Member Briefing June 3, 2024

Posted By: Harold King Daily Briefing,

Top Story

The Fed’s Preferred Inflation Measure Rose 0.2% in April, 2.8% Year on Year. 

The personal consumption expenditures price index excluding food and energy costs increased just 0.2% for the period, in line with the Dow Jones estimate, the Commerce Department reported. On an annual basis, core PCE was up 2.8%, or 0.1 percentage point higher than the estimate. Including the volatile food and energy category, PCE inflation was at 2.7% on an annual basis and 0.3% from a month ago. Those numbers were in line with forecasts. Goods prices rose 0.2% while services saw a 0.3% increase, continuing a normalization trend for an economy in which services and consumption provide much of the fuel.

Along with the inflation reading, Friday’s release included data about income and spending. Personal income increased 0.3% on the month, matching the estimate, while spending rose just 0.2%, below the 0.4% estimate and off March’s downwardly revised 0.7%. Adjusted for inflation, the spending numbers showed a 0.1% decline, due in large part to a 0.4% decrease in spending on goods and just a 0.1% rise in services expenditures. As inflation data has come in hotter than expected, central bank officials have encouraged a cautious approach. That means less likelihood that they will be cutting rates anytime soon.

Read more at CNBC

After “Sluggish” 2024, Global Manufacturing Could See Strong 2025 – 2028

Although the global manufacturing economy is on track for “sluggish” growth of just an 0.6% annual expansion in 2024, that picture is forecasted to brighten considerably in 2025, according to a report from the industrial automation research firm Interact Analysis. Here are some key findings:

  • Manufacturing output is expected to recover in 2025 and maintain a steady rate through to 2028, despite seeing a slight dip in the growth rate in 2026, the firm said in its latest Manufacturing Industry Output Tracker (MIO).
  • While most territories see optimistic signs of future growth, the global measure of manufacturing production could be hindered by a stuttering economy in China. The report includes a slight downward revision for China compared with the previous edition; from 2.8% to 2.4%.
  • All four major European manufacturing economies are currently in a downward cycle, and sentiment for the year remains gloomy. But that trend may be flipped by positive signals from the U.S., which may well start to manifest in other regions later in the year, Interact Analysis said.
  • The semiconductor industry has also bounced back from a low point in 2023, boosting outlook for parts of South-Asia heavily reliant on the market sector, including Taiwan, Singapore, and South Korea. Dwindling order books and the impact of the higher cost of living have constrained global demand, but there are signs of recovery in consumer spending and post-Covid supply chain problems have eased considerably.

Read more at DC Velocity

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Policy and Politics

Empire State Development Makes Grant Funds Available for Small ‘Legacy’ Manufacturers

Round XIV (14) of New York’s Consolidated Funding Application (CFA) has been launched for 2024. New in this round is $10 million of funding reserved for the Small Manufacturer Modernization Grants Program by way of the Empire State Development (ESD) Initiative; the objective of this program is to enable small legacy manufacturers to remain competitive and continue to successfully operate via incorporation of advanced technology.

To be eligible companies to have been in business for at least ten years, have between 5 and 99 employees and at least 30% of sales outside NY State. For each manufacturer, a minimum of $50,000 in grant funding must be requested, with a maximum possible award of $250,000. Any projects undertaken because of a grant from this program must be completed within two years of the award. The deadline for submitting an application using the CFA is July 31st before 4:00 pm.

Read more at Walden Associates and ESD

Bill Aims to Ban Legacy College Admissions in New York

Legislation that proponents have named the “Fair College Admissions Act” is meant to prohibit New York state two- and four-year schools from considering family alumni when choosing new students. Assembly sponsor Latrice Walker, D-Brooklyn, said the practice effectively discriminates against low-income families and students of color. Walker said the bottom line is everybody should have equal access to education, regardless of the family from which they're born. She said she hopes to pass the bill this year.

