Member Briefing May 8, 2023
U.S. Economy Added 253,000 Jobs Last Month, 11,000 in Mfg
The U.S. Department of Labor jobs report Friday surpassed expectations and demonstrated the continued resilience of the U.S. economy, with 253,000 jobs added in April, even amid concerns in the bank industry, Federal Reserve interest rate hikes and other signs of economic slowdown.
- The unemployment rate fell to 3.4%, equaling the pre-pandemic low from 2019 and the lowest level since 1969.
- Despite February and March job growth numbers being revised downward by 149,000, the overall job gains remain robust.
- Wage growth jumped to 4.4% year-over-year, and average hourly earnings saw a notable 0.5% month-on-month increase.
- The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, was unchanged at 62.6%. But the share of those aged 25 to 54 rose to a 15-year high of 83.3%.
- Manufacturing saw positive job gains of 11,000 last month.
- The largest increases in manufacturing employment occurred in transportation equipment (up 6,700, including 5,800 for motor vehicles and parts), fabricated metal products (up 6,300), computer and electronic products (up 3,200) and chemicals (up 2,000).
- The biggest employment declines in the sector were in paper and paper products (down 2,700), electrical equipment, appliances and components (down 2,600), nonmetallic mineral products (down 2,300), wood products (down 1,400) and textile product mills (down 1,000).
- There were 12,991,000 manufacturing employees in April, the most since November 2008.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- 'Mad Panic' as Russia Evacuates Town Near Zaporizhzhia Nuclear Plant - BBC
- Ukraine Launches Wave of Drones at Crimea, Russian Official Says - NYT
- Moscow Says US Behind Kremlin Drone Attack – Reuters
- Ukraine Says its Newly Fielded U.S. Patriot System Downed a Russian Hypersonic Missile - NPR
- U.S., Allies Patch Together Ukraine’s Defenses Against Russian Warplanes, Missiles - WSJ
- Wagner Chief Rages at Russia’s Generals and Threatens Bakhmut Pullout - The Guardian
- Wagner Says Russia Promises Enough Ammo To Stay In Bakhmut - Barron’s
- Ukraine’s 82nd Air Assault Brigade Is Ridiculously Powerful—And Could Lead The Coming Counteroffensive – Forbes
- Zelenskiy Meets Wounded Ukrainian Soldiers in Netherlands – Reuters
- A New Masada Is Born in the Ukraine War - WSJ
- 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
Biden, Lawmakers Look to Break Impasse on Debt Ceiling
Mr. Biden will host House Speaker Kevin McCarthy (R., Calif.) and other congressional leaders at the White House on Tuesday, the first direct contact in months as officials grapple with the prospect of the first-ever U.S. default as soon as June 1. While the two parties are publicly standing by their negotiating stances, officials on both sides of the aisle have started to quietly search for a way out of a potential crisis.
“The sooner these two guys get in the room and listen to what the other one needs, the more likely they are to solve this challenge and protect the full faith and credit of the United States of America,” said Sen. Kyrsten Sinema (I., Ariz.) on CBS, referring to Mr. Biden and Mr. McCarthy. “We’re on really shaky ground right now.”Democrats, who control the Senate, have insisted on a stand-alone bill, while Republicans, who control the House of Representatives, say any proposal to raise the country’s borrowing must include spending cuts and policy changes.
Chevron Case: Supreme Court Could Take Sledgehammer to Agency Power
The Supreme Court’s conservative majority may soon have a chance to dramatically limit the power of federal regulators. The justices this week agreed to take up a case that asks them to overrule a 39-year-old precedent that gives federal agencies deference in rulemaking that Congress hasn’t clearly authorized. The justices will decide whether to overrule the court’s 1984 decision in Chevron U.S.A. v. Natural Resources Defense Council, known as the Chevron deference.
That deference involves a two-part test to determine whether a federal agency’s rule is authorized. First, a court determines whether Congress “has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter.” If Congress was ambiguous or silent, the court must defer to the agency and uphold its action if it was “based on a permissible construction of the statute.” The decision could have wide-ranging impacts that scale back the executive branch’s authority to implement certain environment, employment, drug and other regulations.
Read more at The Hill
COVID News – Down and Decreasing
The US CDC is reporting:
- 5 million cumulative cases
- 13 million deaths
- 88,330 cases week of April 26 (down from previous week)
- 1,052 deaths week of April 26 (down from previous week)
- 7% weekly decrease in new hospital admissions
- 2% weekly decrease in current hospitalizations
The Omicron sublineages XBB.1.5 (69%), XBB.1.16 (12%), XBB.1.9.1 (69%), XBB.1.9.2 (4%), XBB (2.4%), XBB.1.5.1 (2.2%), and FD.2 (1.3%) currently account for a majority of all new sequenced specimens, with various other Omicron subvariants accounting for the remainder of cases.
