Member Briefing June 6, 2024
More from JOLTS: Manufacturing Job Openings Decline
In April, job vacancies in manufacturing fell to their lowest level in more than three years, mirroring the larger job-opening landscape. There were 516,000 open positions in manufacturing in April, down from 546,000 in March. For a bit of context from 2017 to 2019, manufacturing averaged 432,000 job openings per month. fpenings in durable goods declined to 340,000 in April from 355,000 in March. Job vacancies in nondurable goods decreased to 175,000, down from 191,000 in March.
Meanwhile, separations—quits, layoffs, discharges and other severance of employment—in manufacturing rose to 385,000 in April from 332,000 in March. That’s the highest since last August. Quits rose to 225,000, an increase from 186,000 in March. Layoffs rose to 136,000 in April from 124,000 in March. “Manufacturing continues to have a gap of over 500,000 open jobs, which is still elevated above pre-pandemic levels—and this makes it harder for companies to compete,” said Manufacturing Institute President and Executive Director Carolyn Lee. The MI is the NAM’s 501(c)3 workforce development and education affiliate. “In a tight market for skilled talent, retention has to remain a top focus. From recruiting from new< /a> talent pools to focusing on key retention elements, such as culture and flexible scheduling, manufacturers remain focused on their most essential resource: their workforce.”
Empire Center Index: State’s On Wrong Track, Tax Cap Popular And More
Three in five New Yorkers (60 percent) say the state is on the wrong track, up from 55 percent earlier this year, according to the latest Empire Index poll of registered voters by the Empire Center for Public Policy. The survey of 1,003 New York registered voters (margin of error: 3 percent) was conducted by Morning Consult. Notable findings on taxes and spending included the following:
Asked whether their tax dollars “are put to good use” by the federal government, only 25 percent said “yes” (61 percent said “no”). New York state government received slightly better marks, with 33 percent “yes” compared to 53 percent “no.” Respondents were more favorable about their local governments, with 45 percent of New York City residents and 44 percent of other New Yorkers indicating their local government puts funds to good use.
The property tax cap, which limits the rate at which property taxes rise in the counties outside New York City, remains overwhelmingly popular, with 67 percent of voters in those counties either strongly or somewhat supportive compared to just 12 percent who strongly or somewhat oppose the 2011 law.
Asked whether their local school district spends “more, less, or about the same as other school districts nationwide,” 33 percent of New Yorkers said their school district’s spending is “about the same” and a total of 14 percent said “somewhat less” or “much less.” (Every school district in New York spends more than the national average).
Read more at The Empire Center
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Israel Hits Central Gaza With Airstrikes in ‘Targeted’ Operation - VOA
- Israel and Hezbollah Move Closer to Full-Scale War - WSJ
- Gunman Attacks US Embassy In Lebanon: What We Know - Newsweek
- Here’s a Closer Look at the Hurdles to a Cease-Fire Deal - NYT
- Hamas Signals Post-War Ambition in Talks With Palestinian Rival Fatah – Reuters
- Israel Reportedly Used Fake Social Media Accounts To Garner Support From U.S. Lawmakers On Gaza War - Forbes
- U.N. Atomic Agency Censures Iran Over Nuclear Actions Despite Retaliation Threat - WSJ
- Slovenia Becomes Latest EU Country to Recognise Palestinian State – Reuters
- 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
- Ukraine Says Extending Use of Western Arms Will Weaken Russia Near Border - Reuters
- Kremlin Issues Stark US Statement as Relations Hit New Low - Newsweek
- Any French Military in Ukraine Would be a ‘Legitimate Target’ for Russian Forces, Lavrov Says - AP
- Ukraine Uses U.S. Weapons On Russian Soil After Kremlin Warning Of ‘Fatal Consequences,’ Report Says - Forbes
- Allies Make Progress on Using Russian Assets for Ukraine, U.S. Official Says – Reuters
- One Year After Kakhovka Dam Destruction - VOA
- Russia's Gas Giant Reports Costly Impact of Putin's War - 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
- South Africa's ANC Leaning Towards Government of National Unity – Reuters
- Modi-led Alliance Says it Will Form Next Indian Government – France 24
- China Stakes Claim on 'Dark Side' of Moon - Newsweek
- Defence, Migration and the Green Deal: Key Issues at stake in the EU Elections – France 24
- Terror Attacks Headline Threats to Upcoming Paris Olympics - VOA
- D-Day In 9 Maps: How Allies Stormed Normandy Beaches - Newsweek
- The UN Says Global Public Debt Hit a Record $97 Trillion in 2023. Developing Countries are Hard Hit - AP
- U.S. Cracks Down on Former ‘Top Gun’ Pilots Found to Be Training China’s Air Force - Time
- Russia to Provide More Military Aid, Instructors to Burkina Faso - Reuters
Policy and Politics
Hochul Delays Manhattan Congestion Pricing
New York Gov. Kathy Hochul said Wednesday New York will indefinitely delay the June 30 start date of the plan to charge a $15 toll on people who drive into Manhattan south of 60th Street. The nation’s first congestion pricing plan was signed into law in 2019 by then-Gov. Andrew Cuomo and was intended in part to fund public transportation. Hochul said she delayed the plan from going into effect because she was concerned about the rising cost of living and New York’s economic recovery from the Covid-19 pandemic. Office attendance in Manhattan is down compared to before the pandemic and Manhattan still faces a commercial vacancy rate of over 20%, she said.
