Member Briefing May 15, 2024
Top Story
Today is Hudson Valley Gives – A Chance to Donate to Your Favorite Hudson Valley Non-Profits
Hudson Valley Gives began nine years ago with what Elizabeth ‘Biz’ Rowley, one of its founders, described as “an idea, a hope and a dream.” What was once just a concept, has evolved into a fundraiser that has raised approximately $3.5 million for a diverse group of nonprofit organizations in Orange, Sullivan, Ulster, Putnam, Dutchess, Rockland, and Westchester counties. Participating non-profits are all 501(c)3 Charitable organizations. The 24-hour event, which is driven by social media, is set for today, May 15th. Donations through the Hudson Valley Gives online portal to charitable nonprofit organizations are tax-deductible and cannot be refunded. Contributions may be made via credit and debit card only. Donations will be received and receipted by GiveGab, a nonprofit giving platform that helps nonprofits to raise money, engage donors and manage volunteers quickly and efficiently.
Wholesale Inflation Surges Again. PPI Up 0.5% in April
The producer price index, a gauge of prices received at the wholesale level, increased 0.5% for the month, higher than the 0.3% Dow Jones estimate, the Labor Department’s Bureau of Labor Statistics reported Tuesday. Stripping out volatile food and energy prices, the core PPI also rose 0.5% compared with the 0.2% Dow Jones estimate. Excluding trade services from that core group showed a 0.4% increase on the month and 3.1% on a 12-month basis, the highest level since April 2023. On a year-over-year basis, wholesale inflation rose 2.2%, also the highest in a year. The core PPI inflation was at 2.4%, the biggest annual move since August 2023.
Services prices boosted the wholesale inflation reading, rising 0.6% and accounting for about three-quarters of the headline gain. Goods prices as measured by the PPI rose 0.4%, reversing a 0.2% decline, led by a 2% increase in the energy index, which included a 5.4% surge in gasoline prices. The final demand index for food fell 0.7%.
NFIB: Inflation Continues to Hinder Small Business Operations
NFIB’s Small Business Optimism Index rose by 1.2 points in April to 89.7, marking the first increase of this year but the 28th consecutive month below the 50-year average of 98. Twenty-two percent of owners reported that inflation was their single most important problem in their business, down three points from March but still the number one problem for small business owners. Key findings include:
The net percent of owners who expect real sales to be higher rose six points from March to a net negative 12% (seasonally adjusted).
A seasonally adjusted net 12% of owners reported planning to create new jobs in the next three months, up one point from March’s lowest level since May 2020.
A net 26% (seasonally adjusted) of owners plan price hikes in April, down seven points and the lowest reading since April of last year.
Forty percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up three points from March, which was the lowest reading since January 2021.
The net percent of owners raising average selling prices fell three points from March to a net 25% seasonally adjusted.
Fed Survey: CEO Inflation Expectations Increased in 2024:Q2
According to April’s Survey of Consumer Expectations from the New York Federal Reserve Bank, which came out Monday, consumers expect annual inflation to be around 3.3% a year from now. That’s up three-tenths of a percentage point from March and the highest it’s been since November. Another note of gloom in the survey data: Consumers think their income growth will lag behind inflation.
