Member Briefing March 14, 2024
Who Still Works From Home?
Four years since the pandemic began, about 10% of all workers in the U.S. are still fully remote. the American workplace’s experiment with remote work happened, effectively, overnight: With the onset of the pandemic in March 2020, more than half of workers began working from home at least part of the time, according to Gallup. But the shift to a permanent hybrid-work reality has been gradual, with periods of tension as workers across white-collar industries pushed against executives’ return-to-office orders.
Those battles have largely come to an end, and workplaces have reached a new hybrid-work status quo. Roughly one-tenth of workers are cobbling together a combination of work in the office and from home, and a similar portion are working entirely remotely. This population of hybrid and remote workers in the United States doesn’t quite mirror the larger population of workers: Government data shows they tend to have more education and are more often white and Asian.
The New York Time has some interesting charts showing who works on site, hybrid and remote
Mortgage Rates Fall Below 7% In Rare Sign Of Relief For Homebuyers
The average 30-year fixed rate last week was 6.84% for home loans less than $766,550, according to the poll of American mortgage brokers, down 18 basis points from last week’s 7.02% and dipping below 7% for the first time since the first week of February. Mike Fratantoni, the Mortgage Bankers Association’s chief economist, explained in a statement the downward move in mortgage rates came as recent data painted a far more encouraging economic picture for the Federal Reserve to bring down interest rates. That would likely cause mortgage rates to fall as the central bank’s rates strongly influence the rates set by lenders.
Homebuying activity ramped up as mortgage rates declined, as the Mortgage Bankers Association reported a 7% increase in national mortgage applications, though Fratantoni noted total volume is down about 11% year-over-year. Mortgage rates remain significantly elevated from where they stood for much of the last two decades. The average 30-year fixed mortgage rate was about 3.8% in March 2022 and 3% in March 2021, according to federal mortgage lender Freddie Mac.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Israeli Strike in South Lebanon Kills Hamas Member – Reuters
- How the US Military Plans to Construct a Pier and Get Food Into Gaza - BBC
- Gaza Airdrops Take Huge Effort and Don’t Solve Hunger Crisis - WSJ
- Inside Israel's Allegations Against U.N. Workers in Gaza - NBC
- Biden and Netanyahu's Deepening Rift on Public Display - BBC
- Shipping Chiefs Doubt Red Sea Crisis Will be Resolved Anytime Soon – Shipping Watch
- 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
- EU Agrees 5 bln Euro Boost for Ukraine Military Aid Fund – Reuters
- Navalny’s Widow Calls for Rejection of Russian Election Results – The Hill
- Russia’s Economy Once Again Defies the Doomsayers – The Economist
- Scholz, Macron and Tusk to Meet in Berlin to Hash Out Differences on Ukraine - Politico
- Putin Rattles Nuclear Saber Ahead of Presidential Elections - WSJ
- Ukrainian Drones Damage Russian Oil Refineries in Second Day of Attacks - Reuters
- Germany’s Scholz Says Sending Taurus Missiles to Ukraine is ‘Out of the Question’ - Politico
- 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
- Haiti Violence: 'We're Living With Death on a Daily Basis' - BBC
- Japan's Space One Kairos Rocket Explodes on Inaugural Flight - NBC
- Could There Be a US-Mexico Trade War? – The Economist
- East Asian Societies Have the World’s Lowest Birth Rates - Fortune
- China Says TikTok Ban Would 'Come Back to Bite' the US - BBC
- Trump or Biden – Whom Does China Prefer? - VOA
- Nigerian Kidnappers Demand $620,000 for Release of School Hostages – Reuters
Policy and Politics
Extend Pro-Growth Tax Policies, Small Manufacturer Tells Senate
If manufacturing is a team sport, the rules of the game are the U.S. tax code—and to ensure a level playing field for everyone, that code must remain constant, Ketchie President and Owner and NAM Small and Medium Manufacturers Group Chair Courtney Silver told the Senate Finance Committee Tuesday. The main way to do it, she said, is by restoring three key tax policies: immediate expensing for domestic R&D, enhanced interest deductibility and full expensing.
