Member Briefing May 20, 2024

Posted By: Harold King Daily Briefing,

Top Story

US Industrial Production Stagnates as Factory Output Declines

Industrial production stalled in April amid a pullback in manufacturing output as the sector remains constrained by tighter credit conditions and elevated borrowing costs. Elevated uncertainty leads us to expect production will continue to be range-bound in the coming months. Manufacturing output, which comprises the vast majority of the index, declined 0.3% in April on the heels of a downward revision to its decent gain in March. Over the past year, industrial output is down 0.4%.

Digging into the manufacturing sector details, weakness was broad-based. Durable goods contracted 0.5% as production of transportation and electrical equipment retraced some of their solid gains in the prior month. Despite the weakness in business equipment, computer and electronics output continued to rise, up 0.6% in the month. Demand for "high-tech" products, which includes computers, communications equipment and semiconductors, has been a bright spot in this otherwise beleaguered sector; production is up 9.4% on the year. In short, the factory sector remains under pressure.

Read more at Wells Fargo

The Conference Board Leading Economic Index® (LEI) Continued to Fall in April

The Leading Economic Index (LEI) decreased 0.6% in April, marking the largest monthly drop since October. The index is now only 1.3 percentage points above its pandemic-related trough hit exactly four years ago. The U.S. economy has evolved in many unexpected ways since then, and despite a generally strong macroeconomic backdrop, recession indicators are still flashing signs of weakness.

"Another decline in the U.S. LEI confirms that softer economic conditions lay ahead," said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. "Deterioration in consumers' outlook on business conditions, weaker new orders, a negative yield spread, and a drop in new building permits fueled April's decline. In addition, stock prices contributed negatively for the first time since October of last year. While the LEI's six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead. Indeed, elevated inflation, high interest rates, rising household debt, and depleted pandemic savings are all expected to continue weighing on the US economy in 2024. As a result, we project that real GDP growth will slow to under 1 percent over the Q2 to Q3 2024 period."

Read more at PR Newswire

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Policy and Politics

Biden Signs FAA Reauthorization Bill into Law

President Joe Biden signed on Thursday sweeping aviation legislation that will boost U.S. air traffic controller staffing, increase funding to avert runway close-call incidents and speed up refunds for canceled flights. The $105 billion, five-year measure reauthorizes the Federal Aviation Administration. It requires airplanes to be equipped with 25-hour cockpit recording devices, raises maximum civil penalties for airline consumer violations from $25,000 per violation to $75,000 and boosts aircraft production scrutiny. The bill also directs the FAA to deploy advanced airport surface technology to help prevent collisions.

The bill does not raise the mandatory pilot retirement age to 67 as House lawmakers had sought to do last year and retains pilot training requirements. Congress will not establish minimum seat size requirements, leaving that instead to the FAA. The bill requires the Transportation Department to create a dashboard that shows consumers the minimum seat size for each U.S. airline. Lawmakers also rejected many other consumer provisions the Biden administration had sought, including requiring compensation for lengthy airline-caused delays as is the case in Europe.

Read more at Reuters

Governor Hochul Launches Round XIV Regional Economic Development Council Initiative

Governor Kathy Hochul today announced the launch of Round XIV of the Regional Economic Development Council Initiative. Round XIV includes $445 million in core capital grant and tax-credit funding combined with a wide range of programs from eight state agencies, including $100 million in grant funds from Empire State Development (ESD), available to projects on a continuous basis. The Councils are encouraged to support projects that advance or address strategic state priorities - including distressed communities, childcare, innovative public-partnerships, and green buildings and sustainable development. Projects that promote these goals will be eligible for an enhanced inventive.

In Round XIV, ESD is launching a new grant program targeting small manufacturers. Up to $10 million will be available through the Small Manufacturer Modernization Grants Program, which will award grant funds to small legacy manufacturers across the state to invest in modernization and integration of advanced technologies. Grant awards will range from $50,000 to $250,000. The CFA is available here; the deadline for applications is Wednesday, July 31st at 4 p.m.

Read the press release

The CFA application is here

NAM, Other Trade Associations, Urge Passage of New Miscellaneous Tariffs Bill (MTB)  

Last week, House Ways and Means Trade Subcommittee Chairman Adrian Smith (R-NE) introduced the Miscellaneous Tariff Bill Reform Act, which seeks to renew the MTB—a manufacturing-critical law that temporarily removes or reduces tariffs on products not available in the U.S.—as soon as possible. The NAM, which has long urged Congress to take up the issue, lauded the legislation and called for its swift passage. The last MTB expired in December 2020.