The toll plan has faced opposition from unions, business owners and New Jersey Gov. Phil Murphy. Congestion pricing would help the flow of traffic, improve air quality and help fund $15 billion in mass transit improvements, leaders of the Metropolitan Transportation Authority have said. According to MTA data, traffic on bridges and tunnels has returned to pre-pandemic levels. Meanwhile, estimated weekly average subway ridership so far this year is 66.5% of 2019 levels.
House Lawmakers Propose $1.3 Billion for Pentagon Innovation, Field Commercial Technology
House lawmakers want to allocate more than $1.3 billion in fiscal year 2025 toward Pentagon initiatives such as the Defense Innovation Unit — part of a continued push from Congress to field commercial technology at a faster clip. The House Appropriations defense subcommittee’s draft of FY25 military spending legislation, released June 4, would add more than $500 million for DIU initiatives to quickly deliver capabilities that meet urgent needs from combatant commands and the services. The bill would also expand access to classified facilities for the innovation hub and the non-traditional companies it works with.
Another $400 million would support a Pentagon effort to fast-track technology from small business to military users, known as Accelerate the Procurement and Fielding of Innovative Technologies, or APFIT. Congress provided $300 million for the project in fiscal 2024, which funded capabilities including a mobile communications gateway for the Navy and optical clocks for the Defense Advanced Research Projects Agency.
Senators Push Commerce Department to Finalize March-In Rights rules Aimed at Lowering Drug Prices
Two leading Democratic lawmakers late last week wrote a letter urging the U.S. Department of Commerce to strengthen and finalize guidance for so-called march-in rights. "Our review of the comments indicates that the exercise of march-in rights has received broad support from seniors, from dozens of health care providers and from the broader public," wrote Sen. Elizabeth Warren, D-Mass., and Rep. Lloyd Doggett, D-Texas. "More than 85% of comments were in favor of the proposal, and these comments reveal that this is a popular framework that will help reduce exorbitant drug costs."
March-in rights are given to allow the federal government to grant patent licenses to other parties or to take licenses for themselves if they helped fund the patent owner's research and development. Such licenses even can be granted to competitors if the government deems it necessary. The National Assocaiton of Manufacturers and other business groups strongly oppose march-in rights arguing it will stifle innovation and prevent the development of breakthrough drugs.
Health and Wellness
What To Know About Personalized mRNA Cancer Vaccines After Promising Trials From Moderna And Merck
Merck and Moderna released “extremely impressive” positive data from a mid-stage trial of the world’s first personalized mRNA cancer vaccine for melanoma, the deadliest form of skin cancer, which when used alongside Merck’s blockbuster immunotherapy, Keytruda, halved the risk of patients dying or the cancer returning. The trial, the longest study into the new technology so far, is one of a growing number of collaborations testing how mRNA vaccines — the technology underpinning COVID-19 in shots from Pfizer, BioNTech and Moderna — can be turned against different types of cancer.
Each vaccine is developed using samples of their cancer and personalized to an individual patient using genetic sequencing and artificial intelligence, priming the immune system to recognize unique mutations or features of the cancer cells and attack them if any are remaining or resurface after treatments like surgery, boosting chances of recovery and remaining cancer free in the future. In addition to melanoma, trials of the personalized vaccines are already planned or underway for a wide range of cancers, including other skin cancers, neck and head, lung, pancreatic, bladder and kidney cancers, and experts have hailed the shots as “gamechangers” that offer a real hope of curing cancer.
Election 2024
- Trump-Biden 2024 Polls: Here’s Who’s Winning In The 6 States That Will Decide The Election - Forbes
- Donald Trump's Conviction Was Expected to Sink Him in the Polls. It Hasn't - Newsweek
- Border Issues - Competitive Contests in New Mexico, Arizona and Texas Could Determine Control of House - WSJ
- 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
Finally - Boeing Spacecraft Carrying Two Astronauts Lifts Off on Historic Maiden Voyage
The third attempt was the charm for Boeing’s Starliner mission after launching its first crewed flight test Wednesday in a milestone that has been a decade in the making. The new spacecraft’s maiden voyage with humans on board lifted off atop an Atlas V rocket at 10:52 a.m. ET from Cape Canaveral Space Force Station in Florida. The mission, known as the Crew Flight Test, is the culmination of Boeing’s efforts to develop a spacecraft to rival SpaceX’s prolific Crew Dragon capsule and expand the United States’ options for ferrying astronauts to the space station under NASA’s Commercial Crew Program. The federal agency’s initiative aims to foster collaboration with private industry partners.