Thanks to the 2017 Tax Cuts and Jobs Act, Silver’s family-owned, North Carolina–based precision machining company and many other manufacturers were able to grow their companies, invest in workers and give back to their communities, Silver said in testimony during the “American Made: Growing U.S. Manufacturing Through the Tax Code” hearing. But two years ago, “the rules of the game began to change, making it more difficult for manufacturers to thrive in America,” she went on. “Manufacturing truly is a team sport, and you are all on that team,” Silver told the committee. “Small companies like mine are counting on you to play with us rather than against us, and to ensure that our tax code does the same.” The NAM has called on the Senate to advance the House-passed Tax Relief for American Families and Workers Act, which would restore three key tax policies.
'It All Begins Now': One-House Budgets Set Stage for Housing Battle
The Senate and Assembly's one-house budgets dropped late Monday and Tuesday morning, respectively, setting the tone for upcoming budget talks. The proposals show lawmakers' priorities to build more housing units align more with Hochul's than this time last year, but they continue to clash on the details of tax incentives and the need for stronger tenant protections. "I feel like I do every year – it all begins now," Hochul told reporters Tuesday in Albany.
State senators proposed a $246.2 billion budget, or $13.2 billion more than Hochul's spending plan released in January. Lawmakers in the upper house want new tax breaks for developers similar to New York City's expired 421a program to build more affordable units. Senators also earmarked $250 million to create a new state entity to fund developments on state-owned land. Assemblymembers did not reach a consensus on subsidies for developers in their one-house budget, but proposed $500 million each to support existing Mitchell-Lama developments and the Foundations for Futures program to support homeownership and create limited equity cooperative housing on state- and municipal-owned sites.
Read more at NY State of Politics
House Passes Bill to Ban TikTok or Force Salee
The House voted overwhelmingly to approve a bill on Wednesday that would ban TikTok from operating in the U.S. or force a sale, with lawmakers largely shrugging off a last-minute lobbying push by the Beijing-owned service and setting the stage for a final showdown in the Senate, where lawmakers have been cooler on the legislation. The measure passed the House 352 to 65, with one member voting present, showing broad bipartisan support for cracking down on TikTok over national-security concerns. The legislation calls for TikTok’s parent ByteDance to divest itself or the platform will be banned from app stores and web-hosting services in the U.S.
The popular short-video app has faced scrutiny over the way its algorithm works to select content for users, both on sensitive issues like teen depression as well as on contentious global debates like the Israel-Hamas war. U.S. officials say TikTok’s Chinese ownership potentially gives Beijing a way to both collect data on Americans and influence public opinion, driving years of efforts to crack down on the app and culminating in the new legislation. Opponents of the bill said the government shouldn’t be in the business of banning businesses and raised free speech concerns.
Health and Wellness
Why Covid Patients Who Could Most Benefit From Paxlovid Still Aren’t Getting It
A recent JAMA Network study found that sick people 85 and older were less likely than younger Medicare patients to get covid therapies like Paxlovid. The drug might have prevented up to 27,000 deaths in 2022 if it had been allocated based on which patients were at highest risk from covid. Nursing home patients, who account for around 1 in 6 U.S. covid deaths, were about two-thirds as likely as other older adults to get the drug.
Shrunken confidence in government health programs is one reason the drug isn’t reaching those who need it. In senior living facilities, “a lack of clear information and misinformation” are “causing residents and their families to be reluctant to take the necessary steps to reduce covid risks,” said David Gifford, chief medical officer for an association representing 14,000 health care providers, many in senior care.
Election 2024
- Biden and Trump Clinch Nominations, Setting the Stage for a Grueling General Election Rematch - WSJ
- Joe Biden vs. Donald Trump Marks First U.S. Presidential Election Rematch Since 1956 - AP
- Yahoo News/YouGov Poll: No State of the Union Bump for Biden - Yahoo
- 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
U.K. Economy Returned to Growth in January
The U.K. economy returned to growth in January, after contracting in the second half of last year, as rising real wages boosted spending by British shoppers. Britain’s economy was weaker than most of its peers last year, and was the only member of the Group of Seven large rich countries to see a contraction in both of the final two quarters. A sustained return to growth would add to signs that global growth is becoming more broadly spread, after being largely driven by the U.S. last year.
