Member Briefing March 7, 2022

March 7, 2022

Posted By: Harold King in Daily Briefing,

Invasion of Ukraine Headlines

EU, US Discuss Banning Russian Oil Imports – Brent Spikes to $139

Oil prices spiked to their highest levels since 2008 on Monday as the United States and European allies weighed a Russian oil import ban and delays in the potential return of Iranian crude to global markets fuelled supply fears. In the first few minutes of trade Brent crude reached $139.13 and U.S. West Texas Intermediate (WTI) hit $130.50, both benchmarks striking their highest levels since July 2008. By 1017 GMT, prices had lost some of those gains, with Brent up $6.60, or 5.6%, at $124.71 per barrel, and WTI up $6.67, or 5.8%, at $122.35.

The United States and European allies are exploring banning imports of Russian oil, U.S. Secretary of State Antony Blinken said on Sunday, and the White House coordinated with key Congressional committees moving forward with their own ban.

Commerce: U.S. Factory Orders Beat Expectations in January

The Commerce Department said on Thursday that factory orders rose 1.4% in January. Data for December was revised sharply higher to show orders gaining 0.7% instead of falling 0.4% as previously reported. Economists polled by Reuters had forecast factory orders would rebound 0.7%. In January, there were increases in orders for machinery and transportation equipment. Orders for computers and electronic products were unchanged. Orders for electrical equipment, appliances and components fell.

Manufacturing is being underpinned by businesses rebuilding inventories, though tight supply chains remain a constraint. Supply bottlenecks could worsen after the Russian invasion of Ukraine. Russia and Ukraine are producers of key materials used to manufacture semiconductors, whose scarcity around the global is hampering motor vehicle production.

U.S. Employment: Strong Jobs, Mfg Up 36K, Wage Pressure Eases

February payroll rose 678K. Unemployment fell to 3.8% from 4.0%, Average hourly earnings were unchanged, well below the consensus, 0.5%. Job gains were concentrated in the services sector, up 549,000, with leisure and hospitality up 179,000, Construction saw an outsized 60,00 jump, and manufacturing added 36K. Payrolls are still some 2.1 million below the pre-Covid level, and a massive 7.5 million below the level we would have expected in the absence of the pandemic.

Participation rose a tenth to 62.3%, a new post-Covid high. The trend clearly is rising, propelled – perhaps – by the ongoing effect of school/childcare reopening, and the end of enhanced/extended unemployment benefits back in September. Rundown of savings among less well-off people might also be prompting some people to return to the labor market. Participation is still well below the pre-Covid level, but the established upward trend is a relief. The zero increase for average hourly earnings surprised many analysts. The trend recently has been about 0.6% per month, and solid. The softness is uneven, with average hourly earnings declining outright in finance, utilities, mining and manufacturing, but rising sharply in retail, information services, and transportation. Most see this as a seasonal blip and expect wages to increase again in March.

February Manufacturing Job Gains Breakdown

Most of the growth in manufacturing employment was in durable goods industries despite losses in transportation equipment. Fabricated metal products manufacturers saw the most dramatic growth last month, adding 10,500 new workers. Gains there and in machinery, which took on 8,300 new employees, served to offset the 18,000 jobs lost in motor vehicles and parts manufacturing, which made up the bulk of the approximately 20,700 jobs lost in transportation equipment.

Nondurable goods production added 16,000 new jobs, almost half in its largest section, food manufacturing. Food, beverage, and tobacco companies made up 7,200 of the jobs gained in nondurable manufacturing, followed by 4,300 in miscellaneous nondurable goods, 3,100 in paper and paper products, and 1,600 in petroleum and coal products. Estimated job losses were recorded in the chemicals (1,600 jobs) and printing sectors (about 200). Manufacturing currently employs about 12.6 million people in the United States—approximately 12,607,000, according to the Bureau of Labor Statistics.

US COVID – “Sharp Decline”

The US CDC is currently reporting 78.9 million cumulative cases of COVID-19 and 950,112 deaths. Daily incidence continues its sharp decline, down from a record high of 807,843 new cases per day on January 15 to 56,253 on March 1. Daily mortality appears to have peaked on February 2 at 2,627 deaths per day, down to 1,674 on March 1.