The survey also notes that consumers expect their household spending to rise, but Wells Fargo senior economist Tim Quinlan pointed out that many people are relying on credit cards to maintain their level of spending. “And I think when you’re kind of dipping into credit every month to sustain the spending, it doesn’t feel good,” Quinlan said. Especially when consumers are less certain that their earnings will grow as much as they had expected in the coming year. And they’re holding on to their jobs: The survey also finds consumers say they’re less likely to quit. Quinlan said people are picking up on a slight loosening in what had been a very tight labor market.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Israel’s Rafah Offensive Strains 45 Years of Peace With Egypt - WSJ
- Israeli Tanks Push Into Gaza's Rafah, as Battles Rage in the North – Reuters
- Israel’s ‘Total Victory’ in Gaza is Unlikely, Top US Official Says – Politico
- On Independence Day, Many Israelis Ask: ‘What’s to Celebrate?’ - WSJ
- Israeli Protesters Block Aid Trucks Destined for Gaza - BBC
- US Calls on Iran to Halt Unprecedented Weapons Transfers to Yemen’s Houthis for Attacks on Ships - AP
- Palestinian Truckers Fear for Safety After Aid Convoy for Gaza Wrecked - Reuters
- 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
- U.S. Says Weapons Are ‘On the Way’ to Help Repel Russian Onslaught - CNBC
- Russia Says Troops Enter Border Town Near Kharkiv - BBC
- Putin’s Choice of New Defense Chief Reveals Strategy Ahead of Summer Offensive – Politico
- Xi Offers Putin Political Relief With China State Visit - Newsweek
- The Misfits Russia Is Recruiting to Spy on the West - WSJ
- We Won’t Sell Ukraine Down the River, Insists UK Defense Chief – Politico
- NATO Member Denmark Gives Ukraine F-16 Arrival Update - Newsweek
- 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
- New Singapore PM Lawrence Wong's Test: Change With Continuity – Nikkei Asia
- Russia Just Found Huge Oil Reserves in Antarctica on UK Territory - Newsweek
- UK Summons Chinese Ambassador to Complain About Spying – Politico
- Why Protesters in Georgia are Opposed to a 'Foreign Agents' Law and Why it Matters - NPR
- Brawl Erupts in Georgia Parliament Ahead of Vote Passing Foreign Agents Law - BBC
- Japan Sees Need for Sharp Hike in Power Output by 2050 to Meet Demand from AI, Chip Plant - Reuters
- Haiti's Notorious Gang Leader, Barbecue, Says his Forces Are Ready for a Long Fight - NPR
- Mexico Election 2024: Claudia Sheinbaum Holds Wide Lead in Latest Poll - Reuters
Policy and Politics
US Proposes New Round of Tariffs on Chinese Goods, Cites 'Unfair' Policies
U.S. President Joe Biden on Tuesday unveiled a bundle of steep tariff increases on an array of Chinese imports including electric vehicles, computer chips and medical products, risking an election-year standoff with Beijing in a bid to woo voters who give his economic policies low marks. China immediately vowed retaliation. Its commerce ministry said China was opposed to the U.S. tariff hikes and would take measures to defend its interests, urging the United States to cancel the measures. Administration officials said their measures are "carefully targeted," combined with domestic investment, plotted with close allies and unlikely to worsen a bout of inflation that has already angered U.S. voters and imperiled Biden's re-election bid. They also downplayed the risk of retaliation from Beijing.
Biden will keep tariffs put in place by his Republican predecessor Donald Trump while ratcheting up others, including a quadrupling of EV duties to over 100%, the White House said in a statement. It cited "unacceptable risks" to U.S. economic security posed by what it considers unfair Chinese practices that are flooding global markets with cheap goods. The new measures affect $18 billion in Chinese imported goods including steel and aluminum, semiconductors, batteries, critical minerals, solar cells and cranes, the White House said. U.S. Trade Representative Katherine Tai said prior "Section 301" tariffs had minimal impact on U.S. economy-wide prices and employment, but had been effective in reducing U.S. imports of Chinese goods, while increasing imports from other countries. But Tai recommended tariff exclusions, for dozens of industrial machinery import categories from China, including 19 for solar product manufacturing equipment.
Fed’s Powell Downplays Potential for a Rate Hike Despite Higher Price Pressures
Federal Reserve Chair Jerome Powell said Tuesday that the central bank is unlikely to raise its key interest rate in response to signs of stubborn inflation and underscored his view that price increases would soon start to cool again. Yet Powell, during a panel discussion in Amsterdam, said his confidence that inflation will ease “is not as high as it was” because price increases have been persistently hot in the first three months of this year. Powell stressed that the Fed’s preferred approach was to keep its benchmark rate at its current two-decade peak rather than increase it.
