Member Briefing May 18, 2023

Posted By: Harold King Daily Briefing,

Biden, McCarthy Push Forward Towards Deal on US Debt Ceiling

President Joe Biden and top U.S. congressional Republican Kevin McCarthy on Wednesday underscored their determination to reach a deal soon to raise the federal government's $31.4 trillion debt ceiling and avoid an economically catastrophic default. After a monthslong standoff, the Democratic president and the speaker of the House of Representatives on Tuesday agreed to negotiate directly on a deal.

The two-way conversation streamlines the prior five-way format of the past week that included the three other top congressional leaders. Biden left on Wednesday for the Group of Seven summit of world leaders Friday through Sunday in Hiroshima, Japan. Asked by reporters at the Capitol whether it's possible to reach a debt ceiling deal by the time Biden returns from Asia on Sunday, McCarthy replied, "It's doable."

Read More at Reuters

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Pattern For Progress Migration Report: Hudson Valley Gained 60,000 People from NYC Since the Pandemic

A new set of data released by the federal government shows that rural counties in the Hudson Valley continued to gain people from migration during the heart of the Covid-19 pandemic, but suburban counties lost population as people with high incomes and job flexibility moved away from density. The new migration data were released by the Internal Revenue Service (IRS) in late April 2023.

The data confirm that a wave of people from New York City moved into the region. A total of 45,890 people from New York City moved into the region during the latest reporting period; and 14,642 left the Hudson Valley for the five boroughs during that time. Our region gained a net of 31,248 people from New York City in the latest IRS data. The previous year’s migration data showed a net inflow of 33,394 people from the city. While the data do not show how many stayed from the first wave, it is fair to estimate that the Hudson Valley gained a net of approximately 60,000 people from New York City during the brunt of the pandemic

Read more at Pattern for Progress

Gallup: New Low in U.S. Say It Is a Good Time to Buy a House

Americans divide evenly on whether it is now a good (50%) or a bad time (49%) to buy a house. The 50% saying it is a good time to purchase a home is the lowest Gallup has measured -- two percentage points below the prior low in 2006 amid the housing bubble. Americans have consistently been more likely to say it is a good than a bad time to buy a house. Their responses to this question likely take into account the health of the housing market but also their belief that real estate is a good investment.

The latest data are from Gallup's annual Economy and Personal Finance poll, conducted April 1-14. The greater pessimism about housing comes during the coronavirus pandemic, which has led to a record drop in Americans' economic confidence and increased worry about their own personal financial situation. Optimism about the housing market has declined more in the past year among homeowners (down 16 percentage points) than renters (down four points). That is partly because renters' optimism already fell sharply a year ago, while there was no meaningful change among homeowners between 2018 and 2019.

Read more at Gallup

COVID News – Tedros Adhanom, Head of the WHO, on the Lessons from COVID-19

On top of the death and physical suffering it has caused, covid-19 has severely disrupted health systems, depriving millions of essential health services; roiled economies, erasing trillions of dollars from global gdp; and caused immense social upheaval, with borders closed, movement restricted and schools shut. Covid-19 has also exposed and exacerbated political fault lines, within and between nations. Vaccines, masks, “lockdowns” and other public-health measures have been heavily politicised. Some leaders have lost their jobs as a result of their handling of the pandemic. The quest to identify the origins of the pandemic has increased geopolitical tensions globally.

One of the key lessons of covid-19, therefore, is that a pandemic is so much more than a health crisis. That means governments must not see health as a cost, but as an investment in social, economic and political stability and security. Countries spend vast amounts preparing for the threat of a terrorist attack, but relatively little preparing for the attack of a virus, which can be far more damaging and costly.

 Read more at The Economist

Euro Zone Inflation Ticks Up in April

Euro zone inflation accelerated last month, Eurostat said on Wednesday, confirming preliminary data pointing to increasingly stubborn price growth among the 20 nations sharing the euro. Overall price growth accelerated to 7.0% in April from 6.9% a month earlier, as rising services and energy costs offset a slowdown in food price growth.