“Historically, the MTB has always had bipartisan support, and we thank House Ways and Means Trade Subcommittee Chairman Adrian Smith for his leadership and efforts to introduce MTB legislation,” said NAM Managing Vice President of Policy Chris Netram in a statement cited by Chairman Smith’s office. In the nearly three years that they have been operating without an MTB, manufacturers and other businesses in the U.S. have paid more than $1.3 million a day to get inputs they cannot find in the U.S., according to an NAM analysis. Passing the MTB through 2026, on the other hand, and reauthorizing passage of future MTB cycles will boost U.S. competitiveness. Tariff relief under the previous MTB increased U.S. gross domestic product by up to $3.3 billion every year, according to the U.S. International Trade Commission.

Read more at NAM

Health and Wellness

Rescheduling Marijuana: Schedule 1 vs Schedule 3, Explained

President Biden endorsed the Justice Department's move to reclassify marijuana from a Schedule I drug to a Schedule III drug Thursday. The United States Drug Enforcement Administration puts regulated drugs into five categories, per the Controlled Substance Act from 1970, each indicating a level of "abuse potential," with five being the lowest and one being the highest, while also taking into account the drug's use in medicine, according to the DEA.

Schedule I drugs have no approved medical usage, according to the DEA, and include substances like heroin, LSD, and ecstasy, which are highly likely to be abused. In comparison, Schedule V drugs have the least potential for abuse, and the drugs in this group are usually used for "antidiarrheal, antitussive, and analgesic purposes," according to the DEA. Schedule III drugs, which is where marijuana could move to, as defined by the DEA, are "drugs with a moderate to low potential for physical and psychological dependence." If pot does become a Schedule III drug, it would be in company with testosterone and Tylenol (which contains less than 90 milligrams of codeine), according to the DEA.

Read more at USA Today

New COVID-19 FLiRT Variants Are Now the Dominant Variant. Could There be a Summer Surge?

The Centers for Disease Control and Prevention has detected a new set of COVID-19 variants nicknamed FLiRT in wastewater surveillance, according to data from the agency. From April 28 through May 11, the variant, labeled KP.2, makes up about 28% of the cases in the United States, according to the CDC. That makes it the new dominant variant in the country, overtaking JN.1. The JN.1 variant, which spread globally over the winter, made up about 16% of COVID-19 cases in the U.S. in the same two-week span. KP.1.1, another FLiRT variant that is circulating, made up about 7% of COVID-19 cases in that two-week span, according to CDC data.

Andy Pekosz, PhD, a professor in molecular microbiology and immunology at the Bloomberg School of Public Health at Johns Hopkins University said a summer surge is certainly possible, and that the FLiRT variants would be high on his list of viruses that could cause another wave of infections in the U.S. "That said, our definition of a wave has changed; while we still see case rates rise and fall throughout the year, we see much lower numbers of cases of hospitalizations or deaths than we saw in the first couple years of the pandemic," Pekosz said in the article.

Read more at USA Today


The Governor updated COVID data for the week ending May 10th.


  • Weekly: 11
  • Total Reported to CDC: 83,308


  • Average Daily Patients in Hospital statewide: 450
  • Patients in ICU Beds: 40

7 Day Average Cases per 100K population

  • 3.0 positive cases per 100,00 population, Statewide
  • 3.4 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

Election 2024


Industry News

Alabama Mercedes-Benz Workers Vote Against Unionizing—In UAW Setback

Mercedes-Benz workers in Alabama rejected union representation by the United Auto Workers on Friday, a setback for the labor union as it tries to expand to non-union factories in the South after ratifying contracts with Stellantis, General Motors and Ford last year. The National Labor Relations Board said 2,642 of the Mercedes-Benz plant workers voted against union representation, while 2,045 voted for it. Some 51 ballots were challenged and not counted, according to the NLRB, which also noted five void ballots among the 5,075 eligible voters.

A vote for union representation would have made Mercedes the second foreign-owned automaker in the South whose staff joined the UAW, behind employees at Volkswagen, whose vote to unionize was certified about two weeks ago. The UAW and Mercedes-Benz can file objections to the election within five business days.