Tully Rinckey Associate Attorney Nick Marricco said the legislation is well-intentioned. The attorney said it raises questions about what colleges should do if legacy information is offered voluntarily in personal statements, essays and interviews. He also believes it could be ripe for a lawsuit, specifically from religious schools who could claim the prohibition is a violation of the First Amendment.

Read more at New York State of Politics

Manchin Leaves Democratic Party, Files as Independent

West Virginia Sen. Joe Manchin, a conservative Democrat, officially filed as an independent Friday. Manchin announced in November that he wouldn’t be running for reelection this year, after serving in the Senate since 2010. Before coming to Congress, he served as the governor of West Virginia from 2005-10. “My commitment to do everything I can to bring out country together has led me to register as an independent with no party affiliation,” Manchin posted on the social platform X.

In a statement Friday, Manchin said partisanship on both sides has jeopardized democracy. National politics in America is broken, and neither side is willing to compromise, he said. “To stay true to myself and remain committed to put country before party, I have decided to register as an independent with no party affiliation and continue to fight for America’s sensible majority,” he said. Manchin will continue to caucus with Democrats and keep his chairmanship. The move helps Democrats preserve their slim 51-49 majority in the Senate.

Read more at The AP

Health and Wellness

A Mayo Clinic Virologist Explains FLiRT and Why You May Need a New COVID-19 Vaccination

A new variant of COVID-19, known as FLiRT, is now the most dominant strain in the U.S. This variant, which evolved from the omicron strain, is characterized by changes in its spike protein — the part of the virus that binds to host cells. Dr. Matthew Binnicker, director of the Clinical Virology Laboratory at Mayo Clinic, says that these changes could increase the virus' ability to infect cells and evade the immune system, even in people who have previously been infected or vaccinated.

"This variant can evade the immune response more effectively than prior versions of the virus. If you've been infected, or you've been vaccinated, and you've got some antibodies in your system, those antibodies may not recognize the protein on the surface of the virus as well," says Dr. Binnicker. According to the Centers for Disease Control and Prevention (CDC), this new variant is now responsible for more than 28% of COVID-19 cases in the U.S. Dr. Binnicker says there is a potential for an increase in cases during the summer months, with a more significant surge expected in the fall and winter.

Read more at the Mayo Clinic


The Governor updated COVID data for the week ending May 31st.


  • Weekly: 11
  • Total Reported to CDC: 83,352


  • Average Daily Patients in Hospital statewide: 524
  • Patients in ICU Beds: 39

7 Day Average Cases per 100K population

  • 3.6 positive cases per 100,00 population, Statewide
  • 3.6 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

Election 2024


Industry News

Revisions to Consumer Goods Spending Lowered Q1 GDP Growth

The economy expanded at just a 1.3% annualized rate in the first quarter, down three tenths-of a-percentage point from the initially reported 1.6%. The headline slowing was not much of a surprise, the composition of the revisions was. The main culprit for the weaker read is consumer spending. Since the start of the Federal Reserve's rate hikes more than two years ago, consumers have demonstrated resilience that defied the lessons of prior cycles.

All the weakness in the initial estimate was on the durable goods side with non-durable good spending flat. The revisions marked down those spending estimates significantly. Goods spending is now estimated to have contracted at an 1.9% annualized rate including a 4.1% contraction in durable goods outlays and a 0.6% annualized drop in non-durable goods spending. These revisions are consistent with downward revisions to Q1 retail sales, and suggests we'll see some revision to monthly durable goods spending.

Read more at Wells Fargo

April Trade Gap in Goods Widens to Largest Deficit in Almost Two Years

The U.S. trade deficit in goods widened 7.7% to $99.4 billion in April, according to the Commerce Department’s advanced estimate released Thursday. That’s the widest deficit since May 2022. Economists polled by Econoday were looking for the deficit to widen to a $92.5 billion deficit. The report also showed a 0.2% gain in wholesale inventories in April after a 0.4% drop in the prior month. And advanced retail inventories were up 0.7% after a 0.1% gain in March. Excluding autos, retail inventories were up 0.3%.

