Member Briefing May 7, 2024
Conference Board Says U.S. Jobs Growth Set to Slow
The Conference Board’s employment trends index fell to 111.25 in April from a downwardly revised 112.16 in March, the private-research group said Monday. The reading comes after Labor Department figures published last week that showed the U.S. added 175,000 more jobs in April, fewer than in March, with the unemployment rate ticking up to 3.9% from 3.8% in the prior month. “The labor market is beginning to show signs of cooling following a period of very strong growth since the pandemic recession,” said Will Baltrus, associate economist at The Conference Board.
The Employment Trends Index is a leading composite index for employment that aggregates eight indicators. When the index increases, employment is likely to increase as well, while turning points in the index suggest a change in the number of jobs is likely to occur in the short term. Although the index has been on a downward trajectory since March 2022, the index is elevated by historic levels, suggesting a slowdown in growth to come. Three of the eight components used for the overall index drove the downward reading, including a higher percentage of respondents saying jobs were hard to get.
Manufacturing Employment Costs Jump in Q1
Worker compensation costs increased 1.2% in the first quarter, driven by a 1.1% rise in both wages and benefits. This growth rate exceeds the 0.9% recorded during the fourth quarter of last year and marks the fastest increase since the third quarter of 2022. Over the past year, compensation costs have risen 4.2%, with wages and salaries up 4.4% and the cost of benefits increasing 3.7%. In the private sector, compensation costs have increased 4.1% over the past year, with wages growing 4.3% and benefits rising 3.6%. When adjusted for inflation, private-sector compensation saw a modest increase of 0.6%, with wages rising 0.8% and benefits growing 0.1%.
Union workers enjoyed a 5.3% increase in compensation, with wages surging 6.3% and benefits gaining 3.8%. In contrast, nonunion workers experienced a 3.9% rise in compensation costs. For state and local government employees, compensation costs increased 4.8%, with wages rising 5.0% and benefits growing 4.5% over the past year. For manufacturers, total compensation rose 1.2% in Q1, the fastest increase in two years. Overall, total compensation has risen 3.8% over the past year, with wages and salaries up 4% and benefit costs up 3.4%.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Three Soldiers Killed in Kerem Shalom Rocket Attack - BBC
- Hamas Says It Accepted Proposed Cease-Fire; Israel to Review Plan - Reuters
- Israeli Cabinet Votes to Shut Down Al Jazeera's Operations in the Country - NYT
- US Fears Israel Speeding up Rafah Invasion Timeline After Deadly Hamas Attack - Politico
- Israeli Military Tells Palestinian Civilians in Eastern Rafah to ‘Evacuate Immediately’- CNBC
- Biden Administration Pauses One Ammunition Shipment to Israel, Reason Unclear - CNN
- ‘You Have Been Warned’: GOP Senators Caution ICC Over Israeli Arrest Warrants – Politico
- 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
- Russia Will Have to Increase its Missile Arsenal to Deter the West, Diplomat Says - Reuters
- Russia Says It Will Conduct Tactical Nuclear Weapon Drills In Response To ‘Threats’ From The West - Forbes
- Ukrainian Drone Attack in Russia Border Region Kills at Least Six, Governor Says – France 24
- Moscow Threatens to Strike British Military Facilities Following Cameron’s Remarks – Politico
- North Korean Weapons are Killing Ukrainians. The Implications Are far Bigger - BBC
- Russia Takes Control of Ocheretyne Village in Ukraine's East -Defence Ministry – Reuters
- Russia Using Chemical Choking Agents in Ukraine, US Says - BBC
- 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
- ECB Grows More confident About Cutting Rates, Policymakers Say – Reuters
- Japan Eyes High-Level Talks on U.S. Nuclear Umbrella: Defense Minister – Nikkei Asia
- Columbia University Cancels Main Commencement Ceremony After Protests - WSJ
- Panama Election: José Raúl Mulino Wins Presidential Race After Front-runner Sentenced - NYT
- Chad Presidential Vote Set to End Military Rule - BBC
- Damage, Injury to Philippines in South China Sea is 'Irresponsible Behaviour', Says US Defense Secretary – Reuters
- Kenya Floods Death Toll Continues to Rise as Heavy Rains, Flooding Persist – France 24
- India's Foreign Minister Rejects Biden's 'Xenophobia' Comment – Reuters
- Deadly Floods Ravage Southern Brazil, Force Tens of Thousands to Flee – France 24
- Javier Milei: President Denies Ordinary Argentines Paying for Austerity Cuts - BBC
Policy and Politics
Here’s What NY Lawmakers are Focused on for the Rest of Session
State lawmakers will flock back to Albany on Monday to begin the final stretch before the state Legislature adjourns June 6. With just 18 days of scheduled session remaining, now is the time for legislators to hone in on bills that for whatever reason didn’t pass muster during budget talks. From the environment, to elections, to policing protests, this is the final stretch run before politicians head home and campaign.
