Skip to content

Member Briefing November 11, 2024

November 11, 2024

Posted By: Harold King in Daily Briefing,

Top Story

U.S. Worker Productivity Rises Moderately In Third Quarter; Labor Costs Elevated

U.S. worker productivity increased moderately in the third quarter, resulting in only a gradual slowdown in labor costs that could cast a cloud over the inflation outlook. Nonfarm productivity, which measures hourly output per worker, increased at a 2.2% annualized rate last quarter, the Labor Department's Bureau of Labor Statistics said on Thursday. Data for the second quarter was revised lower to show productivity rising at a 2.1% pace instead of the previously reported 2.5% rate. Productivity increased at a 2.0% pace from a year ago. The moderate pace of productivity does not bode well for the inflation and interest rate outlook.

Unit labor costs - the price of labor per single unit of output - rose at a 1.9% rate in the July-September quarter. That followed a 2.4% pace of expansion in the second quarter. Labor costs increased at a 3.4% rate from a year ago. Compensation rose at a 4.2% rate last quarter after increasing at a 4.6% pace in the second quarter. It advanced at a 5.5% rate from a year ago.

Read more at VOA

China's Exports Soar Past Forecast As Factories Front-Run Tariff Threat

China's outbound shipments grew at the fastest pace in over two years in October as factories rushed inventory to major export markets in anticipation of further tariffs from the U.S. and the European Union, as the threat of a two-front trade war looms. With Donald Trump being elected as the next U.S. president, his pre-election pledge to impose tariffs on Chinese imports in excess of 60% is likely to spur a shift in stocks to warehouses in China's No.1 export market.

Export momentum has been one bright spot for a struggling economy in China as household and business confidence has been dented by a prolonged property market debt crisis. Outbound shipments from China grew 12.7% year-on-year last month, customs data showed on Thursday, blowing past a forecast 5.2% increase in a Reuters poll of economists and a 2.4% rise in September. Imports fell 2.3%, compared with expectations for a drop of 1.5%, turning negative for the first time in four months. China's exports to the U.S. increased an annual 8.1% last month, while outbound shipments to Europe jumped 12.7% over the same period.

Read More at Forbes

BLS: Manufacturing Injury, Illness Worker Rate Sank 10% In 2023

Injuries and illnesses among manufacturing workers decreased 10% in 2023 to 355,800, according to data released Friday morning from the Department of Labor’s Bureau of Labor Statistics. The number of total injuries declined approximately 6% year over year, down to 326,400 from 347,800 in 2022, according to the agency’s estimates from the Survey of Occupational Injuries and Illnesses. Respiratory illness — caused by exposure to hazard materials — saw a significant drop at 84%, from 22,100 cases to 3,400 cases YOY.

For every 10,000 full-time manufacturing workers, there were 2.6 work injury cases in 2023, and 2.7 illnesses. Together, it pulled an average of .9 cases with days away from work, according to the agency. OSHA investigated 826 worker deaths in fiscal year 2024, which began Oct. 1, 2023 and ended Sept. 30, an 11% decline from fiscal year 2023. Excluding COVID-19 deaths, the percentage is the lowest worker fatality number OSHA was required to investigate since fiscal year 2017.

Read More at Manufacturing Dive

Global Headlines

Middle East

Ukraine

Other Headlines

Policy and Politics

5 Takeaways From New York 2024 Election Results

New York voters on Tuesday approved a new constitutional amendment, mainly kept their state legislative incumbents and provided a sort of mixed bag for both major political parties whose response to this year’s election results will be crucial in the years to come.

Democrats topple some 2022 GOP gains in the House: Just like the state defied the national environment two years ago in losing several Democratic-held congressional seats while national Democrats largely held their own, Democrats netted several House seats while the GOP made congressional gains across the country.
Republicans make New York look redder: While Republicans lost those House seats and Mike Sapraicone lost the U.S. Senate race, the GOP made some historic noteworthy gains on the state level which Democrats have dominated in for more than a generation.
Proposition 1 passes overwhelmingly: While Democratic statewide candidates didn’t crack 60% of the vote, Proposition 1, the lone statewide ballot measure this year, did.
Democrats keep majorities in state Legislature, but lose Senate Supermajority: Despite Republicans chipping away at Democratic margins in the state, Democrats will maintain their strong control of unified government in Albany.
Results and response are high stakes for Hochul: With this year’s elections out of the way, it means the 2026 race for governor and other statewide offices has begun.

