Member Briefing March 10, 2022
Invasion of Ukraine Headlines
- Zelensky: Evacuation Efforts Underway in Kyiv – The Hill
- NATO Members Mount Huge Operation to Resupply Ukrainian Fighters – WSJ
- UN: Over 2M Have Fled “Apocalyptic” Situation in Ukraine – India Blooms News
- As War in Ukraine Rages, Russians Look on with Increasing Dismay – Christian Science Monitor
- What the War in Ukraine Looks Like on Russian State Media – WSJ Video
- Russians Rush to Leave as Sanctions Bite and Putin Clamps Down on Dissent Over Ukraine War – WSJ
- Russia Could Default as Soon as Next Month, Morgan Stanley Says – Fortune
- Scant Progress Evacuating Ukrainian Civilians – Reuters
- Airbnb Teaming Up with United Nations on Shelter for Ukraine Refugees – The Hill
- Map – Tracking Russia’s Invasion of Ukraine – The Economist
Lawmakers Reach $1.5T Deal on Government Funding Package
The legislation includes what Democrats have lauded as the biggest increase to nondefense discretionary spending in four years. The GOP has also touted a $42 billion increase for defense spending in the package, saying the deal achieves dollar-for-dollar parity for defense and nondefense increases. The bill also will include about $14 billion in emergency funding to boost humanitarian, security and economic assistance for Ukraine and central European allies.
The House is expected to take action on the legislation on Wednesday. Under a short-term continuing resolution (CR) passed last month, lawmakers have until Mar. 11 to pass a government funding bill or risk a shutdown.
Job Openings Hold Above 11 million, Quits Decline Slightly
Total vacancies actually dipped a bit, falling to 11.26 million following a substantial upward adjustment in December’s numbers, the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey showed. That still left job postings 4.75 million above the total counted as unemployed for the month.
Along with the slight decline in openings came a decrease in quits, or workers voluntarily leaving their jobs. Quits declining to 4.25 million, a drop of 3.4% and the lowest number since October. As a share of the labor force, the quits rate declined to 2.8% from 3% the previous two months.
109K Job Openings in Manufacturing
Manufacturing saw a big gain in job openings, rising by 109,000 and taking the openings rate by by 0.8 percentage point. The durable goods manufacturing industry reported 85,000 more job openings. Non-durable goods openings rose by 25,000. The sector saw a total of 42,000 more quits in January (a total of 476,000) 22,000 of those were in the durable goods sector and 20,000 in non durable goods.
In January, vacancies fell in several industries, with accommodation and food services reporting a 288,000 drop. In the transportation, warehousing, and utilities industry, job openings fell 132,000, while unfilled positions in the federal government decreased 60,000. But job openings increased 136,000 in other services businesses.
US COVID – Kids and Vaccines
Children under age 5 in the US remain ineligible for vaccination against COVID-19, and a series of ups and downs regarding expected authorization for this age group has left some parents feeling abandoned, frustrated, and fearful as mask mandates and other restrictions are dropped. Additional data on a 3-dose regimen of the Pfizer-BioNTech vaccine in young children is expected this spring, and Moderna is expected to request authorization for its vaccine among young children by May.
In Florida, the state’s surgeon general on March 7 announced that the state will issue guidance recommending parents to not vaccinate their healthy children against COVID-19. Although Florida’s decision will have little impact on parents’ abilities to vaccinate their children, the recommendation breaks with US CDC guidance.
Pfizer Launches Trial to Test COVID Pill in Children
Pfizer announced Wednesday that it has started a clinical trial testing its Covid-19 antiviral pill in children as young as 6. The drugmaker said it aims to enroll approximately 140 participants in the trial, which will look at whether the drug, called Paxlovid, can safely treat Covid in children who are at risk of becoming severely ill.
Data from Pfizer’s trial in adults found the treatment to be 89 percent effective at preventing high-risk people from being hospitalized or dying from Covid.
World Bank Official Says War-Driven Oil Price Hikes to Slash Growth for Big Importers
Persistent high oil prices prompted by Russia’s invasion of Ukraine could cut a full percentage point off the growth off large oil-importing developing economies like China, Indonesia, South Africa and Turkey, a World Bank official said on Tuesday.
Indermit Gill, the bank’s Vice President for Equitable Growth, Finance and Institutions, said in a blog posting that the war will deal further setbacks to growth for emerging markets already lagging in recovery from the COVID-19 pandemic and struggling with a range of uncertainties from debt to inflation.
OSHA Hikes Penalty Amounts
In January, the Occupational Safety and Health Administration (OSHA) announced a 5% increase in the civil penalties assessed for violations of its regulations, but worse may yet come if certain legislative reforms are adopted by Congress.