- The NY HEAT Act aims to get the state to shift from fossil fuels by eliminating a requirement that utility companies build free gas hook-ups for customers who live within 100 feet of an existing line. The measure passed the state Senate but was held up in the Assembly and never made it into the state budget, though Assembly Speaker Carl Heastie said the bill could be eyed later in session.
- Lawmakers spent much of session pushing for ways to regulate adolescent exposure to social media feeds. Two bills backed by state Attorney General Letitia James would ban algorithmic feeds for users under the age of 18 without their parents’ permission and prohibit the collection sale of kids’ data.
- State Sen. James Skoufis penned legislation that would create new guidelines for the state’s matching funds program, raising the bar for candidates to qualify. It’s a second attempt by lawmakers to make changes to the new program after the governor vetoed legislation last year.
- The controversial law change moving New York’s local elections to even years is meeting its successor, one that would see elections in New York City for mayor and other positions make the same change, head for deliberation before the end of session this year. The bill, sponsored by Skoufis yet again, is a constitutional amendment, and even if it did pass this year, it would need to pass for a second time next year before going before the state’s voters for final approval.
Biden Vetoes Resolution to Block Labor Board Joint Employer Rule
President Joe Biden vetoed a measure Friday that would have overturned the National Labor Relations Board’s joint employer rule, nixing the resolution that cleared both chambers of Congress by bipartisan margins. Biden rejected a resolution brought under the Congressional Review Act that would have blocked the NLRB’s new standard lowering the bar for whether two companies are joint employers, sharing obligations to negotiate with unions as well as joint liability for labor violations.
A two-thirds majority in the House and Senate would be required to overturn the veto, an unlikely scenario as an overwhelming majority of congressional Democrats endorse the rule. “I am proud to be the most pro-union, pro-worker President in American history. I make no apologies for my Administration protecting the right to organize and bargain collectively,” he said. The veto comes as the administration tries to salvage the regulation, which was struck down in March by a federal court in Texas. The board is considering its options to keep the rule alive, including potentially refusing to acquiesce to the judge’s ruling outside of his district, the Eastern District of Texas.
Health and Wellness
Health Systems and Employers Count Economic Cost of Long Covid
Long Covid is exerting a silent drag on work and health, say officials and economists who warn that a struggle to count the costs of the condition is leaving authorities “shooting in the dark”. The impact of long Covid — defined as symptoms that continue or develop three months after an initial infection, and last at least two months — has dealt a long-lasting blow to the productivity of health systems, with ripple effects on the wider workforce.
But four years after the emergence of the pandemic, attempts to assess how large and enduring the hit will be are hampered by a dearth of data that accurately quantifies the effects of long Covid on the labour market and the finances of healthcare providers. One EU estimate suggests that long Covid may have cut labour supply in the bloc by up to 0.5 per cent in 2022, the equivalent of more than 1mn full-time workers. Studies in the US and UK have reached broadly similar conclusions — suggesting the condition has driven the recent increase in workplace absence in many countries. But no one knows how many people who stopped or scaled back work because of long Covid have been forced to leave their jobs for good — and how many have been able to return, either in a reduced role or gradually resuming their previous responsibilities.