Gross domestic product in the U.K. rose by 0.2% compared with December, according to figures published Wednesday by the Office for National Statistics, marginally more than the 0.1% expected by economists polled by The Wall Street Journal. In December, the economy contracted by 0.1%.
Alcoa Signs Binding Deal to Acquire Australia’s Alumina for $2.2 Billion
Alcoa AA -2.30%decrease; red down pointing triangle said it has agreed to acquire Alumina AWC -2.76%decrease; red down pointing triangle in a deal that values the Australian company’s equity at roughly $2.2 billion, concluding weeks of talks over an offer that will help to cement the U.S. company as one of the world’s largest bauxite and alumina producers. “We believe the time is right to combine our two companies,” Alumina Chairman Peter Day said in a statement Tuesday. The combined group will have a larger and stronger balance sheet, and will be better able to fund restructuring and growth plans, he said.
Pittsburgh-based Alcoa’s pursuit of joint-venture partner Alumina represents a bet on commodities expected to play an essential role in the energy transition, with aluminum used in large quantities to manufacture electric vehicles and renewable-power infrastructure. Alcoa and Alumina said they entered into a binding-scheme implementation deed after Alcoa last month announced it would offer 0.02854 of its own stock for each Alumina share.
The Success of US Chip Manufacturing Hinges on Our Electric Grid
In 2022, the White House signed the CHIPS and Science Act into law. The legislation made a historic $52 billion investment in American semiconductor research, manufacturing and workforce development. Over a year later, new projects are facing construction delays and permitting issues, raising concerns over efforts to expand domestic manufacturing despite legislative support. Worse yet, the country might be unable to generate enough electricity to power new fabrication plants, leaving billions of dollars in federal funds stranded and one of its most critical supply chains vulnerable.
While manufacturing semiconductors has always been energy-intensive, the process is becoming even more so as chips are developed to be smaller and more powerful. The most advanced semiconductors require extreme ultraviolet (EUV) lithography machines, which use ultraviolet light produced by rapid-fired lasers to burn fine details on silicon wafers. The Dutch company ASML, the only company producing these machines, just tripled its orders from manufacturers last quarter, indicating that the semiconductor industry is trending towards chips that use this technology. However, these machines consume 10 times as much power as earlier generations of equipment. Due to the vast amount of power needed to run EUVs, TSMC now consumes more electricity than some U.S. states.
Bezos Earth Fund Invests $60 Million In Centers To Improve Alternative Meats
The Bezos Earth Fund—a Jeff Bezos-backed philanthropic initiative fighting climate change—announced Tuesday it was investing $60 million to create centers that will focus on targeting challenges in biomanufacturing and “invent(ing) our way out of climate change,” according to the Fund’s vice chair and Bezos’ fiancee, Lauren Sanchez. The $60 million is part of the Bezos Earth Fund’s $1 billion commitment to transforming food and agriculture systems in an effort to reduce greenhouse gas emissions.
The Bezos Centers for Sustainable Protein will attempt to advance science and technology to address “major technological barriers to reducing cost, increasing quality, and boosting nutritional benefit of alternative proteins,” according to the Fund’s press release. The centers will be tied to universities and will be set up over the next five years, director of Future of Food Andy Jarvis, told Bloomberg.
Musk Says 'Deutschland Rocks!' After Visit to Arson-Hit Tesla Plant
Elon Musk on Wednesday visited Tesla's European gigafactory in Gruenheide, Germany, where operations had resumed after an arson attack on a nearby electricity pylon last week led to a costly power outage that halted production. The Tesla chief executive, who was pictured at the German factory wearing a black T-shirt that read "We are (Giga) the future," shouted "Hey, Deutschland rocks! Dig in Berlin for the win!" as he walked out of the factory and got into a car.
Tesla's factory on the outskirts of Berlin was reconnected to the grid on Monday after the March 5 arson attack, claimed by far-left activists. In a post on X, Musk thanked employees for their efforts: "Thanks to the hard work of the Tesla Giga Berlin team and support from the community, the factory is back online!" The attack southeast of the German capital set an electricity pylon close to the site ablaze, but the fire did not spread to the Tesla facility - the U.S. electric vehicle maker's first manufacturing plant in Europe.