Although underlying price growth, the key focus of European Central Bank policymakers in recent months, slowed a touch, the crucial services component continued to accelerate, pointing to mounting wage pressures that could get inflation stuck above the ECB's 2% target. Excluding volatile food and fuel prices, core inflation slowed to 7.3% from 7.5%, while an even narrower measure, which excludes alcohol and tobacco, slowed to 5.6% from 5.7% in its first decline since last June.

Read more at Reuters

Siena Poll: Hochul Favorability Rating Negative for First Time, 40-45%

For the first time, more voters, 45%, view Governor Kathy Hochul unfavorably than view her favorably, 40%, down from 43-43% in March. Her job approval rating slid to 50-44% from 52-41% in March. A strong majority thinks Hochul is hard working, 58-20%, and a plurality of voters says Hochul is honest, 44-32%, and not corrupt, 47-26%. However, voters are evenly divided on whether Hochul is effective, 39-39%, or a strong leader, 40-40%, according to a Siena College poll of registered New York State voters released today.

A plurality of voters says that overall, the recently passed state budget will be good, rather than bad, for New York, 38-26%. A strong to overwhelming majority of voters think five specific proposals will be good for New York: increasing funding by $1 billion for mental health services, 80-9%, increasing the minimum wage, 64-24%, giving judges more discretion to set bail, 59-20%, allocating $100 million to support abortion providers, 59-27%, and authorizing the state to penalize/close unlicensed cannabis businesses, 58-26%. Voters are closely divided on new building electrification mandates and expanded film tax credits.

Read more at Siena College Research Institute

Democrats to Long Shot Launch Discharge Petition, Aiming to Force Debt-Ceiling Vote

House Democrats plan to begin collecting signatures Wednesday for a discharge petition to raise the debt ceiling, a long-shot parliamentary maneuver designed to circumvent House Republican leadership and force a vote. Rep. Brendan Boyle (D., Pa.), the top-ranking Democrat on the House Budget Committee, said he plans to initiate the petition in the well of the House when the chamber gavels into session at 10 a.m. and be the first to sign. “We only have two weeks to go until we may hit the x-date,” he said, referring to possible default. “We must raise the debt ceiling now and avoid economic catastrophe.”

It takes the signatures of 218 House members—a majority, regardless of party—to move a bill to the floor by discharge petition. Republicans control the House, 222-213, so for their petition to succeed, Democrats would need at least five GOP representatives to sign on.

Read more at The WSJ

4 Key Takeaways From OpenAI CEO Sam Altman’s Senate Testimony

If the burgeoning artificial intelligence industry has a spokesman, then it is Sam Altman, the CEO of OpenAI and creator of ChatGPT. On Tuesday, Altman testified before the Senate Judiciary Committee in what turned out to be a wide-ranging, big-picture conversation about the future of artificial intelligence. The stunning speed with which artificial intelligence has advanced, in only a matter of months, has inspired Congress with a rare bipartisan zeal to keep Silicon Valley's innovations from outpacing Washington again.

“I think it’s important to understand and think about GPT4 as a tool, not a creature,” he said, referencing OpenAI’s latest generative AI model. Such models, he said, were “good at doing tasks, not jobs” and would therefore make work easier for people, without replacing them altogether. But so far, no regulatory framework has emerged, despite the consensus that one is badly needed.

Read more at Yahoo

Elon Musk Warns of Tough Economy, Says Tesla Not Immune

At the company's annual shareholder meeting in Austin, Texas, Tesla CEO Elon Musk spoke about car demand, making more money than competitors in a slow economy, and also said he would conduct a third-party audit in cobalt mines that supply Tesla with a key ingredient to make batteries. In a sign of tough times even for Tesla, the market leader in electric cars, Musk said the company would try to advertise its vehicles, something it has not done before. "Tesla is not immune to the global economic environment. I expect things to be just at a macro economic level difficult for at least the next 12 months," said Musk.

At the meeting, shareholders voted to appoint the company's co-founder and former chief technology officer, JB Straubel, to the board. Proxy advisory firm Glass Lewis had urged investors to vote against Straubel's appointment, citing worries about his independence. They also rejected a proposal to publish a report that sought to establish succession plans for Chief Executive Musk.

