Member Briefing March 13, 2023
Manufacturing Loses 4,000 Jobs in February
Manufacturing lost 4,000 jobs last month, the Bureau of Labor Statistics said today. Durable goods employment was little changed while non-durable goods absorbed the bulk of the job loss, according to a breakdown by sector issued by the bureau. Job gainers included transportation equipment, up 1,300 jobs. That included a gain of 200 jobs in motor vehicles and parts. Non-metallic mineral products added 1,500 jobs and computer and electronic products added 2,800. Industries posting job losses included furniture, down 2,800 jobs, and wood products, down 1,000.
Manufacturing totaled 12.983 million jobs on a seasonally adjusted basis in February, according to the bureau. That was down from an adjusted 12.987 million in January but better than the 12.654 million in February 2022.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Russian Advance Stalls in Ukraine’s Bakhmut, Think Tank Says - AP
- Ukraine, Russia say Hundreds of Enemy Troops Killed in Battle for Bakhmut - Reuters
- India Oil Purchases and Sanctions on Russian Oil – Bloomberg
- Russia, UN Set For Ukraine Grain Deal Renewal Talks – Barron’s
- Russia Tests Ukraine’s Defenses With a Rarely-Used Missile - CNN
- How Ukraine Tamed Russian Missile Barrages and Kept the Lights On – The Economist
- Biden Says the U.S. and Ukraine Are United. Cracks are Starting to Show. - Politico
- Moldova Police Say They Foiled Russia-Backed Unrest Plot - AP
- Russian Orthodox Head Appeals Against Eviction of Church From Kyiv - Reuters
- Head of Wagner Mercenaries Announces Bid to Run for Ukraine Presidency – TRT News (Turkey)
- 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
Manufacturing Job Openings Inch Up
The number of manufacturing job openings in January was 803,000, up from December’s 797,000, according to the Bureau of Labor Statistics. Manufacturers hired 417,000 workers in January, an increase from 405,000 in December.
- Total separations—quits, firings, layoffs and retirements—increased to 399,000 from December’s 384,000.
- Net hiring—hiring minus separations—totaled 18,000 in January. This is down from 32,500, the net-hiring average for the past year.
- January’s numbers are down from the average of the past year, 844,750, which is well above pre-pandemic levels.
- January saw more openings at nondurable goods firms than at durable goods firms.
- Total quits in the manufacturing industry were nearly unchanged in January, slipping slightly to 260,000 from December’s 263,000.
- Overall manufacturing quits have dipped since peaking in March 2022.
Read more at the Bureau of Labor Statistics
NFIB Jobs Report: Small Businesses Report Record High Levels of Job Openings
Forty-seven percent (seasonally adjusted) of small business owners reported job openings they could not fill in the current period, according to NFIB’s monthly jobs report. The percent of small business owners reporting labor quality as their top small business operating problem remains elevated at 21%, down three points from January. Labor cost reported as the single most important problem to business owners increased two points to 12%, down one point below the highest reading of 13% reached in December 2021.
A seasonally adjusted net 17% of owners are planning to create new jobs in the next three months, down two points from January and 15 points below its record high reading of 32 reached in August 2021, showing that the trend in planned hiring is on the decline. Sixty percent of owners reported hiring or trying to hire in January, up three points from January. Of those hiring or trying to hire, 90% of owners reported few or no qualified applicants for the positions they were trying to fill. Thirty percent of owners reported few qualified applicants for their open positions.
US COVID – Down, Down, Down
The US CDC is reporting:
- 5 million cumulative cases
- 1 million deaths
- 226,618 cases week of March 1 (down from previous week)
- 2,290 deaths week of March 1 (down from previous week)
- 9% weekly decrease in new hospital admissions
- 9% weekly decrease in current hospitalizations
The Omicron sublineages XBB.1.5 (90%), BQ.1.1 (6.7%), and BQ.1 (2%) currently account for a majority of all new sequenced specimens, with various other Omicron subvariants accounting for the remainder of cases.
Read more at the Johns Hopkins Center for Health Security
NYS COVID Update – Declining Cases
The Governor updated COVID data through March 10.
- Daily: 14
- Total Reported to CDC: 78,834
- Patients Currently in Hospital statewide: 1,508
- Patients Currently in ICU Statewide: 148
7 Day Average Positivity Rate - Cases per 100K population
- Statewide 2.39% - 6.17 positive cases per 100,00 population
- Mid-Hudson: 1.36% - 5.28 positive cases per 100,00 population
House Votes 419 to 0 for Declassification of Intelligence on Covid-19 Origins
The House on Friday voted 419 to 0 to pass a bill requiring the Biden administration to declassify intelligence related to potential links between the Wuhan Institute of Virology in China and the Covid-19 pandemic. Sponsored by Sens. Josh Hawley (R., Mo.) and Mike Braun (R., Ind.), the Covid Origins Act of 2023 passed the Senate by unanimous consent last week. It now heads to President Biden’s desk for his signature. The White House hasn’t issued a formal position on the bill.