Read more at The Financial Times
Election 2024
- New Poll Reveals a Major Warning Sign for Biden and Democrats in Key Down-Ballot Races - Insider
- NY Times Editor: Not Media’s Job to Prevent Trump from Winning – The Hill
- Trump Trades the Courtroom for RNC Retreat in Florida Talks With VP Potentials - CNN
- Share of Black Americans Planning to Vote Drops: Survey – The Hill
- 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
Xi’s European Tour: Macron, von der Leyen Press on Trade in Paris Talks
French President Emmanuel Macron and EU Commission chief Ursula von der Leyen urged China to ensure more balanced trade at the start of President Xi Jinping's visit to Paris, during which Macron was also set to press him on Ukraine. Xi was in Europe for the first time in five years, at a time of growing business tensions that include the European Union investigating Chinese industries such as electric vehicle exports, while Beijing probes mostly French-made brandy imports.
Macron said Europe and China needed to resolve structural difficulties, in particular on trade. Von der Leyen was more blunt, saying the relationship was hurt by unequal market access and Chinese state subsidies. The EU's 27 members - in particular France and Germany - are not unified in their attitude towards China, which does not help obtaining change. While Paris advocates a tougher line on the EV probe, Berlin wants to proceed with more caution, sources say. In brief public comments ahead of the talks, Xi said he viewed relations with Europe as a priority of China's foreign policy and that both should stay committed to the partnership.
Construction Spending Dipped in March – Up Year on Year
In March, total U.S. construction spending decreased slightly by 0.2% from February, yet showed a significant increase of 9.6% compared to March 2023. Over the first three months of the year, construction spending reached $461 billion, marking a 10.6% rise from the previous year. Private construction experienced a minor decline of 0.5% during the month, but has increased 7.6% over the past year. Meanwhile, manufacturing construction rose 0.2% in March and has surged 25.9% over the past year.
In March, the estimated seasonally adjusted annual rate of public construction spending was $483.1 billion, 0.8% above the revised February estimate of $479.3 billion. Educational construction was at a seasonally adjusted annual rate of $102.7 billion, 1.0% above the revised February estimate of $101.7 billion. Highway construction was at a seasonally adjusted annual rate of $149.0 billion, 0.9 % above the revised February estimate of $147.7 billion.
Boeing’s Starliner Launch Scrapped By Atlas Rocket Issue
Boeing's new commercial spacecraft, Starliner, waved off its first launch attempt late tonight (May 6) due to a problem with an "oxygen relief valve on the Centaur Stage on the Atlas V," NASA posted on X. Atlas V, the flight's rocket manufactured by United Launch Alliance, has flown missions since 2002 with a 100 percent success rate, but this is its first mission with astronauts.
"The engineering team has evaluated the vehicle is not in a configuration where we can proceed with flight today," an official in Mission Control said in a callout broadcast on NASA Television roughly two hours and one minute before the scheduled launch at 10:34 p.m. EDT (0024 GMT May 7). Friday (May 10) is now the earliest possible launch target, according to NASA.
ITIF Report: The US Economy Needs More Consolidation, Not Less
Large firms are generally more efficient than smaller ones. An indicator of their greater productivity, firms with 500 or more employees have higher receipts per worker than do firms with fewer than 500 employees in 710 of 938 six-digit NAICS industries. Most of the 228 industries in which smaller firms are more productive are those with little ability to gain scale economies (e.g., furniture repair, food trucks, etc.). Consolidation can boost industry-wide productivity by ensuring that more production is conducted by larger firms with higher productivity.
Some industries would benefit from greater scale but still have large shares of small firms. They include industries in which government policy has significant influence, such as banking, construction, doctor’s offices, farming, and telecommunications. Despite the efficiency gains consolidation can bring, state, local, and federal government policies can discourage greater consolidation. Policymakers need to modify or, if possible, remove these policies. Overall, it’s time to balance the agenda of seeking more competition with an equally compelling and not mutually exclusive goal of seeking more consolidation and higher productivity.
NAM Wants Trade Policy to Promote Supply Chain Resilience
Last month the National Association of Manufacturers (NAM) told the Office of the United States Trade Representative this week that it must use existing trade and investment tools to promote supply chain resilience for manufacturers in the U.S. “Manufacturers and workers in the U.S. need USTR to undertake a proactive and competitive trade and investment policy that opens markets, eliminates barriers, enables the sourcing of necessary inputs and creates opportunities for inbound and outbound investment,” the NAM said in a statement. The suggestions were in response to a USTR call for comment on “strategies that [will] advance U.S. supply chain resilience” (Federal Register).