Powell spoke hours after a report on U.S. producer prices showed that wholesale inflation picked up in April. On Wednesday, the government will issue the latest monthly report on consumer inflation, which is expected to show that price growth cooled a bit last month. The Fed chair also acknowledged that the economy “is different this time” because so many Americans refinanced their mortgages at very low rates before the Fed began raising borrowing costs in March 2022. Many large businesses also locked in low rates at that time. “It may be,” he said, that the Fed’s rate policy “is hitting the economy not quite as strongly as it would have if those two things were not the case.”
US Bans Imports of Russian Uranium for Nuclear Fuel
President Biden late Monday signed a bipartisan bill that bans U.S. imports of Russian uranium for use in nuclear fuel. In a written statement, national security advisor Jake Sullivan said that the move both “reestablishes America’s leadership in the nuclear sector” and also “delivers on multilateral goals” the U.S. set with its allies. The legislation makes it illegal to import low-enriched uranium, which is used in nuclear fuel, 90 days after its enactment.
The majority of uranium that powers U.S. nuclear plants is imported, and about 12 percent of those imports came from Russia in 2022. the measure to ban those imports had widespread support in Congress. “Banning imports of Russian uranium will jumpstart America’s nuclear fuel industry, further defund Russia’s war machine, and help revive American uranium production for decades to come. ” said Sen. John Barrasso (R-Wyo.), in a written statement.
Health and Wellness
Surveys Show Workplace Mental Health Remains a Challenge for Employers
Recent surveys have found that throughout the year, employers may be missing the boat when it comes to meeting their employees’ mental health needs. Littler’s 12th Annual Employer Survey, for example, found that 74% of employers report an increase in employee requests for leaves of absence or accommodations for mental health-related issues since last year. However, just 22% of employers say they have changed their related policies—a clear disconnect.
“Though the pandemic may be in the rearview mirror for most purposes, many employers are still seeing its lasting effects in the form of vastly increased accommodation requests, particularly related to mental health,” Littler’s Devjani Mishra said. Littler’s findings on employee mental health come at the same time as a recent Monster poll that found that about three out of four (74%) workers say their mental health at work is negative. As for the factors driving that, 62% blame a toxic work culture, while 53% of workers cite a bad manager. Nearly half blame layoff fears or the current economy for their stress, while 43% equally cite a lack of growth opportunities and an increased workload.
Election 2024
- Protest Vote: Why 22% Chose Haley Over Trump in Indiana GOP Primary – Newsweek
- Ron DeSantis is Planning to Raise Money for Donald Trump in Florida and Texas - AP
- Morning Consult Poll – Trump Leads Biden by 1 Point - Forbes
- Heastie Visits Incumbents Facing Left-Wing Primary Challenges – City & State
- 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
Baltimore Bridge Span Demolished with Controlled Explosives to Free Cargo Ship
Crews in Baltimore "successfully" detonated controlled explosives on Monday to remove a large section of the collapsed Francis Scott Key Bridge from the bow of cargo ship Dali that struck the bridge in March, officials said. The planned demolition occurred shortly after 5 p.m. Monday after weather conditions, including high winds and lightning, delayed the operation over the weekend.
Videos of the demolition showed the small explosives detonating and releasing puffs of smoke into the sky before steel trusses appeared to break apart and fall into the water. The operation marked a major "milestone" in efforts to clear the Port of Baltimore's 700-foot-wide, 50-foot-deep Fort McHenry Channel, Scott added. The demolition will allow crews to re-float the Dali and free it from the channel, which will help restore maritime traffic through the critical port
Machine Tool Orders Rise, but Still Trail 2023
New orders for CNC machine tools rose 24.9% from February to March, up to $435.69 million in the latest total reported by AMT - the Assn. for Manufacturing Technology in its monthly U.S. Manufacturing Technology Orders report. Even so, the new result falls -21.3% below the March 2023 figure, and the 2024 year-to-date total for manufacturing technology orders at $1.13 billion falls -18.6% below last year’s January-March new-order total. In its comment on the March results AMT observed that the Federal Reserve Bank’s lack of action to reduce interest rates – recognizing persistent high inflation – and a strong labor market have been limiting business expansion activity, and thus weighing against new order activity by machine shops and other manufacturers.
