Member Briefing May 8, 2024
Top Story
NY Fed: Many Places Still Have Not Recovered from the Pandemic Recession
More than four years have passed since the onset of the pandemic, which resulted in one of the sharpest and deepest economic downturns in U.S. history. While the nation as a whole has recovered the jobs that were lost during the pandemic recession, many places have not. Indeed, job shortfalls remain in more than a quarter of the country’s metro areas, including many in the New York-Northern New Jersey region. In fact, while employment is well above pre-pandemic levels in Northern New Jersey, jobs have only recently recovered in and around New York City, and most of upstate New York—like much of the Rust Belt—still has not fully recovered and has some of the largest job shortfalls in the country.
The metro areas that are lagging in the jobs recovery share some common features. First, many of them were hit particularly hard during the initial shock, leaving a bigger hole to dig out of. On average, the places that have not yet recovered experienced an employment decline of 16.1 percent during the pandemic recession compared to a 13.4 percent decline in the places that have recovered. While industry composition certainly played a role in the depth of the decline—in particular, local economies reliant on tourism suffered large losses—declines were quite steep in places where the pandemic first took hold.
NAM’s First-of-Its-Kind AI Report Includes Policy Recommendations
Artificial intelligence is improving efficiency, workplace safety, product development, machine maintenance and supply chain logistics at manufacturing facilities everywhere, according to a new, first-of-its-kind report from the NAM. “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” released yesterday, details use cases for AI in the sector, discussing how manufacturers nationwide are using it to improve lives everywhere. The report features deep dives on AI-powered technologies at manufacturers, including Johnson & Johnson, Schneider Electric and Hitachi. Legislators should “lean on” manufacturers’ deep experience when drafting AI-related legislation, said Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel. The recommendations include:
- Invest in research and development and career technical education institutions to train the modern manufacturing workforce.
- Pass federal privacy legislation to advance individuals’ privacy protections and give legal clarity that will support continued innovation by manufacturers.
- Use a risk-based approach to new AI regulations that tailors any future laws to specific use cases and minimizes the burden of compliance.
- Ensure that AI regulation is aligned globally.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Hamas talks Up a Truce, but Israel May Still Invade Rafah – The Economist
- What's In The Three-Phase Ceasefire Deal Hamas Backs, But Israel Does Not? – Reuters
- Israeli Forces Say They Have Taken Control Of Rafah Border Crossing – Forbes
- U.S.-Israel Rift Widens Over Rafah Assault - WSJ
- US Scrambles to Salvage Cease-Fire Talks as Israel Chokes Off Rafah – The Hill
- Anatomy of a Scroll: Inside TikTok’s AI-Powered Algorithms – 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
- Ukraine Arrests 2 Rogue Colonels Over Secret Plot to Murder Zelenskyy, Kyiv Says – Politico
- Putin Renews Oath for Fifth Term With Russia Under Firm Control - BBC
- Russia Detains Two US Nationals, Including a Serving Soldier – Reuters
- American Soldier Detained In Russia On Theft Charges - Forbes
- Fire and Hide: Ukraine's Artillery Pinned Down by Russian Drones – Reuters
- Ukraine Wants to Use EU Money to Grow its Military-Industrial Complex – Politico
- 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
- Hong Kong’s Economy Slowed in First Quarter, But Beat Expectations- WSJ
- World Bank’s Climate Plan: Pricier Red Meat and Dairy, Cheaper Chicken and Veggies - Politico
- From Likes to Votes: How Influencers are Changing Indian Politics - BBC
- China’s Mental Health Industry Growing Amid ‘Rise of Anxieties’ in Middle Class - SCMP
- China’s Cheating Threatens to Wreck Paris Olympics, US Anti-Drugs Chief Says – Politico
- Surfer Murders Shock Peaceful Mexico Community - BBC
- Deadlock Stalls Progress on Pandemic Treaty Talks – Agence France- Presse
- Japan Tells US that Biden's 'Xenophobia' Comment is Regrettable – Reuters
- Coffee Prices Soar as Vietnam Farmers Switch to Durian – Nikkei Asia
Policy and Politics
Economic Growth Boosts Social Security and Medicare But Funding Crisis Still Looms
Stronger-than-expected economic growth helped boost the financial health of Social Security and Medicare over the past year, though the safety-net programs will still face a funding crisis in about a decade, according to the government’s latest projections. Federal officials on Monday said they expect Social Security will deplete its combined reserves and run out of money to fully pay beneficiaries in 2035, a year later than projected last year. At that point, if Congress fails to act, the program would have only enough money to pay about 83 percent of scheduled benefits. The upward revision was fueled by economic growth that exceeded last year’s expectations as well as lower levels of applications for Social Security disability payments. That was partially offset, officials said, by a lowering of long-term assumptions about the fertility rate.