Imports rose a sharp 3.1% to $269.3 billion in April while exports rose 0.5% to $169.9 billion. The data show that the U.S. consumer continues to have strong demand relative to other countries. In keeping with the recent trend, trade is expected to be a drag on GDP in the second quarter.

Read more MarketWatch

Defense-Focused Program to Boost Manufacturing Workforce

A new initiative formed by some federal agencies and academia seeks to address “critical workforce shortages” for U.S. manufacturers – specifically for metalcasting and forging operations. METAL, the Metallurgical Engineering Trades Apprenticeship and Learning program, will serve as a “strategic countermeasure to fortify national defense through workforce empowerment and technological sovereignty,” according to the sponsors. Specifically, the U.S. Dept. of Defense has determined that at least 122,000 more manufacturing workers are needed to support its national defense objectives by 2028.

The METAL initiative is supported by the DoD’s IBAS program, which aims to strengthen the U.S. industrial base in response to national security threats and to promote workforce development initiatives. IBAS also seeks to cultivate a domestic workforce strong enough to sustain and advance U.S. casting and forging capabilities through 2050. "The shrinking supply chain and shortage of skilled labor demands an immediate response,” stated Dr. Matthew Draper, technical director of Metallurgy and Manufacturing for the Office of the Assistant Secretary of Defense for Industrial Base Policy. Pennsylvania will be a “testbed” for the METAL project. Curriculum will be collaboratively developed and students will participate in a pilot program in casting and forging.

Read more at Foundry Magazine

FAA Won't Allow Boeing to Boost 737 MAX Production Yet

he Federal Aviation Administration does not expect it will allow Boeing to increase 737 MAX production for at least a few more months as it addresses ongoing safety issues, the agency's administrator said Thursday, after a three-hour meeting with company officials, including outgoing CEO Dave Calhoun. The FAA put Boeing under heavy scrutiny earlier this year, ordering it to devise a comprehensive safety plan and barring it from boosting 737 production. FAA Administrator Mike Whitaker on Thursday said he does not expect Boeing to win approval to increase production of the MAX in the next few months.

Boeing is currently producing significantly fewer than the 38 737 MAXs per month it is permitted under the FAA directive. Boeing has not requested relief from the cap and they have not even had preliminary discussions about it, Whitaker said. The meeting included other senior Boeing leaders including Stephanie Pope, the new head of Boeing Commercial Airplanes, Boeing's head of quality Elizabeth Lund and Mike Fleming, Boeing senior vice president and general manager, airplane programs, the sources said. Boeing said this month it has added new training material for manufacturing and quality roles averaging about 20 to 50 more training hours per employee, while more than 7,000 new tools and equipment have been provided for commercial airplane work.

Read more at Reuters

China to Impose Export Controls on Aviation Equipment, Technology

China will impose export controls on billions of dollars of aviation equipment, technology and software, a move it said was aimed at enhancing national security. The controls, beginning July 1, will apply to dozens of products including aircraft engines, gas turbine engines, astronaut helmet visors and a polyethylene fiber commonly used in bulletproof jackets, as well as various technologies, software and data used to develop them, China’s Commerce Ministry, customs agency and Central Military Commission said Thursday in a joint statement.

According to data from China’s customs agency, in the first four months of the year, the country exported roughly $7.2 billion of the products listed under the new controls, including about $1 billion to the U.S. Exporters wishing to ship such products overseas will need to apply for an export permit, the joint statement said.