If the bill that passed the House Friday is signed into law, the Director of National Intelligence would have 90 days to declassify the information about the lab’s research and activities related to the Covid-19 outbreak, including details about any researchers who fell ill in the fall of 2019. The legislation allows the director to make redactions “necessary to protect sources and methods.”
What To Know About Silicon Valley Bank’s Collapse—The Biggest Bank Failure Since 2008
Silicon Valley Bank collapsed in spectacular fashion Friday just days after it announced big losses, failing at attempts to raise funds or seek out a buyer, and creating the biggest bank failure in the United States since the Great Recession. SVB reported $212 billion in assets for the fourth quarter of 2022, making it the second-largest bank failure in U.S. history, second only to Washington Mutual, whose 2008 failure came as the bank had roughly $300 billion in assets.
After the tech industry grew during the pandemic, SVB’s clients deposited billions, bringing the bank from $60 billion in total deposits at the end of the first quarter 2020 to nearly $200 billion two years later. While deposits came in, SVB invested in debt like U.S. Treasuries and mortgage-backed securities, but as the Federal Reserve began to increase interest rates to combat inflation, the value of SVB’s investments fell. Higher interest rates also took a toll on SVB’s clients: Startup funding began to dry up as private fundraising became more costly, causing its clients to withdraw funds. Amid the surge in withdrawals, SVB sold assets (including bonds that had lost value due to interest rate increases) which created $1.8 billion in losses.
US-Mexico Economic Ties Tested by Cross-Border Tensions
The kidnapping of four American health care tourists in Mexico, which resulted in two of their deaths, has rattled an already shaky political detente across the Rio Grande. The incident has left U.S.-Mexico relations at a quarter-century nadir, with nationalistic rhetoric coming from both sides of the border, even as the two countries work toward economic integration.
Since the 1990s, the two economies have blended into a symbiotic relationship that’s only been strengthened as U.S. relations with China have soured and as trans-Pacific trade showed its limitations during and after the pandemic. According to the U.S. Census Bureau, U.S.-Mexico trade in goods during 2022 amounted to nearly $780 billion. While the United States ran a $130 billion deficit during this period, Mexico is both a major exporter and a major market for its northern neighbor.
New York State Pay Transparency Law Amendments Signed into Law
On March 3, 2023, a bill amending the New York State pay transparency law was signed into law by Gov. Hochul, reflecting changes that the governor requested in exchange for her approval of the law in December 2022. The effective date of the amendments are the same as the original version of law, Sept. 17, 2023. Notable changes include:
- The geographic scope of the law has now been slightly limited. The standard is no longer whether work “can or will be performed” in New York State. Instead, the law will now apply to advertisements for “a job, promotion, or transfer opportunity that will physically be performed, at least in part, in the state of New York, including a job, promotion, or transfer opportunity that will physically be performed outside of New York but reports to a supervisor, office, or other work site in New York.”
- The employer records keeping requirement has been removed from the law. Although prudent employers should still maintain records, it is no longer required under this law.
- “Advertise” is now defined as “to make available to a pool of potential applicants for internal or public viewing, including electronically, a written description of an employment opportunity,” which closely mirrors other pay transparency laws around the state.
As a reminder, employers subject to the pay transparency law are broadly defined to include nearly every entity with four or more employees, as well as agents and recruiters. Only temporary help firms, as defined under New York State Labor Law § 916(5), are exempt.
Read more at Bond Schoeneck & King
US Weekly Jobless Claims Post Largest Increase in Five Months
The number of Americans filing new claims for unemployment benefits increased by the most in five months last week, but the underlying trend remained consistent with a tight labor market. Initial claims for state unemployment benefits rose 21,000 to a seasonally adjusted 211,000 for the week ended March 4, the Labor Department said on Thursday. That was the largest increase since October and lifted claims to a two-month high.
Claims had stayed below 200,000 for seven straight weeks, indicating that high-profile job cuts in the technology sector had not had a material impact on the labor market. Unadjusted claims shot up 35,357 to 237,513 last week. They were boosted by a 16,363 jump in filings in New York and a 10,489 surge in California. There also notable rises in applications in Kentucky, Oregon and Ohio. But claims in Rhode Island and Massachusetts fell significantly.
More Women Join the Manufacturing Workforce
Fresh off International Women’s Day last week there’s some encouraging news on the labor front: more women are coming back to the workforce in manufacturing a Female employment in the industry reached its height this year, with a total of 3.77 million workers, according to NAM calculations based on BLS numbers. Women now account for 29% of the manufacturing workforce.
