Member Briefing June 28, 2022
Core Capital Goods Orders, Shipments Increase Strongly
New orders for U.S.-made capital goods and shipments increased solidly in May. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.5% last month, the Commerce Department said on Monday. These so-called core capital goods orders gained 0.3% in April. Orders were boosted by strong demand for machinery, primary metals as well as computers and electronic products. But orders for electrical equipment, appliances and components fell 0.9%, while demand for fabricated metal products was unchanged.
Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, advanced 0.7% in May after rising 0.4% in April. They were lifted by a 0.8% gain in orders for transportation equipment. Motor vehicle orders climbed 0.5%. Orders for the volatile civilian aircraft category fell 1.1%.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – Reuters
- Russian Missile Strike Hits Kremenchuk Shopping Mall With More Than 1,000 People Inside, Ukraine says – CNN
- Russia ‘Defaults’ on Foreign Debt for First Time Since 1918 – Yahoo
- Zelenskyy Urges G7 to Provide Anti-Missile Systems for Ukraine – Politico
- Russian Forces Push to Extend Gains in Eastern Ukraine – WSJ
- Russian Missiles Hit Kyiv as G7 Summit Begins in Europe – CNN
- A Faked Version of Kyiv Leader Klitschko Fooled Mayors Across Europe—But it’s Not Clear This Was Really a ‘Deepfake’ – Fortune
- Russian Missiles Hit Ukraine Shopping Mall, Zelensky Says, as G-7 Leaders Pledge More Aid – WSJ
- NATO Will Increase High-Readiness Force to ‘Well Over’ 300,000 Troops – Politico
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Metal Prices Drop at Fastest Rate Since 2008
Inflation, tight supplies and recession fears have sent industrial metals down to their worst quarter since the Great Recession after they’d recently reached record highs. The Bloomberg Industrial Metals Spot Subindex has dropped 26% this quarter, while copper has fallen 11% this month on the London Metal Exchange.
It’s a dramatic reversal from the past two years, when metals surged on a wave of post-lockdown optimism, inflationary predictions and supply snarls. Now, inflation is here and supplies are still tight. But prices are plummeting as worries about a slowdown in industrial activity across major economies dovetail with slumping demand in China.
‘Really Out of Control.’ America Digs in for Inflation Fight
Inflation is the result of a mismatch between supply and demand: too many people chasing too few goods. The conventional wisdom is that the current round of price rises started because supply chains were hit hard by the pandemic. COVID-19 lockdowns temporarily closed factories and made it difficult for suppliers to catch up, especially if, say, a fire or other disaster caused further glitches.
The other explanation is that the pandemic caused demand to go up. Stuck at home, workers who no longer spent money on commuting or eating out suddenly had money to spend on home offices. Unprecedented rounds of federal stimulus payments to households didn’t hurt, either. “People felt much wealthier,” says Diego Comin, an economics professor at Dartmouth College. “We wanted to buy ovens and fridges and stuff at Home Depot to make our houses look better.”
U.S. COVID – Omicron-Adapted COVID-19 Vaccine Candidates Demonstrate High Immune Response Against Omicron
Pfizer Inc. and BioNTech announced positive data evaluating the safety, tolerability, and immunogenicity of two Omicron-adapted COVID-19 vaccine candidates: one monovalent and the other bivalent, a combination of the Pfizer-BioNTech COVID-19 Vaccine and a vaccine candidate targeting the spike protein of the Omicron BA.1 variant of concern.
Data from the Phase 2/3 trial found that a booster dose of both Omicron-adapted vaccine candidates elicited a substantially higher immune response against Omicron BA.1 as compared to the companies’ current COVID-19 vaccine. The robust immune response was seen across two investigational dose levels, 30 µg and 60 µg.
Nearly 1 in 5 Adults Who Had COVID Have Lingering Symptoms – Study
Nearly 1 in 5 American adults who reported having COVID-19 in the past are still having symptoms of long COVID, according to survey data collected in the first two weeks of June. Overall, 1 in 13 adults in the United States have long COVID symptoms lasting for three months or more after first contracting the disease, and which they did not have before the infection, the data showed.
Long COVID symptoms range from fatigue, rapid heartbeat, shortness of breath, cognitive difficulties, chronic pain, sensory abnormalities and muscle weakness. They can be debilitating and last for weeks or months after recovery from the initial infection. The CDC analysis also found that younger adults were more likely to have persistent symptoms than older adults.
Primary Elections for Governor, Other Offices Across New York TODAY, June 28th
The first of two primaries for New York is TODAY, June 28th. New York voters are facing multiple elections this year thanks to a confusing and drawn-out redistricting process that flipped the Empire State’s election calendar on its head. The first primary is for Assembly and statewide offices — including races for governor, lieutenant governor, attorney general, comptroller, and U.S. Senate.
The second primary for NY State Senate and US congressional candidates will be held August 23rd. A special election to select who will represent the 19th US Congressional District will be held August 23rd. The election pits Ulster County Executive Pat Ryan against Dutchess County Executive Marcus Molinaro. the winner will serve the remainder of 2022.