Read more at Automotive News

New Executive Order Relieves Federal Contractors From Safer Federal Workforce Requirements

As anticipated, President Joe Biden has rescinded the COVID-19 safety requirements for federal contractors in connection with the declared end of the COVID-19 public health emergency and the World Health Organization determination that COVID-19 is no longer a Public Health Emergency of International Concern. While this is the official end of the required COVID-19 protocols for federal contractors, the obligations have been on hold for some time due to pending litigation challenging the administration’s authority to mandate the protocols.

Despite this, some state and local requirements remain. It is a good time for employers who still have COVID-19 protocols in place to assess whether those protocols make sense for their workplace in light of the current COVID-19 circumstances. Policies like testing and vaccination, and some accommodations, should be reviewed for legal compliance given the changes.

Read more at Jackson Lewis

New York Gets Tough With Owners of Natural Gas Power Plants

New York has been making it tougher for these natural gas plants to fire up when demand for energy is high. In 2019, the state adopted the Peaker Rule, named for the fossil-fuel generation plants that kick in during the hottest months of summer when air conditioners run around the clock. The regulation required peakers to adopt stringent pollution controls by 2023 and 2025. Those that couldn’t retrofit their plants to comply with lower allowable emissions rates were forced to retire. To date, the state Department of Environmental Conservation says, some 37 plants have plans to retire, many after 50 years of operation.

In October 2021, EPA denied an air permit request for the Danskammer Energy Center in Newburgh, claiming a renewal would interfere with the state’s greenhouse gas emission limits and that the company failed to show the plant would be needed to power the grid. The plant is still churning out fossil-fuel-generated energy, and its output, like the NYPA peakers, has steadily been bumped up in recent years.

Read more at the Poughkeepsie Journal

Average US Diesel Prices Continue Downward Slide

Average U.S. diesel prices are at their lowest point since Jan. 31, 2022. According to the Energy Information Administration (EIA), the price sits at $3.897 as of Tuesday, May 16. That’s down from $3.922 on May 8 and $4.018 on May 1. Average prices are down all across the nation, with the Gulf Coast seeing the lowest prices at $3.593 per gallon. California’s average price is down to $4.825 from $4.847 on May 8, EIA statistics show.

The price of diesel this summer could be $2 lower than the prior year, said Patrick De Haan, GasBuddy’s head of petroleum analysis. Higher interest rates have led to price declines related to lower consumption.

Read more at The Trucker

China’s Demand for Oil Hits Record as IEA Raises Global Forecasts

China’s insatiable demand for oil is growing at a faster-than-expected pace, threatening to tighten crude markets and send oil prices higher as supplies struggle to keep up, the International Energy Agency said. The Paris-based agency’s latest outlook points to a widening divide between booming demand for crude across the developing world and lackluster demand in Europe and North America where economic prospects look bleak.

It also highlights a growing disconnect between oil prices—which have tumbled to their lowest levels in around 16 months in recent weeks—and expectations that strong demand for oil and limited supplies will prompt a sharp deficit that many analysts expect to lift oil prices. In its closely watched monthly oil market report, the IEA raised its forecast for global oil demand growth this year by 200,000 barrels a day, to 2.2 million barrels a day. It said total demand would stand at 102 million barrels a day, 100,000 barrels a day more than it forecast last month.

Read more at The WSJ

Stellantis Invests in Hydrogen Fuel Cell Production

Automaker Stellantis has taken a one-third stake in Symbio, a developer and manufacturer of hydrogen-fuel cells – a move seen as supporting its line of hydrogen-powered vans for the European and U.S. markets. Symbio will be co-owned by two French companies: Faurecia, an automotive technology supplier that’s part of the Forvia group; and Michelin, the tire manufacturer.

Faurecia and Michelin had been 50-50 partners in Symbio, which has a “gigafactory” slated to start this year at Saint-Fons, France, and aims to produce 50,000 fuel cells annually by 2025. Stellantis previously adopted hydrogen-fuel cell technology for electric vehicles developed by Symbio – which it offers to power light commercial vehicles and vans, available since 2021. Larger vans are planned to be offered in 2024.

Read more at American Machinist