The astronauts will spend just over 24 hours traveling to the space station. The astronauts will test various aspects of Starliner’s capabilities, including the spacecraft’s thruster performance, how their spacesuits function within the capsule, and manual piloting in case the crew needs to override the spacecraft’s autopilot. After docking around 12:15 p.m. ET Thursday, Veteran NASA astronauts Butch Wilmore and Suni Williams are set to spend eight days living in the orbiting laboratory, joining the seven astronauts and cosmonauts already on board.
Asia’s Chip Giants Hustle to Maintain Their Edge Over the U.S.
In early April, South Korean President Yoon Suk Yeol didn’t mince his words when describing why chips are paramount to the country’s economic survival. “The competition over semiconductors unfolding now is an industrial war,” Yoon told government and industry officials. “An all-out war between countries.” Asia’s chipmaking champions in South Korea and Taiwan are U.S. allies, often seeing eye-to-eye on security and politics. But on semiconductors, they are increasingly friendly competitors—and Seoul and Taipei, with clear advantages, aren’t sitting idle as Washington looks to muscle back into production. They offer lower costs, faster construction times and the benefits of an established supply chain. While a handful of Taiwanese and Korean companies are expanding their manufacturing footprints into the U.S., the most advanced technology is getting rolled out first back home.
The stakes are high for these chip-dominant economies. Semiconductors represent about one-fifth of South Korea’s exports. Unlike America’s Silicon Valley, Taiwan relies on a so-called Silicon Shield—the belief that its chip sector is so vital to global trade that it can deter a Chinese attack. To be sure, American companies such as Nvidia, Qualcomm and Apple design the world’s best chips. But in recent decades, the ability to manufacture them has overwhelmingly resided in Asia.
Pharmaceutical Manufacturing’s Reshoring Problem
When the pandemic hit and Americans found themselves looking to China for critical medical supplies, the idea of reshoring — a concept that had drifted along the currents of the manufacturing sector for over a decade — embedded itself into pharma discourse with renewed luster. Reshoring found some of its most fervent supporters inside the halls of Congress, with leaders touting the idea as a catch-all cure to pharma’s longstanding supply chain ills and putting forth a rush of legislation. The country’s reshoring fever has persisted into the Biden administration, with the president invoking the Defense Production Act, a Truman-era policy, to unlock government investment in the domestic manufacturing of essential medicines, countermeasures and critical inputs last November.
“There’s certainly a lot of activity in this space right now and a tremendous amount of money that’s being thrown at it. And you’re seeing bits and pieces of it take hold,” says Bikash Chatterjee, president and chief science officer at Pharmatech Associates, a USP company. The government’s investments into generic drugs and APIs have created an air of excitement surrounding the westward migration of manufacturing. But health care economists, such as Marta Wosińska, are worried about what comes next. “If I were a manufacturer and the government were to offer me a bunch of money to build a facility, I would be asking a lot of questions about whether that’s going to be enough for me to be competitive in the market after,” says Wosińska.
Read more at Pharma Manufacturing
Ford EV and Hybrid Sales Surge 65% in May
Ford Motor’s U.S. new vehicle sales rose 11.2% last month compared with May of last year, boosted by strong sales growth for all-electric and hybrid models. The Detroit automaker on Tuesday reported roughly 65% increases in sales of both hybrid and all-electric vehicles. That’s compared with a 5.6% rise in sales of Ford’s traditional vehicles with internal combustion engines. Despite the notable increases in hybrids and EVs, the sales in those segments totaled about 26,600 vehicles combined. That’s only 14% of the automaker’s more than 190,000 total sales last month.
The boost to EV sales is a conundrum for investors. Ford wants to grow EV sales to build scale and assist in offsetting tightening fuel economy standards and emissions, but the company’s Model E electric vehicle unit has reported massive losses. Ford reported in April the division lost $1.32 billion on 10,000 vehicles wholesaled from January through March. While the unit also includes EV-related business such as software, those losses equate to a loss of $132,000 for each vehicle the unit sells. The spike in hybrid sales is part of Ford’s plan to double down on the technology. The automaker earlier this year said it would delay production of new all-electric vehicles to instead focus on offering hybrid options across its entire North American lineup by 2030.
Apple Stock Hits $3 Trillion Valuation As AI iPhone Hype Builds
Apple’s stock rose as much as 1% to $196.42 in Wednesday trading, notching their highest share price since mid-December and crossing a $3 trillion market capitalization for the first time since January. JPMorgan analyst Samik Chatterjee, who was among a chorus of analysts who hyped Apple’s annual event in notes to clients this week and thus boosted the share price, said the conference starting Monday will “highlight whether Apple has successfully caught up with the rest of the industry, despite a perceived delay in relation to investments in AI.”