Typically, the highest volume of MT orders is received from ‘contract machine shops,’ and according to the March result that segment’s orders rose in March to the highest level in the past year, and yet remain -11.3% less than in March 2023. A better indicator comes from manufacturers of electrical generation and power-transmission equipment, whose new MT orders rose to their highest result since March 2023. That continues a trending upward since last September, which AMT attributed to government investments in alternative energy technologies. AMT also predicted that sector may become a reliable source of growth in manufacturing technology orders on the strength of alternative-energy sector demand.
Read more at American Machinist
UK Mining Giant Anglo American to Offload De Beers Diamond Business
UK mining giant Anglo American has announced plans to break up the business after rejecting a £34bn bid from rival BHP. The company said it will sell or demerge major parts of the firm including its De Beers diamond operation and its platinum division. Anglo American said the "radical changes" will allow it to focus on key areas such as copper, premium iron ore and crop nutrients. Demand for copper, which is used to conduct electricity, is growing as some countries make the shift to renewable energy and electric vehicles.
A deal with Australian firm BHP would create the world's largest copper producer but could face significant competition hurdles. Anglo owns two copper mines, in Chile and Peru, where BHP also has some operations. Anglo has rebuffed two bids by BHP and on Tuesday laid out its own strategy which it hopes will be backed by its shareholders. These include governments in Botswana, as well as in South Africa, which initially gave a frosty response to BHP's approach. The Australian giant had proposed splitting off Anglo's platinum mining arm, Amplats, as well as its Kumba Iron Ore business.
Why the World Has Gone Cuckoo for Copper
BHP Group’s record nearly $43 billion takeover bid for Anglo American, which was rejected Monday, puts a fresh spotlight on the intense demand for copper. While London-listed Anglo produces a range of commodities, from diamonds to nickel, Australia’s BHP has made clear that it most prizes the company’s copper assets. Anglo rebuffed BHP’s first offer last month, and other companies are believed to be weighing rival bids. “Copper of course is the story of the day,” Chief Executive Duncan Wanblad said.
For the U.S., the current frenzy highlights the importance of its yearslong effort to build up supplies of the metals and minerals critical to the green-energy transition. Demand for copper is expected to rise as certain mines close or scale back production. Copper futures are up 20% this year. The U.S. doesn’t have a ministry for mining, a sovereign wealth-fund or much of a domestic mining industry. That has put it at a disadvantage with China, which can direct its state-owned enterprises to invest heavily no matter how commodity prices are performing. The U.S. government is limited in how much money it can directly pump into projects of national security. That means it must work with private companies at home and abroad, as well as friendly countries with sovereign-wealth funds, to entice them to invest in assets helpful to national interests.
Apple Defeats Union Campaign at New Jersey Retail Store. But Maryland Store Union Workers Vote to Strike
Apple employees at a New Jersey retail store have voted against joining a union, potentially stifling momentum for a push to organize the tech giant's workforce nationwide. Workers at the store in Short Hills, New Jersey, voted 57-41 against joining the Communication Workers of America (CWA) union in an election that ended on Saturday, according to a tally from the National Labor Relations Board. It was the first union election at an Apple store since 2022, when workers at a pair of stores in Maryland and Oklahoma voted to unionize.