The better-than-anticipated economy also buoyed the financial health of the trust fund that pays Medicare’s hospital bills. The latest estimate finds that those reserves will be depleted in 2036, which is five years later than last year’s projection. Without congressional intervention, the program will then be able to pay only 89 percent of scheduled benefits.
SUNY Chancellor John King About Pro Hamas Campus Protests
Colleges and universities have been at the center of the national news cycle as students at numerous schools have set up pro-Palestine protest encampments. The protests started at Columbia University but have since popped up at several State University of New York schools, including the Fashion Institute of Technology, Stony Brook University, SUNY New Paltz, SUNY Purchase and Binghamton University. Last week, police arrested about 130 protesters at New Paltz and about 70 students and faculty at Purchase after school officials called in law enforcement to disperse the encampment. A day before that, police on Long Island arrested over two dozen protesters at Stony Brook.
College administrators have faced scrutiny from both the left and the right for their handling of the protests, with some denouncing the use of law enforcement to arrest student protesters and others charging that schools aren’t doing enough to protect pro-Israel Jewish students who feel unsafe on campus. SUNY Chancellor John King last month reiterated the public university system’s support for Israel and its opposition to boycotting Israeli universities and divesting school funds from Israel – key demands of most college protests. King spoke with City & State on Monday about the unrest at the state’s public universities and the ways that schools have decided to respond.
Greene Softens Threat to Force Vote on Ousting Speaker Johnson
Rep. Marjorie Taylor Greene (R-Ga.) is softening her threat against Speaker Mike Johnson (R-La.), saying she will give the Speaker more time to demonstrate his commitment to conservative priorities before forcing a vote on her resolution to boot him from power. Last week, Greene said she would “absolutely” force her motion to vacate proposal to the floor this week, citing Johnson’s track-record of working across the aisle with President Biden on major legislation.
But on Tuesday, after huddling with the Speaker for more than three hours over two days, Greene backed off that threat, saying she would not commit to moving her resolution to the floor before week’s end. The shifting strategy came after Greene spoke by phone on Sunday with former President Trump, the presumptive GOP presidential nominee who has gone out of his way to show his support for the embattled Johnson amid Greene’s ouster threat.
Health and Wellness
Here's How Ozempic Actually Works for Weight Loss
Ozempic is an injectable treatment administered once a week. The U.S. Food and Drug Administration (F.D.A.) approved a smaller dose of the drug for treating diabetes in 2017, as well as a larger dose of the drug for treating obesity in 2021, branded under the name Wegovy. As GLP-1 agonists, their active ingredient is semaglutide, which mimics a naturally occurring hormone called glucagon-like peptide-1 (GLP-1).
“We make these hormones when we eat,” says Samir Malkani, a endocrinologist at the UMass Chan Medical School’s Department of Medicine. Secreted in the gut, GLP-1 stimulates the pancreas to produce insulin, reducing the body’s blood sugar. That’s why GLP-1 agonists are effective for treating diabetes. But there are also receptors for the GLP-1 hormone in the brain, heart, and other parts of the body, meaning that GLP-1 and its artificial counterpart also trick the mind, triggering a feeling of satiety. “There are feeding centers in the brain that make us hungry and crave food,” Malkani says. “So this center in the brain is what the GLP-1 receptor drugs like Ozempic bind to [to] take away that craving.
Read more at Discover Magazine
Election 2024
- Biden Condemns Antisemitism in Holocaust Remembrance Speech Amid Campus Protests - NYT
- Biden's General Election Strategy: Less is More - CNBC
- 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: Serbia Prepares Warm Welcome in Contrast to China-EU Tensions
Chinese flags adorned highways as Serbia got ready to give a home-from-home welcome to Xi Jinping, contrasting tensions on the first leg of the Chinese president’s six-day European tour over a potential trade war with the EU. Xi prepared for his arrival in Belgrade on Tuesday night by hitting out against Nato for its 1999 bombing of the Chinese embassy in the Serbian capital, in which three Chinese journalists were killed.