The NAM encourages the government to “aggressively pursue ambitious agreements that include market access and the true removal of barriers to economic engagement with our partners.” The USTR can help manufacturers by: Adjusting or eliminating “current tariffs on manufacturers and ensur[ing] they are applied in such a way that creates a competitive environment for manufacturing in the U.S.”; “Negotiating more high-quality, modernized trade agreements with foreign partners” to remove trade barriers and address discriminatory measures; and Enforcing on-the-books trade agreements “to ensure that our trading partners are playing by the rules.”
Read more at Material Handling & Logistics
U.S. Automakers Like GM are Rapidly Losing Ground in China, Once an Engine for Growth
General Motors CEO Mary Barra has been aggressive in exiting unprofitable or underperforming markets over the past decade, but leaving the automaker’s latest problematic country would be far more difficult than others. China was once a profit engine for GM, and its top sales market from 2010 to 2023. But the automaker lost $106 million there during the first quarter, only its third quarterly loss in the country in at least 15 years and the largest outside of the coronavirus pandemic during that time.
It comes after a nearly decade-long slide in profits and market share for GM in China that has some industry watchers questioning whether the automaker can turn around the operations, or if it would be better to exit the country – an unimaginable prospect just a few years ago. Barra, who visited China recent during an auto show in Beijing, said GM remains committed to the market, which the company entered through a joint venture in 1997. “Over the long term, we’re committed to China. We believe that it’s a market that, over the medium term, will have substantial growth,” she said during GM’s quarterly earnings call on April 23.
Some Intriguing Showstoppers from The Beijing Auto Show 2024
China’s vision of the electric mobility future was on full display during the ten-day event, which ended this weekend. Organizers estimated that 117 new global and China-domestic models would debut in Beijing. In fact, about 30 foreign brands had stands, a turnout that hasn’t been seen at auto shows since before the pandemic. The South Koreans and the Japanese came, and from Germany, representatives making the case for their brands included CEO Oliver Blume of Volkswagen Group, Oliver Zipse of BMW Group and Ola Kallenius of Mercedes-Benz Group.
A few of the models would be powered by gasoline—by ICE, or internal combustion engines—but the vibe was clear: electrics are it. According to show officials, Beijing hosted a total of 278 electric and plug-in hybrid models on display. After digesting most of the reveals unveiled during the show, AutoBlog parsed a list to a select few of the more interesting models.
Maersk Deploys 125,000 Extra Containers to Cope With Red Sea Bottlenecks
The crisis in the Red Sea, where the Houthi movement has been shelling cargo ships since November 2023, is causing increasing problems. Since the end of last year, Maersk and many other shipping companies have stopped transiting the Red Sea up to the Suez Canal due to the unrest and the many drone and missile attacks on cargo ships. But according to Maersk, the Red Sea crisis has grown worse and more complex over the past few months.
”The risk zone has expanded, and attacks are reaching further offshore. This has forced our vessels to lengthen their journey further, resulting in additional time and costs to get your cargo to its destination for the time being,” Maersk writes. According to Maersk, the effects of the crisis include bottlenecks, vessel congestion, delays and shortages of equipment and containers. ”We estimate an industry wide capacity loss of 15-20% on the Far East to North Europe and Mediterranean market during Q2,” states Maersk. To alleviate equipment and container shortages, Maersk has rented 125,000 extra containers to keep up with customer demand and the longer transportation time south of Africa.
Air Force Project Blends Military and Commercial Space Networks
The U.S. Air Force is gearing up for a demonstration next year of a satellite communications network that can seamlessly integrate government-owned and commercial constellations on a single, secure military terminal. The demonstration is a key milestone in the Air Force Research Laboratory’s Defense Experimentation Using Commercial Space Internet, or DEUCSI — a program launched in 2018 to explore augmenting military communications by leveraging the growing commercial satellite internet industry.
The goal is to give forces on the ground, at sea and in the air access to the combined bandwidth of the military’s dedicated satellites as well as commercial satellite internet providers like SpaceX’s Starlink. A demonstration flight, slated for 2025, will showcase newly developed communications terminals capable of tapping into multiple commercial and military satellite constellations at the same time — a capability the Pentagon currently lacks.