Member Briefing March 29, 2022

Posted By: Harold King Daily Briefing,

Invasion of Ukraine Headlines

U.S. Goods Trade Deficit Narrows; Retail Inventory Accumulation Slows

The U.S. trade deficit in goods narrowed in February after setting a record high in the prior month as exports rebounded, but any lift to economic growth this quarter could be offset by businesses slowing their pace of inventory accumulation. The deficit fell 0.9% to $106.6 billion. Exports increased 1.2% to $157.2 billion. The rebound in exports was led by a 6.3% surge in shipments of consumer goods. Food exports accelerated 3.6%, while industrial supplies increased 2.6%. But motor vehicle exports dropped 3.4% as production continued to be hampered by a global semiconductor shortage. There were also substantial declines in exports of capital goods and other goods.

Imports of goods gained 0.3% to $263.7 billion. They were curbed by a 9.9% decline in imports of motor vehicles as well as a 3.0% drop in food imports. But there were strong increases in imports of industrial supplies and other goods.

Read more at US News

Negotiations Continue,  But Here is What’s in or Out of the 2022 State Budget as of Today?

Albany Democrats are running out of time to negotiate a state budget before an April 1 deadline, especially considering the litany of controversial proposals before them. A lot comes down to how the three most powerful people in state politics – Gov. Kathy Hochul, Assembly Speaker Carl Heastie and state Senate Majority Leader Andrea Stewart-Cousins – will compromise on key issues with the June primaries looming.

Significant differences remain between the governor and the Democratic supermajorities in the state Senate and Assembly, but chances are they will approve a spending plan that meets their deadline, or at least come within a few days like past years. The seemingly impossible has become true in previous budget cycles once the governor, speaker and Senate majority leader really talked fiscal turkey. The coming days will show what’s on the menu this time around.

Here’s where City & State says things stand today

Administration Budget Proposal Calls for Increase in Defense Spending

President Biden on Monday released a $5.8 trillion budget that envisions $813 billion for defense spending in fiscal year 2023,  a roughly 4% increase from the $782 billion enacted for this fiscal year and a sign of the administration’s willingness to devote additional resources to military programs, including aiding Ukraine in its fight against Russian aggression.

Mr. Biden’s budget also emphasizes efforts to reduce the deficit and fund law-enforcement efforts at the Justice Department. That is a departure from last year’s request outlining a massive boost in spending on domestic programs and detailed financial blueprint for Mr. Biden’s sweeping education, social and climate-change agenda. In Monday’s proposal, the White House largely glosses over that agenda, which has stalled in Congress.

Read more at the WSJ

US COVID – Coronavirus in the U.S.: Latest Map and Case Count

Reports of new coronavirus cases in the United States are still declining, though the pace of improvement has slowed in recent days. Most states continue to see sustained declines, and cases remain at their lowest levels nationally since last July.
Coronavirus hospitalizations also continue to fall. In the past two weeks, hospitalizations have decreased by 39 percent to around 20,000 per day.

Several states in the Northeast and the South have seen cases increase over the past two weeks as the BA.2 subvariant has emerged. In New York, Connecticut and Arkansas, cases are up by more than 20 percent. Fewer than 1,000 deaths are currently being reported each day, the lowest daily average since before Omicron took hold. More than 970,000 deaths have been attributed to Covid-19 in the United States.

Read more at the New York Times

The FDA is Expected to Authorize 2nd Boosters for People 50 and Up

Anyone 50 years and older could soon be eligible for a second booster dose of the Moderna or Pfizer-BioNtech COVID-19 vaccine. The Food and Drug Administration is expected to authorize the additional booster shots without holding a meeting of its independent vaccine advisors. The plan comes as evidence increases that protection from three shots is fading and a fourth shot would help boost immunity back up. 

“We have a large number of people who are at least four to six months past their third shot,” says Dr. Eric Topol, founder and director of the Scripps Research Translational Institute, who supports the move. But others question the plan. The vaccines are still doing a good job of protecting people from getting seriously ill. Critics say there just isn’t enough evidence yet that another shot is needed and that it would provide stronger protection that would last.

Read more at NPR

Costs of Going Unvaccinated in America are Mounting for Workers and Companies

Vaccine hesitancy likely already accounts for tens of billions of dollars in preventable U.S. hospitalization costs and up to hundreds of thousands of preventable deaths, say public health experts.  For taxpayers, it could mean a financial drain on programs such as Medicare, which provides healthcare for seniors.

For individuals forgoing vaccination, the risks can include layoffs and ineligibility to collect unemployment, higher insurance premiums, growing out-of-pocket medical costs or loss of academic scholarships. For employers, vaccine hesitancy can contribute to short-staffed workplaces. Some employers are looking to pass along a risk premium to unvaccinated workers, not unlike how smokers can be required to pay higher health premiums. One airline said it will charge unvaccinated workers $200 extra a month in insurance.