Xi is spending most of his trip to Europe in Serbia and Hungary, which are seen as China-friendly, unlike most of the EU which sees Beijing as a trade and political rival. While the European Commission president, Ursula von der Leyen, restated the EU’s readiness to impose tariffs on cheap Chinese imports including electric cars after her talks with Xi on Monday, Xi can expect full support in Belgrade, and in Budapest when he travels there later this week. Before leaving France, Xi visited the Pyrenees with the French president, Emmanuel Macron. He said he would welcome more high-level talks on trade frictions, but denied there was a Chinese “overcapacity problem”, casting doubt on how much progress could be achieved on trade.
German Manufacturing Orders Remained Sluggish in March
German manufacturing orders fell unexpectedly in March, a reflection that an industrial rebound in Europe’s largest economy might have to wait. Orders were 0.4% lower than the prior month, German statistics office Destatis said Tuesday, flipping the 0.5% rise expected by a consensus of economists polled by The Wall Street Journal. It came after orders fell 0.8% in February, a significantly lower figure than the originally reported 0.2% uptick. Over a three-month period, new orders were down 4.3%.
Lower orders of aircrafts, ships and trains, as well as of metal products drove down the overall performance. But Germany’s key car industry helped offset some of the decline, with orders rising 1.1%. Excluding large-scale orders, total orders edged up 0.1%. Foreign orders rose 2.0% but domestic orders declined 3.6%, indicating still low demand among German firms and consumers.
Chinese EV Makers' Plans to Make Cars in Europe
Some Chinese carmakers are looking to set up manufacturing and assembly plants in Europe as they aim to ramp up sales in the region of lower costs cars to rival their European competitors amid slowing demand at home, the world's largest car market. European imports of Chinese-made electric vehicles (EVs) have soared in recent years, raising concerns among domestic EV producers that could suffer significant losses by a wave of cheap Chinese electric vehicles, and politicians alike.
The world's largest EV maker BYD announced in late 2023 that it will build its first European electric vehicle production base in Hungary. The plant will produce EVs and plug-in hybrids for the European market and is set to start operating in three years, the company said, opens new tab in January. The biggest Chinese rival to Tesla has been present in the country since 2016, when it established an electric bus assembling unit in the city of Komarom in northwest Hungary.
U.S. Labor Board Rules Apple Illegally Interrogated Staff And Confiscated Union Flyers
The National Labor Relations Board ruled Monday that Apple illegally questioned staff of its World Trade Center store in New York City in 2022, affirming findings from a judge who determined employees were specifically questioned over their pro-union sympathies. The board affirmed the decision of administrative law Judge Lauren Esposito, who ruled last year that Apple illegally stopped workers from placing union flyers on a table in the break room of the World Trade Center store, confiscated the flyers and interrogated staff over their “protected concerted activity.”
Esposito ordered Apple cease and desist from illegally questioning workers about union matters in addition to confiscating union flyers from the store’s employee break room. Monday’s ruling is the board’s first decision against Apple, according to Bloomberg, which first reported the ruling and cited agency spokesperson Kayla Blado. The board cannot impose fines or direct punishments against Apple for its violations. Apple didn’t immediately respond to Forbes’ request for comment, however, they are likely to challenge the decision on court.
UAW Authorizes Strike at Key Ram and Jeep Stamping Plant in Michigan
More than 1,000 workers at the Stellantis Warren Stamping Plant have voted to authorize a strike over health and safety issues, the United Auto Workers union says. The union didn’t immediately answer a question about whether a strike deadline had been set, but Stellantis said in a statement that talks are ongoing and workers are still on the job at the factory in Warren.
The UAW said grievances have been filed about problems with ventilation fans, ergonomic matting, personal protective equipment, flooding, basement lighting, oil leaks and other issues. The factory supplies more than a half-dozen Stellantis plants including Windsor, Ontario, and Saltillo, Mexico, the union said. A strike could affect production of the Ram pickup, Jeep Wrangler and Jeep Wagoneer, according to the UAW.
Online Shopping Is Saving the Bricks-and-Mortar Stores
Store owners once viewed e-commerce as a mounting threat to their survival. Now, more bricks-and-mortar stores are thriving after integrating their properties with the online shopping experience. Shoppers browse in person to see, touch or try on items before ordering them online. They are picking up or returning purchases in stores. And retailers are increasingly relying on their shops as fulfillment hubs, shipping items ordered online from store stockrooms in addition to warehouses.