Read more at Forbes

Eurozone Industrial Production Ticks Up in March, Helping Economy Out of Recession

Industrial production in the euro area rose for a second straight month in March, helping lift economic growth in the bloc at the start of 2024, despite once again being heavily influenced by volatile Irish output. Total production rose by 0.6% compared with a month earlier, aiding eurozone gross domestic product rise 0.3% higher in the first three months of the year, according to figures published Wednesday by statistics body Eurostat.

Energy-intensive industries, which suffered large contractions in 2022 and much of 2023 on the effects of Russia's invasion of Ukraine, picked up in recent months, helping the eurozone leave behind the recession it suffered in late 2023. While industry overall picked up in March, the four largest eurozone nations--Germany, France, Italy and Spain--all saw production decline on month, flipping rises made in each in February. By contrast, Irish output, which is heavily swayed by external outsourcing by multinational firms, jumped 12.8% in March. However, production in March still down 1.0% compared with the same month of last year. More concerning, survey data shows weakening sentiment in the manufacturing sector, with low demand a continuing challenge for eurozone goods producers.

Read more at MarketWatch

New Home Construction Holds Steady in April Despite High Mortgages

Builders broke ground on more new homes in April as permits for future construction came in a little below estimates, the Census Bureau and Department of Housing and Urban Development said on Thursday. Starts were at an annual rate of 1.36 million, 5.7% higher than the downwardly revised March number of 1.29 million. Permits, meanwhile, came in at 1.44 million, down from the upwardly revised 1.485 million in March. Both were below the comparable month in 2023.

“The market has slowed down since mortgage rates increased and this has pushed many potential buyers back to the sidelines,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kansas. “Residential construction should remain solid despite risks of other areas of the economy slowing down,” said Jeffrey Roach, chief economist at LPL Financial. “Years of undersupply and few homes on the market are supporting the residential markets.”

Read more at US News and World Report

US Retail Sales Flat in April and March Numbers Revised Lower

U.S. retail sales were unexpectedly flat in April as higher gasoline prices pulled spending away from other goods, indicating that consumer spending was losing momentum. The unchanged reading in retail sales last month followed a slightly downwardly revised 0.6% increase in March, the Commerce Department's Census Bureau said on Wednesday. Retail sales were previously reported to have risen 0.7% in March.

Excluding autos and gas, retail sales declined by 0.1% last month; expectations had been for a 0.1% increase. Nonstore retailers, which includes online sales, led the declines, falling 1.2% from the month prior. Sporting goods and hobby stores also declined 0.9%. Meanwhile, sales at clothing and accessories stores rose 1.6% in the month, while gasoline sales picked up 3.1%. "Consumer spending is slowing as elevated interest rates weigh on rate-sensitive spending and as the labor market cools," Oxford Economics deputy chief US economist Michael Pearce wrote in a note to clients.

Read More at Yahoo Finance

Ford Cuts Battery Orders for Struggling EVs

Ford Motor Co. has begun cutting orders from battery suppliers to stem growing electric-vehicle losses, according to people familiar with the matter, as it throttles back ambitions in a rapidly decelerating market for plug-in models. Ford continues to maintain partnerships with its battery suppliers, which include South Korea’s SK On Co. and LG Energy Solution Ltd., as well as China’s Contemporary Amperex Technology Co. Ltd., said the people, who asked not to be identified revealing internal decisions.

The move is part a retrenchment of Ford’s EV strategy, which includes reducing spending by $12 billion on battery-powered models, delaying new EVs, cutting prices, and postponing and shrinking planned battery plants. Ford has forecast EV losses of up to $5.5 billion this year and Chief Executive Officer Jim Farley recently said its EV unit, Model e, “is the main drag on the whole company right now.”

Read more at North American Dealers Association

Hudson Valley Employment Edges Higher Year on Year, Mfg Employment Falls

For the 12-month period ending April 2024, the private sector job count in the Hudson Valley rose by 9,300, or 1.2 percent, to 813,800.  This was the highest April employment count in five years.  While the over-the-year picture remained positive, job growth is less broad-based.  Four sectors added jobs for the 12 months through April 2024 while five lost jobs.  Private education and health services remained the region’s leading jobs generator.  Year-over-year in April 2024, the sector climbed 4.5 percent to reach 229,400 – its highest employment count on record, regardless of month. 