Read more at NY State of Politics

Trump Likely To Uphold CHIPS Act, Policy Experts Say

President-elect Donald Trump is unlikely to roll back the Biden administration’s CHIPS and Science Act, despite his campaign rhetoric on the bill, experts say. The legislation, which provides incentives for chipmakers to set up manufacturing in the U.S., became a point of contention in the final month of the election cycle. Trump criticized the bill and its price tag. House Speaker Mike Johnson, a Republican, then said that his party “probably will” try to repeal the law. Johnson later walked the statement back.

Despite signaling he’s “not thrilled” about the bill, Trump is probably not going to roll it back, Paul Triolo, senior vice president for China and technology policy lead at Albright Stonebridge, told CNBC’s “Squawk Box Asia” on Thursday. Both Democrats and Republicans supported the passage of efforts to boost semiconductor manufacturing investment in the U.S., Chris Miller, author of “Chip War,” said earlier this year. He expected such policies would remain a priority regardless of the elections.

Read more at CNBC

Jackson Lewis Offers Insights on President-Elect Trump’s Impact on Employer Issues

What changes in workplace law should employers anticipate given both Donald J. Trump’s election to be the 47th U.S. president and the results of Congressional and state races?

Jackson Lewis' post-Election 2024 coverage explores key employer issues and offers practical insights analyzed in light of the president-elect’s proposed policies to date. They look at Nine Workplace Considerations including DEI initiatives, private contractors, paid leave and labor relations.

See all nine at Jackson Lewis

Health and Wellness

‘Walking Pneumonia’ Is Surging Ahead of Cold and Flu Season

If you’ve had a lingering cough recently, there is a chance the culprit wasn’t Covid-19, flu or RSV, but mycoplasma pneumoniae. Levels of this milder lung infection—which can lead to “walking pneumonia”—are 10 times greater than last year, according to the Centers for Disease Control and Prevention. Though the CDC doesn’t officially track the disease, it issued an alert last month noting the rise in cases. Levels of walking pneumonia, so named because patients often feel well enough to go about their normal daily activities, typically peak every three to seven years.

Cases of walking pneumonia are up across all age groups, with children 17 and under experiencing the largest rise. Symptoms of the respiratory illness caused by mycoplasma pneumoniae can include cough, fever and a sore throat, say doctors. If the bacteria damages the throat and lungs, the result can be a less severe form of pneumonia. Someone with typical pneumonia feels ill enough to stay home in bed, but if you have walking pneumonia, it might take an X-ray of your lungs to reveal significant infection.

Read more at The WSJ

NYS COVID Update

The Governor updated COVID data for the week ending November 8^th.

Deaths:

Weekly: 31
Total Reported to CDC: 84,398

Hospitalizations:

Average Daily Patients in Hospital statewide: 460
Patients in ICU Beds: 44

7 Day Average Cases per 100K population

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

Useful Websites:

Transition 2024

Industry News

U.S. Ordered TSMC To Halt Shipments To China Of Chips Used In AI Applications, Source Says

The U.S. ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in artificial intelligence applications starting Monday, according to a person familiar with the matter. The Department of Commerce sent a letter to TSMC imposing export restrictions on certain sophisticated chips, of 7 nanometer or more advanced designs, destined for China that power AI accelerator and graphics processing units (GPU), the person said.

The U.S. order, which is being reported for the first time, comes just weeks after TSMC notified the Commerce Department that one of its chips had been found in a Huawei AI processor, as Reuters reported last month. Tech research firm Tech Insights had taken apart the product, revealing the TSMC chip and apparent violation of export controls. Huawei, at the center of the U.S. action, is on a restricted trade list, which requires suppliers to obtain licenses to ship any goods or technology to the company. Any license that could aid Huawei’s AI efforts would likely be denied.