Meanwhile workers at the first Apple Store to unionize have now also authorized a first strike against the tech giant’s retail operations. Apple Store workers in Towson, Maryland, voted late Saturday to authorize a strike, according to a statement from the International Association of Machinists and Aerospace Workers’ Coalition of Organized Retail Employees, which represents the workers. No date was set for the strike. The vote followed what the union called “over a year of negotiations with Apple management that yielded unsatisfactory outcomes.”
Read more at Reuters and The AP
NAM Chimes in on Southern Boarder Supply Chain Disruptions
Last week the NAM sent a letter to the presidents of the U.S. and Mexico expressing concerns that recent measures taken by federal and state governments have arbitrarily halted, delayed or throttled the flow of commercial goods crossing the border into the United States.
“We write to convey our deep concern about recent supply chains disruptions that have harmed businesses and manufacturers on both sides of the United States-Mexico border. Unfortunately, certain federal and state government actions, taken in the context of the ongoing migrant crisis, risk making critical supply chains between the United States and Mexico less resilient and dependable. Specifically, our organizations are concerned that recent measures… have arbitrarily halted, delayed, or throttled the flow of commercial goods crossing the border into the United States. These actions include the sudden closing of ports of entry for undefined periods of time and increasing the inspections of vehicles crossing the border. Such actions have significantly increased congestion around ports of entry, caused delays to crossborder trade, and harmed productive businesses across industries and their employees. We therefore respectfully urge your administrations to commit to adopt clear, predictable, and transparent measures and processes that eliminate the uncertainty surrounding possible interruptions of cross border trade….”
CHRO Outlook Shows Caution Ahead Of Election
The Latest Chief Human Resources Officer Confidence Index poll data finds America’s people chiefs bracing for turbulence in the workplace as U.S. presidential election looms. After jumping 13 percent at the start of the year, CHROs’ forecast for business 12 months out dipped slightly in the second quarter, shedding 1.5 percent from its one-year high in Q1, to 6.7 (on a scale of 1-10, where 1 is “Poor” and 10 is “Excellent”). Still, at that level, the leading indicator remains well above its second-half readings of 2023 and is in line with where it was at this time last year.
45 percent of the CHROs polled are tapering their forecasts for the year ahead, betting on the idea that business conditions will be about the same by this time in 2025. The numbers are fairly unchanged from what was found in the Q1 polling earlier this year, but they contrast with what CEOs told sister publication Chief Executive last week, when we asked them the same question: 49 percent said they expect conditions to improve over the coming year—and 29 percent expect them to stay the same.
Panama Canal Oceangoing Transits Rise in April as Water Conditions Improve – OPIS
Oceangoing transits at the Panama Canal rose to the highest level in seven months as water conditions at the global waterway have improved. Oceangoing transits in April totaled 789 vessels, 42 higher than March, but 289 below the April 2023 number, according to the Panama Canal Authority's latest data.
The April transit total was the highest since October when 1,003 oceangoing vessels moved through the canal. The compares with 783 in November, 748 in December and 702 in January. Panama Canal oceangoing transits in February were at just 662 vessels. Daily transits of cargo vessels and tankers in April averaged just under 27, with an average of about 15 cargo ships and 12 tankers, according to data compiled by the International Monetary Fund.
Crude Oil Price Forecast – Crude Oil Continues to Build Up Pressure
Oil prices settled lower on Tuesday, after U.S. data stoked concerns that interest rates may stay high, but potential risks to supply from Mideast tensions and wildfires in Canada put a floor under prices. Brent crude futures settled down 98 cents, or 1.18% at $82.38 a barrel. U.S. West Texas Intermediate crude futures (WTI) settled down $1.10, or 1.39% at $78.02 a barrel. U.S. producer prices increased more than expected in April in large part due to higher energy prices, feeding fears the Federal Reserve may keep borrowing costs elevated to fight inflation.
Meanwhile on Tuesday, the Organization of the Petroleum Exporting Countries stuck to its forecast for relatively strong growth in global oil demand in 2024 and said there was a chance the world economy could do better than expected this year. OPEC's monthly report said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.