Member Briefing March 2, 2022
Invasion of Ukraine Headlines
- Ukraine’s Kharkiv Front Line Holds Despite Bombardment – WSJ
- Long Lines at ATMs in Russia as Ruble Collapses – WSJ
- Western Envoys, Allies Walk out on Lavrov Speech to UN Rights Forum – Reuters
- Stocks Fall, Oil Again Tops $100 Amid Sanctions – WSJ
- Bipartisan Calls Grow for End to Russian Oil Imports – The Hill
- Nations Agree to Release 60M Barrels of Oil Amid Russian War – AP
- Russia Warns Kyiv Residents to Fee Homes – Reuters
- Russia Used Powerful Vacuum Bomb on Ukraine, Envoy Says – Politico
- Shipping Costs Rise, Transport Tightens as War Escalates in Ukraine – IndustryWeek
- Russia Eyes Sanctions Workarounds in Energy, Gold, Crypto – AP
- Map – Tracking Russia’s Invasion of Ukraine – The Economist
What Can You Do to Help the People of Ukraine?
There are numerous charitable organizations serving the people of Ukraine that need financial help, and many of them are included in an updated U.S. Agency for International Development resources page (link below)
- Save the Children, which is providing food, blankets and other necessities for youngsters in Ukraine
- International Committee of the Red Cross, which is providing food, water and essential items, as well as supporting health care facilities
- International humanitarian organization Care.org, where funding is going toward food, water and hygiene kits to those in Ukraine
- Domestic refugee resettlement agencies involved in refugee services in the United States and Europe, such as the International Rescue Committee and others working with the U.N. High Commissioner for Refugees
Drivers of Inflation: The New York Fed DSGE Model’s Perspective
After a sharp decline in the first few months of the COVID-19 pandemic, inflation rebounded in the second half of 2020 and surged through 2021. This post analyzes the drivers of these developments through the lens of the New York Fed DSGE model. Its main finding is that the recent rise in inflation is mostly accounted for by a large cost-push shock that occurred in the second quarter of 2021 and whose inflationary effects persist today.
Based on the model’s reading of historical data, this shock is expected to fade gradually over the course of 2022, returning quarterly inflation to close to 2 percent only in mid-2023. The DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process.
State of the Union- Key Takeaways from Biden’s Speech
President Joe Biden faced a formidable challenge in his first State of the Union speech, after a year in office buffeted by the COVID-19 pandemic, a jittery economy and now Russia’s invasion of Ukraine. Biden served notice on Tuesday that much of the world is united against Russian aggression while also trying to seize the moment to try to make Americans feel optimistic about the days ahead.
Major themes were: Unity on Russia, A New Phase of COVID, A Long Term Plan for Inflation, Fighting Crime.
US COVID – CDC: 140 Million Americans have had Coronavirus
About 140 million Americans have been infected with the SARS-CoV-2 virus through the end of January, according to an estimate from the Centers for Disease Control and Prevention (CDC). The data for the study was collected from late December to late January and relied on tests of nearly 72,000 samples.
The percentage of individuals who have antibodies to COVID-19, known as seroprevalence, is 43.3 percent for the total U.S. population, the CDC study found, much higher than regularly cited infection rates. The percentage of those with antibodies to the virus was lower in older age groups, with children having a seroprevalence of about 58 percent compared to 23 percent for those over the age of 65, the study found.
ISM: U.S. Manufacturing Activity Regains Speed in February; Hiring Slows
U.S. manufacturing activity picked up more than expected in February as COVID-19 infections subsided, though hiring at factories slowed, contributing to keeping supply chains snarled and prices for inputs high. The Institute for Supply Management (ISM) said on Tuesday that its index of national factory activity increased to a reading of 58.6 last month from 57.6 in January, which was the lowest since November 2020.
The ISM survey’s forward-looking new orders sub-index increased to 61.7 last month from 57.9 in January, which was the lowest reading since June 2020.
Mental Health, Addiction go Hand in Hand—and COVID is Making Both Worse
For the past few years, mental health has been a growing focus among organizations, many of which see firsthand their employees struggling with burnout, anxiety, stress and depression. But there’s an often-overlooked part of the mental health equation: addiction problems.
Employers, and many of the benefits they offer, have historically fallen short in helping employees cope with addiction. Even less is done on education and awareness initiatives about the issue. says Cheryl Brown Merriwether, vice president and executive director of the International Center for Addiction and Recovery Education, known as ICARE. “The root of this is stress. People are in distress, they’re depressed, they’re anxious.” she says.