Is Price-Gouging Helping Fuel High Inflation? ‘There are Much More Plausible Candidates’
for all the public’s resentment, most economists say corporate price gouging is, at most, one of many causes of runaway inflation—and not the primary one. They include: Robust spending by consumers. Supply disruptions at factories, ports and freight yards. Worker shortages. President Joe Biden’s enormous pandemic aid program. COVID 19-caused shutdowns in China. Russia’s invasion of Ukraine. And, not least, a Federal Reserve that kept interest rates ultra-low longer than experts say it should have.
Asked to name the culprits behind the spike in gasoline prices, 72% of the 1,055 Americans polled in late April and early May blamed profit-seeking corporations, more than the share who pointed to Russia’s war against Ukraine (69%) or Biden (58%) or pandemic disruptions (58%). And the verdict was bipartisan: 86% of Democrats and 52% of Republicans blamed corporations for inflated gas prices.
High Gas Prices Spur Companies to Give Workers Cash for Commuting Costs
Rising gasoline prices are prompting more companies to offer fuel stipends, gift cards and other benefits, including continued work-from-home privileges, as they try to retain employees.
Though some executives are starting to worry a recession could be looming, several said making commutes affordable is essential as workers continue to quit jobs and it remains challenging to fill vacant positions. Employers say the perks are critical to keeping their businesses open as employees grumble about rising gas prices and office return plans.
GE Appliances Provides Job Opportunities for Refugees
It’s a road that was paved by GEA’s workforce development program that connects refugees in Louisville to good jobs at the company. . Louisville is an entry point for an immigrant population that has grown over the past 20 years.
The initiative is a partnership between GE, Catholic Charities and KY Refugee Ministries. The company has hired several dozen refugees from both Afghanistan and the Democratic Republic of Congo for various manufacturing roles at the plant and was led by talent recruiter Gabriela Salazar. It is based on a program that began by reaching out to members of Louisville’s Hispanic immigrant population. This successful program evolved to bringing in refugees. “For the company to be able to provide an opportunity for them to have a job so that they can provide for their families, and they can build a new life in Louisville, that’s exciting,” Gabriela said in a blog.
Part of the success of the program is that interpreters are provided so that language isn’t a barrier to landing a job. In fact, some of the company’s own bilingual employees volunteer their time to serve as interpreters to help new employees thrive.
Steel Tonnage Up Again, But Still Lagging
Global raw-steel output rose 3.9% from April to May, increasing for the third straight month to 169.5 million metric tons on the strength of notable month-to-month gains in China and most of the other large steelmaking nations. Production continues to lag the 2021 pace however, with worldwide tonnage down -3.5% from May 2021 and the year-to-date output down -6.3% from the January-May 2021 total.
In China, May raw steel production was up 3.9% from April, totaling 96.6 million metric tons for the month, thought that figure is -3.5% less than last May. For the current year-to-date (January-May), Chinese steelmakers have produced 435.0 million metric tons, or -8.7% less than last year’s five-month total. Steelmakers in India produced 10.6 million metric tons of raw steel during May,
Chemical Shortages hit U.S. Farms
U.S. farmers have cut back on using common weedkillers, hunted for substitutes to popular fungicides and changed planting plans over persistent shortages of agricultural chemicals that threaten to trim harvests. Agrichemical companies blame the COVID-19 pandemic, transportation delays, a lack of workers and extreme weather for shortages. Fertilizer and some seeds are also in short supply globally.
Spraying smaller volumes of herbicides and turning to less-effective fungicides increase the risk for weeds and diseases to dent crop production at a time when global grain supplies are already tight because the Ukraine war is reducing the country’s exports.
Tesla, Ford and GM Raise EV Prices as Costs, Demand Grow
Auto makers have been raising prices on electric cars, partly to offset the soaring cost of materials used in their large batteries. Car executives also are capitalizing on strong consumer interest in EVs, as a new wave of plug-in vehicles hits the market. Overall, the average price paid for an electric vehicle in the U.S. in May was up 22% from a year earlier, at about $54,000, according to J.D. Power. By comparison, the average paid for an internal-combustion vehicle increased 14% in that period, to about $44,400.
Last week, GM tacked on $6,250 to the price of GMC Hummer electric pickup-truck models, which now range from around $85,000 to $105,000, citing an increase in commodity and logistics costs. The waiting list for the recently released truck is about two years, a GM spokesman said. Tesla this year has increased prices three times for a performance version of its top-selling Model Y SUV, adding a total of about 9% to the sticker price, which is now $69,900, according to Bernstein Research.
Read more at the WSJ
COVID Long-Hauler Gets Disability Pay in Reliance Standard Deal
Reliance Standard Life Insurance Co. will pay disability benefits to a California software sales executive who contracted Covid-19 in 2020, resolving her federal lawsuit claiming she was wrongly denied benefits for post-Covid symptoms that leave her unable to work.
Reliance Standard will reinstate the executive’s long-term disability benefits and reimburse her for all unpaid benefits, the parties said in a settlement notice filed June 24 in the US District Court for the Central District of California. The parties say they’re still discussing whether the executive is owed attorneys’ fees, and they requested an Aug. 29 deadline for her to file.