The US has administered 691 million cumulative doses of SARS-CoV-2 vaccines. Daily vaccinations continue to decline. The number of daily vaccinations is at its lowest level since late December 2020, right after the vaccines were authorized. A total of 253.7 million individuals have received at least 1 vaccine dose, which corresponds to 76.4% of the entire US population. A total of 215.8 million individuals are fully vaccinated, which corresponds to 65% of the total population.

NYS Vaccine and COVID Update – Under 2% Positive Rate

Vaccine Stats as of March 6:

One Vaccine Dose

89.1% of all New Yorkers – 16,410,152 (plus 3,500 from a day earlier).
In the Hudson Valley 1,706,417 (plus 388).

Fully Vaccinated

75.7% of all New Yorkers – 14,679,971 (plus 5,253).
In the Hudson Valley – 1,495,549 (plus 456).

Boosters Given

All New Yorkers – 7,172,482
In the Hudson Valley – 853,412

The Governor updated COVID data through March 6. There were 12 COVID related deaths for a total reported of 69,418

Hospitalizations:

Patients Currently in Hospital statewide: 1,507.
Patients Currently in ICU Statewide: 269

7 Day Average Positivity Rate – Cases per 100K population

Statewide 1.56% – 9.59 positive cases per 100,00 population
Mid-Hudson: 1.72% – 8.58 positive cases per 100,00 population

Useful Websites:

Senate Republicans Push to End Covid-19 Emergency Declaration

Senate Republicans passed a measure backing the termination of the government’s two-year-old emergency declaration on the Covid-19 pandemic, taking advantage of several Democratic absences in the 50-50 chamber. The measure passed Thursday 48-47 along party lines, and it is unlikely that it will get a vote in the Democratic-controlled House. If it were to pass both chambers, the White House promised a veto by President Biden, saying the measure would “abruptly curtail the ability of the Administration to respond to the Covid-19 pandemic.”

The emergency, first declared in March 2020 by then-President Donald Trump, allows the administration to use the National Emergencies Act to activate special executive powers. The administration has used it to suspend the payment deadlines for student loans, close ports of entry and extend customs deadlines, among other efforts. Kansas Republican Sen. Roger Marshall, who led the resolution, said repealing the declaration would “deliver a symbolic victory to our citizens that normalcy is around the corner and that limited government and our constitutional rights still reign supreme.”

Disparities in COVID-19 Vaccination Coverage Between Urban and Rural Counties

To better understand COVID-19 vaccination disparities between urban and rural populations, CDC analyzed county-level vaccine administration data among persons aged ≥5 years who received their first dose of either the Pfizer-BioNTech or Moderna COVID-19 vaccine or a single dose of the Johnson & Johnson COVID-19 vaccine during December 14, 2020–January 31, 2022. COVID-19 vaccination coverage with ≥1 doses in rural areas (58.5%) was lower than that in urban counties (75.4%) overall, with similar patterns across age groups and sex. Coverage with ≥1 doses varied among states: 46 states had higher coverage in urban than in rural counties, one had higher coverage in rural than in urban counties.

COVID-19 vaccine primary series completion was higher in urban than in rural counties. However, receipt of booster or additional doses among primary series recipients was similarly low between urban and rural counties. Compared with estimates from a previous study of vaccine coverage among adults aged ≥18 years during December 14, 2020–April 10, 2021, these urban-rural disparities among those now eligible for vaccination (aged ≥5 years) have increased more than twofold through January 2022, despite increased availability and access to COVID-19 vaccines. Addressing barriers to vaccination in rural areas is critical to achieving vaccine equity, reducing disparities, and decreasing COVID-19–related illness and death in the United States.

A Guide to Fast-Moving Russian Sanctions and Export Controls

Over the past week, the Biden Administration has announced unprecedented sanctions and export controls against Russia in response to its unprovoked invasion of Ukraine. While the new sanctions act as a sword against the Russian Federation and a shield for the people of Ukraine, they also pose a minefield for US citizens engaged in international business or seeking to provide humanitarian assistance to Ukraine in its time of need. A misplaced step could lead to civil or criminal enforcement by a variety of agencies responsible for monitoring U.S. exports and international financial transactions.