Read More at CNBC

Sony Profit Jumps As Games Offset TV Production Delays

Sony said on Friday its operating profit rose 73% in the July-September quarter, with strong sales in its game and network business helping to offset weakness in the production of television shows. Sony, whose businesses also include music and chips, maintained its profit forecast of 1.31 trillion yen ($8.51 billion) for the year to March, largely in line with the 1.34 trillion yen estimate of 24 analysts polled by LSEG.

Sony's second quarter operating profit soared to 455.1 billion yen from 263 billion yen a year before, helped by solid sales of image sensors. As well as a rise in third-party software sales, Sony President Hiroki Totoki highlighted improving profitability in its game hardware business. Although Sony's sales of its PlayStation 5 were down 22% from the second quarter in 2023 at 3.8 million, it maintained a sales forecast of 18 million units for this financial year. Sony's pictures segment generated a profit of 18.5 billion yen in the quarter, down from 29.4 billion yen a year ago, in part due to the delayed releases of TV series after Hollywood's strikes in 2023.

Read more at Reuters

As Boeing Restarts, FAA to Increase Oversight

As Boeing prepares to resume operations in Washington and Oregon following the seven-week strike by thousands of International Assn. of Machinists and Aerospace Workers, the Federal Aviation Administration announced it will expand its oversight of the 737 MAX program there. Boeing workers are not required to return to work until November 12, but the agency confirmed that FAA Administrator Mike Whitaker has advised Boeing CEO Kelly Ortberg that the company must ensure its safety and quality management systems are in place when production resumes.

The oversight effort concerns the 737 MAX program, though the strike also halted assembly of 777 aircraft. The initial audit of the 737 MAX program that FAA completed in February turned up 97 examples of noncompliance in Boeing’s manufacturing process control, parts handling, and product control. Boeing officials have been meeting regularly with FAA to report on its progress in bringing the operations into conformity with production-process control system. In October, FAA announced it plans to start a new review of Boeing’s safety-management systems, covering details like risk-assessment quality, resource allocation, and adherence to regulatory requirements.

Read more at American Machinist

Boeing Close To Funding Agreement To Help Supplier Spirit Aero, Source Says

Spirit AeroSystems and Boeing are close to reaching a funding agreement that would give a cash lifeline to the struggling Boeing supplier, an industry source familiar with the matter said. A deal could be announced in the next few days, said the source, who spoke on condition of anonymity about the private talks, although he cautioned that it has not yet closed. Spirit Aero is juggling financial and production challenges, having issued a liquidity warning on Tuesday after four years of losses. It expects to burn around $450 million to $500 million in cash over the last three months of 2024 and first half of 2025, according to filings.

Boeing, which plans to buy its one-time subsidiary, is trying to revive its battered supply chain and jet production after a weeks-long strike halted most of its output. Spirit said this week it is seeking ways to raise liquidity including possible customer advances. The supplier has previously disclosed it has drawn down a $350-million bridge loan set up when Boeing agreed to acquire the supplier, and previous advances from both the U.S. planemaker and rival Airbus (AIR.PA), opens new tab that Spirit has not repaid.

Read more at Reuters

Army Says The US Will Restart Domestic TNT Production At Plant To Be Built In Kentucky

The U.S. Army awarded a $435 million contract on Friday to build a TNT production plant in western Kentucky that will become the first domestic source for the explosive material in decades, officials said. Trinitrotoluene, or TNT, is used in artillery shells, bombs and grenades. Establishing domestic production of TNT is vital for national defense, the Army said. The current supply chain for the crucial explosive material is entirely reliant on overseas sources, it said.

The new TNT plant in Kentucky is part of the Army's strategy to ramp up munitions production to ensure the U.S. military has “timely access to essential resources,” said Maj. Gen. John T. Reim. The contract was awarded to Repkon USA to construct the plant at Graham in Muhlenberg County, about 136 miles (219 kilometers) southwest of Louisville. The project is expected to create about 200 to 250 construction jobs and about 50 permanent jobs.

Read more at Yahoo

Nissan To Axe 9,000 Jobs, Cut Production On Weak China, US Sales

Nissan Motor will cut 9,000 jobs and 20% of its global manufacturing capacity, the automaker said on Thursday, as it scrambles to reduce costs by $2.6 billion in the current fiscal year amid a sales slump in China and the U.S. The plans underline the vulnerability of Japan's third-largest automaker, having never fully recovered from the disarray that led to the 2018 ouster of former chairman Carlos Ghosn and scaling back of the partnership with Renault. Nissan's global sales fell 3.8% to 1.59 million vehicles for the first half of the financial year, largely due to a 14.3% drop in China. U.S. sales fell almost 3% to about 449,000 vehicles. Together, the two markets account for nearly half of Nissan's global sales by volume.