Chatterjee said he expects the WWDC event will “successfully catalyze an upgrade cycle” for the iPhone, a much-needed tailwind for Apple as iPhone sales are expected to be the weakest since 2020 during the current quarter, according to consensus analyst forecasts compiled by FactSet. Chatterjee added he anticipates the upgrade cycle, in which the estimated 1.5 billion iPhone users trade in their existing smartphones for the newest model, will begin this year before accelerating in 2025 as macroeconomic conditions are likely to improve and consumers grow hungrier for AI-heavy smartphones.
Product Recalls Boom in Q1
Quality issues escaping the manufacturing plant and finding their way into the public is an ongoing challenge despite manufacturers’ best efforts to make it not so. With that as prelude: From a product recall standpoint, the first quarter of 2024 did not get off to a stellar start. Just over 900 (909, to be exact) recalls were initiated across five key industries, which translates to an 8% increase over the previous quarter, and—more distressingly—the highest single-quarter total in over five years. The data comes courtesy of brand protection company Sedgwick in its latest U.S. Recall Index report. among the highlights, or lowlights, shared by Sedgwick:
Automotive recalls were up 9.2% over the previous quarter, but the number of units impacted fell by 15.2%. For the fifth consecutive quarter, electrical issues were the leading cause of the recalls.
The pharmaceutical industry had good news on both the number of recalls and number of units impacted over the previous quarter. Recalls dropped by 14.5% and the number of recalled units fell by 46.3%.
FDA-related recalls grew by 27.6% over the previous quarter, with undeclared allergens cited as the leading cause of the recalls.
Read more at Quality Assurance & Food Safety
Climate Contradictions on World Environment Day
The UN secretary-general delivered a “hard-hitting” speech about the dangers of global warming in New York on Wednesday. António Guterres is once again demanded much faster action by governments to slash emissions. Last year the International Energy Agency, a forecaster, predicted that, because of the rapid expansion of renewable-energy sources, fossil-fuel use would peak in 2025. But prognostications have recently become gloomier. In May Wood Mackenzie, a consultancy, predicted that emissions will peak in 2032.
BloombergNEF, another consultancy, now predicts that the global cost of reaching net-zero by 2050 will be $34trn higher than previously thought. Both energy consultancies reckon that high interest rates and supply-chain problems will make expanding renewable capacity further much more expensive and difficult. Companies and countries seem more inclined to accept that the future will be grim than to listen to Mr. Guterres. Many companies recently weakened their environmental targets. In April Scotland’s government scrapped its goal of cutting emissions by 75% by 2030, saying it was unrealistic.
Read more at the United Nations
OPEC+ Statement Rippling Through - not Rattling - Oil Markets
A big announcement from OPEC+ on Sunday has been rattling through the energy sector over the past several days. The group detailed a series of production cuts and extensions, giving participants a clearer tapering schedule through the end of 2025. Despite the proclamation, oil prices have struggled in recent sessions, with Brent crude falling under $80/bbl for the first time this year and WTI moving closer to $70, which is way off the $100 mark that OPEC+ is targeting with its new roadmap.
When delving deeper into the details of the agreement, there is a lot to consider aside from the headlines. Collective group cuts of 3.7M barrels per day were extended by a year until the end of 2025, but additional cuts of 2.2M bpd - which were supposed to expire this month - were only extended until Q3 of 2024. The latter grants OPEC+ the leeway to roll additional barrels back into the market, giving the group flexibility to restore more supply when conditions warrant their release. The total amount of current OPEC+ cuts is about 5.9M barrels per day, or 5.7% of global demand, which can somewhat be made up for by countries outside of the group like the U.S., Canada, Brazil and others
Mercedes and Stellantis Press Pause on EV Battery Factories
ACC, a battery joint venture backed by carmakers Stellantis (STLAM.MI), opens new tab and Mercedes (MBGn.DE), opens new tab, has paused work on factories in Germany and Italy as the company switches to lower cost batteries amid slowing demand for electric vehicles. The company said on Tuesday it needed to research and develop low-cost batteries to supply cheaper EVs and that it would confirm its industrial and construction timeline in late 2024 or early 2025.
ACC has been working on building a factory in Italy's Termoli and another in Germany's Kaiserslautern. It is currently ramping up production at its first factory in northern France. Growth in Europe's EV market has slowed significantly, with high interest rates and slashed government subsidies pushing consumers to opt for hybrids or petrol cars instead. The European manufacturers are under pressure from growing exports by Chinese companies that largely use cheaper lithium iron phosphate (LFP) batteries, significantly reducing their cost of production.