Read more at Reuters

5 Things to Know About Coronavirus Vaccines for Young Children

Parents of children under five have faced months of waiting for a coronavirus vaccine, with the occasional moments of hope getting snatched away. But there are some signs of progress on a COVID-19 vaccine for the youngest children, the only age group where the vaccine is not currently available.  

Vaccination rates have been lagging among the group of children where the vaccine is already available, though, with only about a quarter of children 5-11 fully vaccinated.  So while some parents are anxiously awaiting the vaccine for young kids, others will be in no hurry. Here are five things to know.

Read more at The Hill

NYS Website Launched with Resources for Ukrainians and How New Yorkers Can Help

Governor Hochul last week announced the launch of a new website containing resources offered by New York State and its partners to help Ukrainian people and their friends and allies here in New York. This directive comes amid Governor Hochul’s ongoing efforts to support Ukraine.

Last week, the Governor announced an Executive Order to prohibit state agencies and authorities from contracting with entities that continue to do business in Russia. In early March, Governor Hochul announced actions to strengthen the Department of Financial Services’ (DFS) enforcement of sanctions against Russia, including the expedited procurement of additional blockchain analytics technology. In February, Governor Hochul ordered all state agencies and authorities to divest public funds from Russia and stop doing business with Russian companies.

China is Shutting Down Shanghai in Two Phases to Control COVID

Shanghai, a city of 26 million people on the southeastern coast of China, began a two-stage lockdown Monday as authorities attempt different strategies to maintain growth, while trying to control the country’s worst Covid-19 outbreak since the pandemic began.  The city is a hub for finance and international business in the country. The city is also home to the world’s largest container-shipping port.

The Shanghai Stock Exchange remains in operation. The exchange announced Sunday night that stock issuance applications and other paperwork can be done online, with deadline relaxations as needed. Tesla, whose Shanghai factory is located in the area covered by the first stage of the lockdown, reportedly halted production for at least a day on Monday.

Read more at CNBC

Daimler Truck Sees ’22 Growth Around 15% in North America

Daimler Truck’s North American business in 2021 posted sales of about $17.5 billion versus $15.4 billion the year before. Adjusted EBITDA was about $1.6 billion, up about 40% from the year before thanks both to rising sales – a little more than 162,000 units versus nearly 140,000 in 2020 – and higher prices. Globally, Daimler Truck earned adjusted EBITDA of about $2.8 billion on revenues of more than $44 billion.

For 2022, the Daimler team is forecasting North American unit sales of 175,000 to 195,000 and an adjusted return on equity of 10% to 12%. The company – which spun out of Daimler AG late last year – is pushing through a large price increase and may need to return to customers this year with another one if input costs continue to climb. CFO Jochen Goetz said that only a minimal number of customers have adjusted their orders in response to price hikes, which he said is a sign of the very strong underlying demand for trucks.

Read more at IndustryWeek

Apple is Reportedly Already Cutting iPhone SE Production Plans by 20 Percen

According to a report from Nikkei Asia, Apple will be making 20 percent fewer iPhone SEs in the next quarter than it originally planned and 10 million fewer AirPods for all of 2022. Noted analyst Ming-Chi Kuo provided specific numbers in his note about the demand for the SE, saying that he expects Apple to ship 15 to 20 million SEs in 2022, as opposed to his previous estimate of 25-30 million (that’s somewhere between a 22 and 66 percent decrease for the year).

The reports don’t point to supply chain issues or chip shortages, which have plagued much of the electronics industry, as the reason for Apple walking back its production plans. Instead, they cite lower-than-expected demand for Apple’s latest budget-focused phone.

Read more at the Verge

Amazon 1 – Second Alabama Amazon Union Vote Count Began Monday

The National Labor Relations Board will start sifting through the ballots beginning today. Approximately 6,100 were mailed out to employees in Bessemer in February. The vote will determine whether employees want to be represented by the Retail, Wholesale & Department Store Union (RWDSU).

Workers previously voted by mail from early February through late March of last year on the same question. Amazon convincingly won that vote, with 1,798 voting no on unionization, and 738 voting yes.  Only about 12.5% of the eligible workers at Amazon’s Bessemer fulfillment center actually voted to unionize, even after an election period that lasted for almost two months. That showing also came after weeks of national media coverage and public shows of support that went all the way to President Joe Biden.


Amazon 2 – NYC Amazon Workers Begin Voting in Historic Union Election

Amazon workers at the company’s JFK8 Staten Island warehouse started casting ballots on Friday on whether to form a union as labor organizers look to New York for the first-ever union victory in the retail giant’s 28-year history. The Push to  organize is spearheaded by a group of workers known as the Amazon Labor Union (ALU). In-person voting at JFK8 will last until March 30, with votes set to be counted on March 31.

“Whichever way they vote, I’m happy to see it happen,” Smalls said. Workers at the company’s other warehouse in Staten Island, LDJ5, will also vote in person on whether to unionize starting on April 25, according to a National Labor Relations Board election notice.

Read more at The NY Post