Ozempic And Wegovy Rivals: Here Are The Companies Working On Competitor Weight Loss Drugs
The stellar success of blockbuster drugs like Ozempic, Wegovy, Mounjaro and Zepbound has companies eager to break into the lucrative weight loss drug market — here are the hopeful rivals preparing to challenge Eli Lilly and Novo Nordisk for dominance in the obesity drug gold rush.
- Danish biotech Zealand Pharma and German drug company Boehringer Ingelheim are jointly developing survodutide.
- San Diego-based Viking Therapeutics marked itself as a serious competitor in the weight loss drug market last month.
- Terns Pharmaceuticals is developing an oral weight loss drug targeting the GLP-1 hormone.
- San Francisco startup Structure Therapeutics is also working on an oral GLP-1 drug.
- Maryland-based Altimmune released promising mid-stage trial results for injectable drug pemvidutide—which is in the same class as Wegovy, Ozempic, Zepbound and Mounjaro.
- U.S. pharma giant Pfizer has said the company is determined to “play and win” in the obesity space, with plans to develop danuglipron as a once-daily formulation to ease side effects.
Demographics Spur Worker Shortage in Defense, Aerospace
The latest stats from EY3, gathered with the Aerospace Industries Association (AIA) and the American Institute of Aeronautics and Astronautics (AIAA), on the state of the A&D manufacturing workforce show the sector is experiencing the same sort of workforce and skills gaps as the wider manufacturing sector.
As many as 69% of A&D manufacturing respondents strongly agree or agree that their organization’s turnover has significantly increased within the last 12 months, typifying the intense competition and lack of readily available labor. Across current workforces there is a strong skew towards older employees: In terms of workforce age composition, survey results showed that employees aged 55 and older represent over a quarter of the workforce (28%), the highest of any age demographic.
Read more at Military Embedded Services
US Commercial Services Leads Delegation to Hannover Messe 2024 Trade Show April 22-26
The US Commercial Service invites you to join the world’s leading industrial and engineering trade fair for mechanical, electrical, digital and energy sectors. Hannover Messe 2024 will showcase an interconnected industrial ecosystem of the future. Hannover Messe is the leading industry event showcasing the latest solutions for the whole manufacturing value-adding chain, from industrial production to logistics, to industrial energy systems. With an emphasis on Industry 4.0, Hannover Messe’s exhibitors of leading technology providers from around the world, attract more than 200,000 attendees from a variety of industrial sectors including manufacturing, capital goods, mechanical engineering, automotive, and many more. Manufacturers who are looking to upgrade their production, come to Hannover Messe to find the latest solutions, learn from industry best practices, and to see upcoming trends that will help them make informed decisions on how to meet their current and future needs. Hannover Messe is owned and organized by Deutsche Messe AG (DMAG), which is an official partner of the U.S. Department of Commerce. More than 100 U.S. companies exhibited at Hannover Messe 2023.
Services for U.S. exhibitors at Hannover Messe:
- Take advantage of our virtual export promotion services.
- Free Export Promotion Counseling Sessions before, during, and after the show.
- Information on how to protect new designs you may be showing, and to take expedited action against foreign exhibitors who copy your design and trademarks. Please see important information about trademark and design protection at German trade fairs on our website: Germany Events IPR.
- Introduction to an International Trade Specialist at your nearest U.S. Commercial Service office in the United States.
Learn more at the US Department of Commerce
Florida Exceeds 25,000 Manufacturers in State, TaxWatch Report Finds
Florida's manufacturing sector has enjoyed significant growth, with the state now hosting some 25,000 manufacturing firms employing over 426,000 workers with an average wage of nearly $75,000. The growth underscores the state's efforts to become a manufacturing leader, though policymakers acknowledge more needs to be done to boost productivity in the state. While Florida ranked 12th in the United States for manufacturing gross domestic product, the report details areas that still need improvement.
Florida ranked 31st for productivity. That means there was an average of $178,367 in economic output per employee. That comes out to about $40,000 less than the national average of $218,271 in revenue per employee. Still, the growth in manufacturing jobs in the past decade was impressive. Florida saw manufacturing sector jobs jump from 326,300 in 2013 to 422,800 in 2023. That’s an increase of about 9,600 new jobs every year.