In addition to the private education and health services (+9,800) sector, leisure and hospitality (+2,400), financial activities (+900) and other services (+400) all added jobs.  Employment losses were focused in professional and business services (-2,200), trade, transportation and utilities (-1,100), manufacturing (-500) and information (-300). Private sector job growth was spread throughout the region.  Year-over-year, Sullivan County posted the strongest gains, up 4.6 percent.  They were followed by the Kingston MSA (+2.2 percent), the Dutchess-Putnam Metropolitan Division (+1.3 percent), and the Orange-Rockland-Westchester labor market area (+0.9 percent).

Hudson Valley Labor Market Profile

DOE Invests $71 Million to Fund 18 Projects to Advance U.S. Solar Manufacturing

The U.S. Department of Energy (DOE) has allocated $71 million to fund 18 projects in 10 states to help grow the network of domestic manufacturers across the U.S. solar energy supply chain. The funding, which includes $16 million from the Bipartisan Infrastructure Law, will be used to support projects that will aid U.S. solar manufacturing capacity, including equipment, silicon ingots and wafers, and both silicon and thin-film solar cell manufacturing. Additionally, these projects are designed to introduce solar technologies to new markets.

According to the department, three of the projects hope to bring silicon wafer and cell manufacturing onshore, while seven projects will work to advance dual-use PV technologies to harness their potential to electrify buildings. Of the remaining eight projects, four will work to improve efficiency, reduce costs, and bolster the supply chain for CdTe systems, and four will prove out tandem PV devices that pair established PV technologies with perovskites.

Read more at Plant Services

Spirit AeroSystems to Lay Off About 400 Employees as 737-Max Production Woes Hit

Spirit AeroSystems is laying off several hundred members of its workforce in Wichita, Kan., according to an internal memo, as the company deals with high debt and slowed production at Boeing, its key customer. “The recent slowdown in the delivery rate on commercial programs compels a reduction to our workforce in Wichita,” spokesman Joe Buccino said. “In the coming weeks, we will inform affected employees. We are committed to implementing this transition in as compassionate a manner as possible.”

The memo, first reported by Wichita-based KSN, said about 400 employees would be affected. Buccino did not confirm that figure to Reuters. Spirit had already started to limit overtime and hiring as production declines due to lower output of 737 MAX jets following a January mid-air blowout on a Boeing plane.

Read more Yahoo

Cheating on Workforce Drug Tests on the Rise as Marijuana Use Increases: Report

More workers are tampering with employer-mandated drug tests than ever before, according to a new report from Quest Diagnosis, published last week. The annual Quest Diagnostics Drug Testing Index provides insights into patterns of drug use among the American workforce. Invalid urine specimens increased by 45.2% year over year (0.31% in 2022 versus 0.45% in 2023). Substituted or invalid urine typical signal that the specimen has been tampered with to hide drug use, the company said.

Quest Diagnostics found that marijuana positivity in the general US workforce increased by 4.7% year over year (4.3% in 2022 versus 4.5% in 2023). From 2019 to 2023, marijuana positivity increased 45.2% (3.1% in 2019 versus 4.5% in 2023). “Marijuana positivity stayed the same (1.1% in both 2022 and 2023) in states in which recreational marijuana is legal and decreased 2.2% (0.90% in 2022 versus 0.88% in 2023) in states in which medical marijuana is legal,” the data showed. “In states in which neither recreational nor medical marijuana use is legal, marijuana positivity decreased 6.7% (0.89% in 2022 versus 0.83% in 2023) year over year and stayed the same over five years (0.83% in 2019 versus 0.83% in 2023).”

Read more at McKnights

FAA Still Short About 3,000 Air Traffic Controllers, New Federal Numbers Show

Despite a surge in hiring last year, air traffic control stations nationwide are still about 3,000 controllers short, according to new Federal Aviation Administration numbers. The numbers, first reported by CNN, show the challenge of filling the gap that led to flight delays and concerns that fatigue contributed to a series of near collisions on runways last year. The shortage is a concern of airlines, controllers, and watchdogs like the inspector general who last summer concluded the agency “made limited efforts to ensure adequate controller staffing at critical air traffic control facilities.”

The FAA has about 11,500 controllers who are either fully certified or have reached the stage in training where they can work independently, known as Certified Professional Controller In Training. The staffing plans developed by the FAA and the union representing air traffic controllers calls for more than 14,600 controllers to fully staff towers and centers. Last year, the FAA hired 1,512 new controller candidates — just above its goal of 1,500, the numbers indicate. The FAA told CNN it “has taken several actions” to address the shortage and improve safety. But at the same time, its air traffic control organization lost more than 1,300 employees, including controllers who retired or candidates who dropped out of training.

Read more at CNN