Nissan cut its annual profit outlook by 70% to 150 billion yen ($975 million) on Thursday, the second time it lowered the forecast this year. Like many foreign automakers, it is struggling in China where BYD and other local manufacturers are gobbling up market share with affordable EVs and hybrids that boast advanced technology. But Nissan's graver problem may be in the United States, where it lacks a credible line-up of hybrid cars. That's in contrast to Japanese rival Toyota which has seen a boom in demand for gasoline-petrol hybrid cars.

Read more at Reuters

Japan Creates and Sends First Wood Satellite Into Space

On Tuesday, while everyone here in America was either casting votes or impatiently waiting for the results of our Presidential election, Japanese researchers sent the world's first wooden satellite to space. Named LignoSat after the Latin word for wood, the satellite was developed by Kyoto University in collaboration with Sumitomo Forestry, a homebuilding company. It was included in a SpaceX mission to the International Space Station (ISS) and will be released into Earth's orbit for six months.

Constructed of honoki wood, a type of magnolia tree, the satellite will let the researchers experiment to see if wood offers the durability that metal does when faced with the harsh environment of space. Obviously, if the experiment is successful, they plan on making more wooden satellites. "Early 1900s airplanes were made of wood," said Kyoto University forest science professor Koji Murata. "A wooden satellite should be feasible, too." The team of researchers conducted a 10-month experiment on the ISS and discovered that honoki wood was the best type of timber suited for space applications. The satellite also doesn't use any screws or wood glue but instead was constructed by using a traditional Japanese crafts technique that doesn't require the aforementioned assembly components.

Read more at New Equipment Digest

Hershey Invests $500M To Improve Cocoa Farming Struggles

In a June ESG report, Hershey said it had a goal of establishing full sourcing visibility for its cocoa volume in both the Ivory Coast and Ghana by 2025. The company marked that goal’s progress as 89% complete at that time. As of December 2023, the company had invested over half (51%) of its $500 million investment commitment in “Cocoa For Good,” and last month month brought it to fruition. The chocolate industry has been hampered by cocoa’s supply chain woes over the past year, and the side effects are being passed along to consumers.

Hershey said its partnerships with the cocoa-producing cooperatives is a “a memorandum of understanding,” that mainly looks to improve farmers livelihoods. The announcement also coincided with the annual National Cocoa and Chocolate Days held in Abidjan, Côte d’Ivoire. “Improving farmer incomes requires a holistic approach and collaboration across public and private sectors,” said Tricia Brannigan, vice president and chief procurement officer at Hershey.

Read more at Supply Chain Dive

University of Rochester President Calls for the Firing of Embattled Superconductivity Scientist

The president of the University of Rochester has recommended firing Ranga Dias, a star faculty member who claimed to have discovered a room-temperature superconductor, for research misconduct. Rochester President Sarah Mangelsdorf made her recommendation in an August letter addressed to the chair and vice chair of the Rochester Board of Trustees. The Wall Street Journal has seen the letter. As of Monday, Dias still holds appointments at the physics and mechanical-engineering departments, but no longer teaches classes or supervises students. A spokesperson for the Rochester, N.Y., university declined to comment on when, or if, the board would act on Mangelsdorf’s recommendation.

Dias’s bold scientific claims about the discovery of new superconductors—rare materials that pass electrical current without loss of energy—drew worldwide media coverage amid persistent allegations from his peers that he had manipulated data and plagiarized material. A university investigation into his work completed in February found that he manipulated data in four studies, including in a blockbuster paper published in March 2023 in the journal Nature—and retracted a year ago—that claimed the discovery of a room-temperature superconductor. The investigation also found that Dias plagiarized material in a grant proposal to the National Science Foundation for nearly $795,000.

Read more at The WSJ

Member Briefing November 12, 2024November 12, 2024 Member Briefing November 7, 2024November 7, 2024