As of Jan. 13, the maximum penalty for willful or repeated violations rose to $145,027, a nearly $10,000 increase from the 2021 maximum for the same violations. The maximum penalty for failure-to-abate violations increased to $14,502 for each day after the abatement deadline where no abatement has taken place. The maximum penalty allowed for serious, other-than-serious, and posting requirements violations is now $14,502, representing an increase of nearly $1,000 above the maximum amounts that had been adopted last year.
Food Crisis Grows as Spiraling Prices Spark Export Bans
A global food crisis sparked by Russia’s invasion of Ukraine escalated on Wednesday as Indonesia tightened curbs on palm oil exports, adding to a growing list of key producing countries seeking to keep vital food supplies within their borders. The conflict in Ukraine is threatening global grain production, the supply of edible oils and fertilizer exports, sending basic commodity prices rocketing and mirroring the crisis in energy markets.
World food prices rose to a record high in February to post a year-on-year increase of 20.7%, according to the United Nations food agency, while many markets have continued to climb this month. Chicago wheat futures have climbed around 60% so far this year, threatening to raise the cost of key food staples such as bread.
Here’s How Americans Think Employers Have Done on the Pandemic
According to a new survey by Willis Towers Watson, 70% of 9,600 U.S. workers from large and mid-size employers said their organizations have supported them during the pandemic. Specifically, a majority of employees said their employers have helped them stay productive (67%) and safe from COVID-19 (66%). More than half (58%) believe their employer has supported their wellbeing.
Employees differed when it comes to their views of on-site safety requirements. The majority (58%) support employer vaccinate mandates, and even more favor wearing a mask inside buildings (65%). More than half (54%) support regular COVID testing to enter the worksite.
Kremlin Will Respond to United States’ “Economic War”
The Kremlin accused the United States on Wednesday of declaring an economic war on Russia that was sowing mayhem through energy markets, and put Washington on notice it was considering its response to a ban on Russian oil and energy. The West’s attempt to cut off Russia – one of the world’s biggest exporters of oil, gas and metals – has hit commodity markets and raised the spectre of spiraling inflation across the world.
President Vladimir Putin, Russia’s paramount leader since 1999, will hold a meeting with the government on Thursday to discuss minimising the impact of sanctions, the Kremlin said.
Biden Orders First Sweeping Review of Federal Policy on Crypto
President Joe Biden on Wednesday will direct federal agencies to produce a series of reports over the coming months that will lay out the future of U.S. policy toward digital assets — including the possible launch of a federally issued digital dollar.
The wide-ranging order will kick off a process to examine the impact that rapidly evolving digital asset markets will have on consumer and investor protections, as well as on financial stability and even the climate.
EIA Inventory Report – U.S. Crude Inventory Higher than Estimates
U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ending March 4, 2022 which was 21,000 barrels per day less than the previous week’s average. Refineries operated at 89.3% of their operable capacity last week. Gasoline production increased last week, averaging 9.6 million barrels per day. Distillate fuel production decreased last week, averaging 4.6 million barrels per day.
U.S. crude oil imports averaged 6.3 million barrels per day last week, increased by 0.6 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.2 million barrels per day, 10.1% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 760,000 barrels per day, and distillate fuel imports averaged 274,000 barrels per day.
Ukraine War Tests Cyber Insurance Exclusions
The Russian invasion of Ukraine will put significant pressure on the global cyber insurance market as malicious attacks by state-linked threat actors create risk for multinational companies, critical infrastructure providers and government targets with data loss and business disruption.
Fitch Ratings said the Ukraine conflict will test the effectiveness of “war exclusion” and “hostile act exclusion” language. Contract language is under additional scrutiny following a recent court ruling in favor of Merck. The pharmaceutical giant won a major victory regarding $1.4 billion in cyber insurance claims stemming from the 2017 NotPetya attacks.
China’s 5.5% Growth Target Is a Big Reach
By the standards of China’s rip-roaring economic growth over the past 30 years, “around 5.5%”—the official target for 2022, released over the weekend—is positively leisurely. By the standards of 2022, it will be a heavy lift: Fourth-quarter growth in 2021 was just 4% year over year and the nation is still confronting a stark property slowdown and headwinds to consumption from China’s “zero-Covid” policy, which mandates tough containment measures for even limited outbreaks.
Now, new threats are arising: Rapidly rising Brent crude oil prices, now above $120 a barrel, and a likely further slowdown in global growth and trade due to the conflict in Ukraine. China’s enormous trade surpluses, which already were expected to decline this year as developed economies further reopen and shift consumption back toward services, will come under more pressure.