hospital statewide: 1,842
Patients Currently in ICU Statewide: 211

7 Day Average Positivity Rate – Cases per 100K population

Statewide 5.48% – 24.98 positive cases per 100,00 population
Mid-Hudson: 5.99% – 25.13 positive cases per 100,00 population

Useful Websites:

The FDA, CDC Authorizes COVID-19 Shots for Infants and Preschoolers

U.S. regulators on Friday authorized the first COVID-19 shots for infants and preschoolers, paving the way for vaccinations to begin this week. The Food and Drug Administration’s action follows its advisory panel’s unanimous recommendation for the shots from Moderna and Pfizer. That means U.S. kids under 5 — roughly 18 million youngsters — are eligible for the shots. The nation’s vaccination campaign began about 1 1/2 years ago with older adults, the hardest hit during the coronavirus pandemic.

An independent panel of advisers to the U.S. Centers for Disease Control and Prevention voted on Saturday to recommend vaccinating all children in the age group with one of two separate COVID-19 vaccines manufactured by Moderna and Pfizer-BioNTech. The CDC advisory panel voted 12-0 in favor of recommending both vaccines for this group of children, concluding that both vaccines protect children in this age group against symptomatic COVID-19, and the benefits outweigh possible risk.

Vaccines Will Be Widely Available Statewide for Young Children

In addition to currently drafting guidance that will soon be shared with providers, New York State has already taken important steps to prepare for the rollout of vaccines to children under the age of five. State providers from outside of New York City have placed preliminary orders for over 39,000 dosages, and the State Department of Health is working to ensure providers across the state will be able to request additional doses.

Vaccines for children down to six months of age will be widely available statewide, including through pediatricians, family physicians, local county health departments, federally qualified health centers, and pharmacies enrolled in the Federal Retail Pharmacy Program.

Read the press release

What Should Parents Know About Vaccines for Kids Under 5?

Nearly 40% of those surveyed said they would “wait and see” before vaccinating their young children, 11% said they would get the vaccine for their kids only if required, and 27% said they would “definitely not” get the Covid-19 vaccination for their child.

Even parents who are eager to vaccinate likely have questions. This Q&A with CNN Medical Analyst Dr. Leana Wen offers some information. She is an emergency physician and professor of health policy and management at the George Washington University Milken Institute School of Public Health. She is also author of “Lifelines: A Doctor’s Journey in the Fight for Public Health” and the mother of two children under 5.

NYS Economy Added 27,200 Private Sector Jobs in May 2022

According to preliminary seasonally adjusted figures released by the New York State Department of Labor, the number of private sector jobs in New York State increased by 27,200 in May and over the last 12 months by 435,500 or 5.3%, to 8,008,500. New York State’s seasonally adjusted unemployment rate decreased from 4.5% to 4.4% in May 2022.

In the Hudson Valley Region over the past year, the private sector jobs count rose by 21,300, or 2.8 percent, to 781,700 in May 2022. Growth was centered in leisure and hospitality (+9,000), other services (+4,400), and professional and business services (+4,100). Manufacturing added 1,500 workers.

Hudson Valley Labor Market Profile May 2022

US Jobless Claims Total Higher-Than-Expected 229,000 Last Week

Initial jobless claims ticked down last week, but were higher than forecast, as investors monitor the labor market for potential signs of a slowdown. First-time filings for unemployment insurance in the U.S. totaled 229,000 for the week ended June 11, falling from the prior week’s upwardly revised 232,000, the Department of Labor said Thursday. Economists surveyed by Bloomberg had expected the latest reading to come in at 217,000.

Last week’s figure held near the highest level since mid-January when the Omicron-driven wave of COVID-19 sent droves of employees home from work. The most recent data also brings the four-week moving average for new claims — which smooths out volatility in the weekly data — to 1,317,500, a decrease of 750 from the previous week’s revised average. This marks the lowest level for this average since January 1970.

New York Court Overturns State Assembly Map for 2024; Rules Existing Boundaries be Used for This Year’s Elections

An appellate division of the New York Supreme Court ruled on June 10 that the state’s Assembly district boundaries adopted in February 2022 were invalid but should still be used for the 2022 legislative elections. The appellate division ruling determined that the Assembly district map was enacted in violation of the state’s constitutional redistricting process and that a New York City-based state trial court should oversee new boundaries for the 2024 elections.