Read more at The Johns Hopkins Center for Health Security
NYS COVID Update
The Governor updated COVID data for the week ending May 5.
Deaths:
- Weekly: 41
- Total Reported to CDC: 79,521
Hospitalizations:
- Average Daily Patients in Hospital statewide: 625
- Average Daily Patients in ICU Statewide: 68
7 Day Average Cases per 100K population
- 29 positive cases per 100,00 population, Statewide
- 22 positive cases per 100,00 population, Mid-Hudson
Useful Websites:
WHO Says Covid-19 is No Longer a Global Health Emergency
Covid-19 is no longer a global health emergency, the World Health Organization said on Friday. WHO’s International Health Regulations Emergency Committee discussed the pandemic on Thursday at its 15th meeting on Covid-19, and WHO Director-General Tedros Adhanom Ghebreyesus concurred that the public health emergency of international concern, or PHEIC, declaration should end.
“There’s still a public health threat out there, and we all see that every day in terms of the evolution of this virus, in terms of its global presence, its continued evolution and continued vulnerabilities in our communities, both societal vulnerabilities, age vulnerabilities, protection vulnerabilities, and many other things,” said Dr. Mike Ryan, executive director of WHO’s Health Emergencies Program.
DiNapoli: Local Sales Tax Collections Up 7% in First Quarter Driven by NYC
Local government sales tax collections in New York state totaled $5.5 billion in the first quarter of 2023, an increase of 7.1%, or nearly $369 million, compared to the same three-month period last year, according to a report released today by State Comptroller Thomas P. DiNapoli. “New York City’s ongoing recovery from the pandemic, as well as high inflation, continues to bolster statewide numbers. For the rest of the state, collections growth has generally returned to the rates seen before the pandemic,” DiNapoli said.
- On a monthly basis, statewide sales tax collections increased by 9.2% in January and 14.1% in February, but the growth slowed to 0.3% in March.
- New York City’s collections totaled nearly $2.5 billion for the quarter, an increase of 11.3%, or $252 million, compared to the same period the previous year. This marks the eighth consecutive quarter of double-digit growth in city collections.
- Collections for the counties and cities outside New York City, in total, grew by 3.3%, or $85 million, in the first quarter.
Read more at the Comptroller’s website
New York Becomes the First State to Ban Natural Gas Stoves and Furnaces in MOST New Buildings
New York is the first state in the country to ban natural gas and other fossil fuels in most new buildings – a major win for climate advocates. The law bans gas-powered stoves, furnaces and propane heating and effectively encourages the use of climate-friendly appliances such as heat pumps and induction stoves in most new residential buildings across the state. It requires all-electric heating and cooking in new buildings shorter than seven stories by 2026, and for taller buildings by 2029.
The state’s budget doesn’t ban gas in all new buildings. The NYS Business Council, Manufacturing Alliance and other organizations were able to secure some exceptions for large commercial and industrial buildings like stores, hospitals, laundromats, factories and restaurants, for instance. Manufacturing and Industrial processes receive some exemptions as well. But the impact on new residential buildings will be significant.
NY Fed MCT Update: Inflation Persistence Continued to Decline in March
The Multivariate Core Trend (MCT) model introduced by the NY Fed last year is a dynamic factor model estimated on monthly data for the seventeen major sectors of the PCE price index. The MCT declined to 4.2 percent in March from 4.4 percent in February (the value for February was itself revised down from 4.5 percent). By comparison, the standard twelve-month core PCE measure declined from 4.7 percent in February to 4.6 percent in March following monthly readings of 0.6 percent in January and 0.3 percent in February.
According to the latest estimates, the trend as measured by the MCT has held steady at a level below 5 percent since October 2022 after exceeding 5 percent during most of 2022. The sectoral composition shows that the decline in the trend since October 2022 is explained in equal parts by core goods and non-housing services while the decline in housing contributed only slightly to the overall trend.
US Jobless Claims Rise Most in Six Weeks, Continuing Claims Fall
Initial Jobless claims totaled 242,000 in the week ending April 29, the weekly data published by the US Department of Labor (DOL) showed on Thursday. The print follows the previous week’s 229,000 (revised from 230,000) and came in above market expectations of 240,000. “The 4-week moving average was 239,250, an increase of 3,500 from the previous week's revised average. The previous week's average was revised down by 250 from 236,000 to 235,750.”
Continuing Claims decreased by 38,000 in the week ended April 22 to 1.805 million, below the 1.863 million of market consensus. It is the lowest level in three weeks. “The 4-week moving average was 1,828,250, a decrease of 4,500 from the previous week's revised average. The previous week's average was revised down by 3,750 from 1,836,500 to 1,832,750.”