Female workers last edged higher than men on U.S. payrolls in late 2019, before the pandemic sent nearly 12 million women out of jobs, compared with 10 million men. The child-care disruptions and health concerns that made many women leave the workforce during the pandemic are diminishing, while employers offer historically high pay and increasing numbers of remote positions.
U.S., EU Try to Defuse Subsidies Dispute to Focus on Russia and China
The U.S. and Europe agreed Friday to new steps aimed at resolving a spat over subsidies for clean-energy technology, an effort to preserve a trans-Atlantic relationship that had strengthened following Russia’s invasion of Ukraine. After a meeting at the White House, President Biden and European Commission President Ursula von der Leyen announced new initiatives to smooth over some of those concerns. They said they would formally begin talks on a new trade deal focused on critical raw materials, a step designed to allow minerals from Europe to meet a sourcing requirement for the electric-vehicle subsidies under the Inflation Reduction Act.
The two leaders also discussed Europe’s own new plans to subsidize clean-energy technology. Biden administration officials had largely shrugged off earlier European demands to limit U.S. subsidies for clean energy, instead encouraging the EU to strengthen its own subsidies. The European Commission, the bloc’s executive body, announced those plans on Thursday, saying they would make it easier for governments to offer tax breaks and other benefits to clean-tech companies and in some cases allow them to match subsidies offered in the U.S. or elsewhere
Holding Excess Inventory Keeps Getting Pricier for this Manufacturer
A year ago, the global supply chain was a tangled web of backups amid China’s pandemic lockdowns and skyrocketing shipping costs. For manufacturers today, those woes are starting to disappear in the rearview mirror as China has ended its Zero-COVID policy and the Port of Los Angeles has seen zero backups since Nov. 22, 2022, according to the Marine Exchange of Southern California.
The snags for big manufacturers are now happening more stateside, with rail delays and rising warehouse costs keeping companies on their toes. The Producer Price Index for the delivery and warehouse industries has jumped since last summer. For the Legacy Companies, a manufacturer and retailer of kitchen supplies and appliances, the story’s no different. Marketplace’s Kai Ryssdal interviews Teresa Asbury, president of Legacy Companies’ commercial division to learn about its impacts
Imports to Slowly Climb
After February saw one of the lowest levels since the beginning of the pandemic, import cargo volume at the nation’s major container ports is expected to begin slowly climbing again this month, according to the Global Port Tracker report released today by the National Retail Federation and Hackett Associates.
U.S. ports covered by Global Port Tracker handled 1.81 million Twenty-Foot Equivalent Units in January, the latest month for which final numbers are available. That was down 16.5% year over year but up 4.4% from December for the first month-over-month increase since last August. Ports have not yet reported February numbers, but Global Port Tracker projected that the month dropped to 1.56 million TEU, down 13.6% from January and down an unusually large 26.2% from a year earlier. That would make it the slowest month since 1.53 million TEU in May 2020, when many factories in Asia and most U.S. stores were closed due to the pandemic.
Read more at Material Handling & Logistics
General Motors is Offering Buyouts in an Effort to Cut $2 Billion in Costs
General Motors is offering buyouts to salaried employees in the U.S. and some global executives in order to cut $2 billion in costs over the next two years as the Detroit automaker makes the transition to electric vehicles. CEO Mary Barra said in a statement Thursday that the "voluntary separation program" will be offered until March 24 and is a step that will help avoid "involuntary actions" later.
The buyouts will be offered to salaried employees with at least five years of time at GM, as well as to global executives with at least two years. The company has some 58,000 employees on salary in the U.S. It is unknown how many employees GM is targeting for the buyouts. General Motors initially announced the $2 billion in trims in January, with the company saying it expected between 30% and 50% in savings in 2023.
Biden’s Budget Proposal Calls for $5 Trillion in New Taxes
President Biden went big in his $6.8 trillion annual budget proposal to Congress by calling for $5 trillion in tax increases over the next decade, more than what lawmakers expected after the president downplayed his tax agenda in earlier meetings. In October of 2021, when Biden was trying to nail down a deal with Sen. Joe Manchin (D-W.Va.) on the Build Back Better agenda, he proposed a more modest $2 trillion in tax increases.
Biden’s budget calls for increasing the corporate income tax to 28% from the current 21% and for a minimum 25% tax on American households worth over $100 million, which would more than triple the 8% rate the wealthiest 0.01% currently pay. Biden’s budget raisesthe top payroll tax rate to 39.6%, up from 37%, on Americans making more than $400,000 annually and married couples earning more than $450,000 a year.