Overall, nearly 42% of e-commerce orders last year involved stores, up from about 27% in 2015, according to research firm GlobalData. It is another example of how online-only retail has its limits, and why physical stores are making a comeback. After years of overbuilding that lead to a sharp contraction, retailers are on track to open more stores than they close in 2024 for the third consecutive year, according to advisory and research firm Coresight Research.
America’s War Machine Runs on Rare-Earth Magnets. China Owns That Market.
The American war machine depends on tiny bits of metal, some as small as dimes. Rare-earth magnets are needed for F-35 jet fighters, missile-guidance systems, Predator drones and nuclear submarines. The problem: China makes most of the world’s rare-earth magnets, with 92% of the global market share. Now, Washington is doling out hundreds of millions of dollars in grants and tax credits to revive magnet-making in America. Defense manufacturers are on a clock.
A U.S. law in 2018 restricted the use of made-in-China magnets in American military equipment, shriveling the list of potential suppliers to a small number in Japan and the West. By 2027, the curbs will extend to magnets made anywhere that contain materials mined or processed in China, covering nearly all of the current global supply. After three decades of post-Cold War deindustrialization, rebuilding the industry—against China’s market heft—is an uphill battle, even with government help. Only one company in the U.S. is in production of the dominant type of rare-earth magnet. “We’re not going to be able to simply flip a switch and get to where we want to be,” said Anthony Di Stasio, a senior U.S. defense official. “The only thing that you can really judge success on right now is how many positive ripples have you made from throwing the rock into the lake.”
Disney Earnings Top Analyst Estimates as Streaming Nearly Breaks Even in the Quarter
Disney reported fiscal second-quarter earnings Tuesday that beat analyst estimates after narrowing streaming losses. Revenue was in line with expectations. Disney’s total segment operating income jumped 17% as the company’s entertainment streaming applications — Disney+ and Hulu — turned a profit in the quarter for the first time. When combined with ESPN+, the streaming businesses lost $18 million in the quarter, much narrower than the $659 million loss the division reported a year earlier.
Entertainment streaming revenue (excluding ESPN+) rose 13% in the quarter to $5.64 billion, and operating income was $47 million after a loss of $587 million a year prior. Disney credited increased Disney+ subscribers and higher average revenue per user for the gains. Disney+ Core subscribers increased by more than 6 million in the second quarter to 117.6 million global customers. Total Hulu subscribers grew 1% to 50.2 million. ESPN+ subscribers fell 2% to 24.8 million. Earnings per share were $1.21 adjusted. Revenue was $22.08 billion. U.S. parks and experiences revenue rose 7% to $5.96 billion, and international sales soared 29% to $1.52 billion on increased attendance and higher prices at the Hong Kong Disneyland Resort.
VP Kamala Harris Announces More Than $100 Million to Support Auto Workers
Vice President Kamala Harris on Monday announced more than $100 million in funding and resources to support American auto workers and small auto suppliers. Historic contracts secured by the United Auto Workers with the Big Three Detroit automakers and recent organizing victories ensure that these jobs will provide comparable wages, retirement security and respect at work, the office of the VP said in a statement.
Michigan — a key swing state in the upcoming election — could decide the presidential contest this fall. In 2016, Trump won Michigan by nearly 11,000 votes or 0.2 percentage points, the tightest margin of victory of any state. Biden defeated Trump in the state in 2020 by more than 154,000 votes or just under 2.8 percentage points.
Sen. Sanders Launches Probe of 'Outrageous' Prices of Novo Nordisk's Wegovy, Ozempic
Although new weight-loss drugs such as Wegovy and Ozempic are effective, they also are prohibitively expensive. Sen. Bernie Sanders, I-Vt., wants to know why. He demanded answers in a recent letter to the CEO of Novo Nordisk, which manufactures the two drugs. "In my view, the American people should not have to pay up to $1,349 a month for prescription drugs that cost less than $5 to manufacture and can be purchased at a fraction of this price in other developed countries," the letter said. "The result of these astronomically high prices is that Ozempic and Wegovy are out of reach for millions of Americans who need them.
Novo Nordisk charges Americans with type 2 diabetes $969 a month for Ozempic, while the same drug can be purchased for $155 in Canada and $59 in Germany. The company charges Americans with obesity $1,349 a month for Wegovy, which can be purchased for $140 in Germany and $92 in the United Kingdom. A recent report from researchers at Yale University that found both drugs can be profitably manufactured for less than $5 a month.