An understanding of the law in this area, and of the agencies that enforce it, can help you help Ukraine while avoiding regulatory action.

Jobless claims: 215,000 Americans Filed New Claims Last Week

Initial jobless claims improved more than expected in the latest weekly data to reach a two-month low, as the U.S. labor market recovery pressed ahead while Omicron-related disruptions retreated.

Initial jobless claims, week ended Feb. 26: 215,000 vs. 225,000 expected and an upwardly revised 233,000 during prior week.
Continuing claims, week ended Feb. 19: 1.476 million vs. 1.420 million expected and a downwardly revised 1.474 million during prior week.

The overwhelming majority of labor market data and anecdotal remarks from companies have underscored a job market that remains incredibly tight. Demand for workers has far outpaced supply, and job openings have held near record levels. This has created a situation in which employees maintain a significant amount of leverage — and have seen considerable wage increases — while the labor supply-side constraints have contributed to economy-wide inflationary pressures.

Hong Kong’s Covid-19 Measures Pressure Finance in Asian Financial Hub

Hong Kong’s most recent measures to combat Covid-19 are unsettling its large community of bankers and investors, many of whom were already struggling to square business and family commitments with severely curtailed travel.

Some financial professionals have asked employers whether they can relocate, while a few expatriates have decided in recent months to resign and move home. Others are considering options that could split up their families for months or more as they try to move their children into more stable schooling and away from the risk of mandatory quarantine.

Google Tells Employees at U.S. locations to Return to Offices in April, Twitter Flexible

Google said it will end the voluntary work-from-home period and start having employees in the Bay Area and several other U.S. locations return to the office starting the week of April 4. Google said it expects most workers to come into the office three days a week and have two days of remote work.

Twitter will reopen its offices in the middle of this month, though employees will still be allowed to work remotely, according to an email from CEO Parag Agrawal to staffers. Twitter told employees in the early days of the pandemic two years ago that they could work remotely “forever” if they wanted to. New CEO Agrawal said he’ll still honor that policy, but he warned that “distributed working will be much, much harder” and said “there will be lots of challenges.”

‘Shields Up’ on Cybersecurity in Wake of Ukraine Conflict

Fears of cybersecurity attacks are mounting in the wake of the Russian invasion of Ukraine. From the war itself, a number of malware variants have been created and are circulating on the internet. In addition, with the stiff economic sanctions, Russian state-sponsored criminal organizations are seeking to accumulate more Bitcoin or other cryptocurrencies using techniques such as ransomware.

In the past, these crime syndicates generally tried to avoid critical infrastructure, for fear of reprisals, but it is no longer certain if that forbearance is still being practiced or if we are entering a new phase in cybercrime.

Judge in NY Redistricting Case Declines to Halt New York’s Elections, Leaves Door Open

A judge on Thursday rejected Republicans’ requests to immediately pause this year’s New York election process. But he did float the possibility of eventually rejecting the lines that were approved by the state Legislature in early February and ordering new maps to be drawn in time for special elections in every congressional and state Senate seat in 2023.

“It is highly unlikely that the new viable map could be drawn and be in place within a few weeks or even a couple of months,” said state Supreme Court Judge Patrick McAllister in Steuben County. “I believe the more prudent course would be to allow the current election process to proceed, then if necessary, provide for new elections next year.”

Convoy Protesting COVID Mandates Begins D.C. Circuit

A large group of truck drivers and their supporters who object to Covid-19 mandates began their mobile protest in the Washington, D.C., area Sunday, embarking on a drive designed to snarl traffic and make their objections known to lawmakers. Their plan was to drive onto the Capital Beltway, circle it twice and then return to Hagerstown, news outlets reported.

The “People’s Convoy” follows similar demonstrations by truckers in Canada upset at vaccine requirements to cross the Canadian border. The Washington Post reported that convoy organizer Brian Brase intends for protesters to travel on the beltway every day during the upcoming week until its demands are met.