Read more at The WSJ

US Sues Hyundai, Others Over Child Labor at Alabama Parts Plant

The U.S. Department of Labor on Thursday sued South Korean auto giant Hyundai Motor Co (005380.KS), opens new tab, an auto parts plant and a labor recruiter over illegal use of child labor in Alabama. The complaint, filed in U.S. District Court in Montgomery, Alabama, also sought an order requiring the companies to relinquish any profits related to the use of child labor. Reuters reported in 2022 that children, some as young as 12, worked for a Hyundai subsidiary and in other parts suppliers for the company in the Southern state.

The Labor Department filing named three companies as defendants for employing a 13-year-old child: Hyundai Motor Manufacturing Alabama LLC; SMART Alabama LLC, an auto parts company; and Best Practice Service LLC, a staffing firm. The Department's Wage and Hour Division found the child had worked up to 60 hours per week on a SMART assembly line operating machines that formed sheet metal into auto body parts.

Read more at Reuters

Boeing’s New Legal Nightmare: Potential Damages Of $235 Million In Trade Secrets Suit

A jury in federal court in Washington state found Boeing guilty of stealing trade secrets from Zunum Aero, a Seattle-area company that won media buzz for its plans to develop a 12-seat hybrid-electric airplane that it claimed would enable affordable air travel between small cities that lacked airline service. The jury awarded Zunum a total of $81 million on those charges. But because the jury deemed Boeing’s actions malicious, the judge could triple the award.

The jury also found Boeing guilty of tortious interference through actions that allegedly dissuaded at least one potential investor, the French aerospace parts maker Safran, from funding the startup in 2018 when it was running desperately low on cash. The jury awarded Zunum $11.6 million on those grounds. Subtracting $20.8 million in damages that the jury determined Zunum could have prevented, Judge James Robart could award Zunum a maximum of $235 million. Boeing said it plans to appeal the judgment. Zunum alleged that after Boeing provided a $5 million convertible loan to the startup in 2017, the aerospace giant launched an effort to build a similarly sized hybrid-electric plane of its own. To do this, Zunum claims, Boeing used design details its staffers gathered while performing due diligence for that investment.

Read more at Forbes

The Solar Breakthrough That Could Help the U.S. Compete With China

The biggest investor in U.S. solar manufacturing is embracing a new technology that reduces the cost of producing the panels, potentially bolstering efforts to build a supply chain outside of China for an industry crucial to the energy transition. The new technology comes from an Israeli startup that promises to simplify one of the most cumbersome steps in solar manufacturing and cut costs by reducing the amount of silver needed to capture sunlight on the panels.

South Korea’s Hanwha Group says it will be the first company to use Lumet’s technology. Hanwha’s Qcells unit, one of the biggest solar-panel makers outside China, is building a multibillion-dollar solar supply chain in Georgia. The company expects the financial savings and performance gains to help it compete with low-cost products from the world’s biggest producer.

Read more at The WSJ

Boeing Scrubbed Starliner Launch With Just 3 Minutes and 50 Seconds Left in Countdown Saturday. Launch, Delaying to at Least Wednesday

The seemingly star-cross Boeing Starliner — within minutes of its long-delayed blastoff on the spacecraft’s first piloted test flight — was grounded again Saturday when one of three redundant computers managing the countdown from the base of the launch pad ran into a problem, triggering a last-minute scrub. Engineers initially were told to set up for another launch try Sunday, at 12:03 p.m. EDT, assuming the problem could be resolved in time. But NASA later announced the team would pass up the Sunday opportunity to give engineers more time to assess the computer issue.

The Starliner’s test flight includes rendezvous and docking with the International Space Station. Based on the lab’s orbit and the Starliner’s ability to to catch up, the next two launch opportunities after Sunday are Wednesday, at 10:52 a.m. EDT, and Thursday, at 10:29 a.m. NASA said the agency would provide an update Sunday. The Starliner’s crew, commander Barry “Butch” Wilmore and co-pilot Sunita Williams, came within about two hours of launch on May 6, only to be derailed by trouble with a pressure relief valve in their Atlas 5 rocket and a helium leak in the capsule’s propulsion module.

Read more at Space Flight