The order also said, “The request for a delay of the 2022 assembly primary elections is denied in any event, because the redrawing and implementing of a new assembly map before a 2022 primary election delayed even until September is, at this late date, no longer feasible.”

Race for New York Governor Nominations Enters Final Stretch

Seven candidates, 62 counties, one state: The Republicans and Democrats vying for their parties’ nomination are entering a final 10-day stretch starting with early voting Saturday and culminating on June 28. On the Democratic side, Gov. Kathy Hochul is working to cement her place on the ballot after she quickly amassed most of the institutional support in New York state politics following the resignation of Andrew Cuomo last year. She’s being challenged by Long Island Rep. Tom Suozzi and New York City Public Advocate Jumaane Williams.

For the Republicans, Rep. Lee Zeldin of Long Island is fending off three challengers after he received his party’s preferred designation status: former Westchester County Executive Rob Astorino, former Trump administration official Andrew Giuliani and businessman Harry Wilson.

Large Gap in Pay and Contentment Levels for Working Women

Grant Thornton talked to 2,800 American women in the workforce to find out their views on a number of topics. While the report found an increase in the proportion of women in senior management around the globe, it’s not much as it moved from 31% in 2021 to 32% in 2022. Looking at the number over the past 10 years, it has risen from 21% in 2012.

But it’s the gap in pay and job contentment that is most surprising. Fewer than half (49%) of women feel they are paid fairly for their contributions to their company’s success. This is compared to 62% of men who believe they are fairly paid. However, the numbers improve when it comes to work-life balance with 55% of women reporting they are happy with their work-life balance versus 64% of men.

Abbot Baby Formula Plant Halts Production Again – This Time Due to Flooding

Abbott Nutrition has once again shut down a baby formula plant, this time due to heavy rains and flooding, less than two weeks after it reopened to try and mitigate a crippling U.S. shortage. The facility in Sturgis, Michigan resumed production on June 4, only to close down again earlier this week so the company could assess rain damage.

In the statement Wednesday, the manufacturer assured consumers that it had “ample existing supply” of EleCare and most of its other specialty formulas to meet demand until production could resume again. “This will likely delay production and distribution of new product for a few weeks.”

UN: Food Crisis Could Drive Record Displacements Higher

Filippo Grandi, the U.N. High Commissioner for Refugees, called for more efforts to build peace in the world as conflicts and crises like those in Ukraine, Venezuela, Myanmar, Syria and beyond have driven over 100 million people to leave their homes — both within their own countries and abroad.

UNHCR, the U.N.’s refugee agency, on Thursday issued its latest “Global Trends” report, which found over 89 million people had been displaced by conflict, climate change, violence and human rights abuses by 2021. The figure has since swelled after at least 12 million people fled their homes in Ukraine to other parts of the country or abroad following Russia’s Feb. 24 invasion.

Juneteenth: Factory Jobs and Opportunity

Yesterday and today the nation is celebrating Juneteenth. The newest federal holiday offers our country a moment to commemorate the end of slavery in the United States and reflect on the work that remains to create equity for all Americans. That includes manufacturing, a sector that traditionally offered a path to the middle class for Black Americans and other workers of color. Unfortunately, when factories were offshored starting in the late 20th century, workers of color also suffered the most.

But now our nation is at a unique moment. We’re about to rebuild our infrastructure, the clean energy sector is growing at a rapid rate, and there’s momentum to bring supply chains home. The Alliance for American Manufacturing explains in a new video how the United States can seize this moment to create millions of new, well-paid jobs for American workers, begin to close racial wealth gaps, and offer new opportunities for Black workers and other workers of color.

Watch the video (2:27)

Beijing and Shanghai are Still Trying to Get a Grip on COVID-19

Since june 1st, when the authorities in Shanghai lifted a months-long lockdown, many aspects of life in the city have returned to normal. But Shanghai’s officials are still on edge. Many residential communities reopened only to be locked down again when a positive case, or merely a close contact of one, was found in their vicinity. Residents continue to be taken away to quarantine centres if they live in the same building as someone infected.

This is what the new version of China’s “dynamic zero-covid” campaign looks like. “Micro-lockdowns” and mass testing are meant to replace economically destructive citywide closures. The strategy is supposed to be more targeted, finding and quarantining cases and their close contacts quickly. But calibration is proving difficult.