Empire Center Report: Single Payer Would More Than Double That Taxes in NY
The tax hike necessary to finance a statewide single-payer health plan would be the largest in state history and have unpredictable and potentially harmful effects for the state’s entire economy, according to a new report from the Empire Center for Public Policy. The report analyzes the tax consequences of New York Health Act, which would switch all state residents into a single state-operated and taxpayer-financed health plan.
Although the legislation lacks specifics on how much the proposed plan would cost or where the money would come from, it’s clear that that it would push New York’s already heavy tax burden to unprecedented heights.
AG James Demands Cost Hike Explanation from Con Edison
Attorney General Letitia James has set her sights on Con Edison after the energy company unexpectedly raised prices this winter, with some customers seeing their rates double. Assistant Attorney General Kate Matuschak, a top official in the attorney general’s Consumer Fraud and Protection Bureau, criticized Con Edison in a letter sent Monday for nearly tripling the prices in January compared to December. Consumers, the letter said, received no notice of the increased costs.
“We are reviewing the letter and look forward to a dialogue with the Office of the Attorney General,” Con Edison said in a statement Monday. “While supply costs and weather related increases in energy use are outside of our control, we do control our billing process and are looking to mitigate future supply cost volatility for our customers. We also offer energy-saving tips, energy efficiency programs that help customers save, and assistance for customers who have fallen behind on their bills.”
Russian Invasion of Ukraine – Impact on Domestic Gas & Power
The Russia-Ukraine conflict is driving crude oil prices to $100/bbl. Will the crisis impact U.S. natural gas and power prices? Historically, high crude prices encourage more crude output, and with it comes associated natural gas, providing downward pressure on the fuel. Today however, many drillers are publicly stating that that they will not increase production and will pour the profits into stock buybacks and dividends, even at $150/bbl to $200/bbl.
Disruptions to European gas supply may add bullish sentiment with greater interest in U.S. LNG exports. Associated gas accounted for about 15 percent of overall U.S. gas production in 2020. The Permian region of western Texas and Eastern New Mexico produces about 50% of U.S. associated gas.
Much of the “Great Resignation” Driven by Part-Timers
New research from economists at the Chicago Federal Reserve and the University of Texas offers a surprising insight: Much of the labor shortage comes from part-time workers and those accustomed to working on and off, who have checked out of the labor force more than any other group.
This group tends to reflect people who wouldn’t mind the extra income of a job but don’t need it to survive, study author and Chicago Fed Senior Economist Jason Faberman told the news outlet. These include students, retirees, the disabled and spouses whose job would represent a second income. Offering higher pay might well draw these part-time workers back into the labor force. “The study shows that desired pay rose more for those out of the labor force than it did for those working.
Target to Pay Entry Level Wages as High as $24 an Hour Based on Region and Job
In a statement on Monday, the Minneapolis-based retailer said that the new minimum wage will range from $15 to $24, depending on the job and local market. The system is also part of Target’s plan to spend an additional $300 million on its labor force, which includes expanded access to health care coverage and an enhanced benefits package for employees. The latest initiative comes after Target in 2017 announced that it would raise its hourly minimum wage to $15 by 2020, making it one of the first major retailers to do so, according to The Associated Press
“We want all team members to be better off for working at Target, and years of investments in our culture of care, meaningful pay, expanded health care benefits and opportunities for growth have been essential to helping our team members build rewarding careers,” Target’s chief human resources officer, Melissa Kremer, said in a statement.
Companies Seize On March as a Moment to Reopen the Office
After two years of remote work, companies including American Express Co. AXP -7.54% , Facebook parent Meta Platforms Inc. and Wells Fargo & Co. plan broader office reopenings in March. Many executives say they are uncertain about what the future may hold, but feel confident that offices can at least reopen this month as Omicron cases fall and health authorities loosen mask guidance.
Many companies, including Cisco, are leaving it up to teams and managers to determine when and how often employees come into the office. Bosses are preaching flexibility, careful not to alienate employees who have come to appreciate the upsides of remote work.
Supreme Court Justices Lean Toward Limiting EPA’s Authority
The Supreme Court on Monday appeared poised to narrow the Environmental Protection Agency’s authority to reduce carbon pollution from power plants, a move that could further derail President Joe Biden’s ambitious plans to fight climate change that have already suffered a setback in the Senate.
The court’s conservative majority spent much of Monday’s arguments probing the extent of EPA’s authority, with Justice Samuel Alito at one point arguing that EPA essentially sought unfettered power over major parts of the economy. “What your interpretation of the statute claims for EPA is not a technical matter,” he told Solicitor General Elizabeth Prelogar. “It is not a question of how to reduce emissions from particular sources, but you are claiming that the interpretation gives you the authority to set industrial policy and energy policy.”