Aerospace Group Pushes OMB to Nix Contractor Emissions Proposal
The Aerospace Industries Association is calling on the Office of Management and Budget to block a harmful Federal Acquisition Regulation Council proposal that would require certain federal contractors to disclose greenhouse emissions throughout their complex supply chains.
In a new letter to OMB Director Shalanda Young, AIA's Senior Vice President of Policy Remy Nathan wrote, "At a time when small businesses acutely feel the pressure of inflation and continue to reel from pandemic disruptions, this proposal would saddle contractors with steep implementation and compliance costs and add to the already overwhelming administrative burdens that deter small businesses from working with the government—particularly with the Department of Defense."
Report: Amazon Warehouse Injuries Surpass Other Facilities in NY
The worker injury rate at Amazon warehouses and logistics facilities continues to outpace that of non-Amazon facilities in New York, according to a new report by the National Employment Law Project shared exclusively with City & State.Drawing on injury data reported by employers to the federal Occupational Safety and Health Administration, the report found that Amazon workers in the state are injured at a rate of 8.2 cases per 100 workers in 2022. That’s compared to a rate of 6.9 cases per 100 workers at non-Amazon facilities in New York.
Amazon spokesperson Maureen Lynch Vogel said in an emailed comment in response to the report. “We’ve invested more than $1 billion into safety initiatives, projects, and programs in the last four years, and we’ll continue investing and inventing in this area because nothing is more important than our employees’ safety.” Amazon also objected to the report’s description of injuries that result in the employee having to take time away from work, face restricted duties or be transferred as “serious injuries,” saying that the metric can include relatively minor injuries.
Ford Leans Into More ‘Surgical’ Approach to EV Growth
Ford Motor Co. CEO Jim Farley on May 2 told analysts and investors that the auto giant will become more “surgical” in its approach to the electric-vehicle market and will, as various competitors have said they also plan to, hone in on software and other technologies as profit drivers.
The leaders of Dearborn-based Ford have previously committed to cranking out 2 million EVs by late 2026, and the automaker is investing heavily in the United States and Canada to get there. But, pressed repeatedly about managing production volumes while building an EV business, Farley said on the call that his team plans to “not grow at any cost.” One early manifestation of that: The company will cut back on its investments in China to focus on its commercial business and its joint venture with Jiangling Motors Corp.
Maersk Earnings Weighed Down by Sharp Drop in Freight Rates and Volumes
A.P. Moller-Maersk on Thursday posted a sharp drop in first-quarter net profit as inventory corrections in Western economies sent shipping demand falling, pushing freight rates and volumes lower. The Danish shipping giant said it expects the destocking effort, the result of an enormous inventory buildup last year that left retailers swamped with goods, to wind down by the end of the second quarter but that trade volumes are still contracting.
“So far we don’t see a strong move towards normalization. Some customers are getting to the end of destocking, but it’s not consistent,” Chief Executive Vincent Clerc said in an interview. “Inventory corrections have been most pronounced across the Pacific with our capacity management being the most proactive,” Mr. Clerc said.
Biden is Expected to Tap Air Force Chief to be Nation’s Next Top Military Officer
President Joe Biden is expected to nominate Gen. C.Q. Brown, the Air Force’s top officer and the first Black person to lead any branch of the military, to succeed Gen. Mark Milley as the next Joint Chiefs chair, three people familiar with the discussion said on Thursday.
Brown’s reputation and command experience in both the Pacific and the Middle East made him the odds-on favorite to be Milley’s heir apparent dating back to the Trump administration. But his appointment seemed less of a sure thing in recent months, as the White House seriously considered Gen. David Berger, the Marine Corps commandant, for the top job. He rose through the ranks as the sole Black pilot in classrooms filled with white men, an experience he spoke about in an emotional video after George Floyd’s death in the summer of 2020.
Apple Reports Better-Than-Expected Quarter Driven by iPhone Sales
Apple reported second-fiscal quarter earnings on Thursday that beat Wall Street’s soft expectations, driven by stronger-than-anticipated iPhones sales. Apple CEO Tim Cook told CNBC that the quarter was “better than we expected.” However, Apple’s overall sales fell for the second quarter in a row. The tech giant’s shares rose nearly 2% in extended trading, and continued climbing when Apple gave forecast data points about the current quarter. The company reported earnings per share of $1.52 on revenue of $94.84 billion.
The highlight of Apple’s report was iPhone sales, which grew from the year-ago quarter even as the broader smartphone industry contracted nearly 15% during the same time, according to an IDC estimate. IPhone revenue increased 2% during the quarter that ended April 1, suggesting that parts shortages and supply chain issues that had hampered the product for the last few years — including an iPhone factory shutdown late last year — had finally abated.