Member Briefing November 22, 2023
Minutes Show Fed Sticking to a ‘Restrictive’ Monetary Policy
Minutes of the Federal Reserve’s meeting earlier this month show that central bankers believe the economy is outperforming, the labor market is getting better balanced but that financial conditions will need to remain tight to contain inflation. The summary of the November meeting released on Tuesday also reflected considerable uncertainty about the economy and its future path despite the Fed having raised interest rates to their highest levels in two decades.
“Participants generally noted a high degree of uncertainty surrounding the economic outlook,” the minutes noted. “As upside risks to economic activity, participants noted that the factors behind the resilience in spending could persist longer than expected. As downside risks, participants cited the possibility that the effects on households and businesses of the cumulative policy tightening and tighter financial conditions could be larger than expected, disruptions from a potential government shutdown, and the possibility that the resumption of student loan repayments could weigh on household spending by more than was expected.”
War in Israel Headlines
- Israel and Hamas: The Latest News – The Guardian
- Hamas Hostages: Stories of the Hostages Taken by Hamas From Israel - BBC
- White House Says Israel-Hamas Hostage Negotiations in ‘Delicate’ Stage – The Hill
- Inside Hamas’s Sprawling Financial Empire – The Economist
- Israel-Gaza Looms Over Shipping - WSJ
- Two Ships Divert Course Away from Red Sea Area After Vessel Seized by Houthis – Reuters
- BBC Assesses Footage of Hostages and Tunnels Released by Israel - BBC
- Xi: Only a Two-State Solution Can Bring Real Peace – South China Morning Post
- Democratic Lawmakers Press Biden on Israeli Violence in the West Bank – NBC News
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Tired Ukrainian Troops Fight to Hold Back Russian Offensive: ‘They Come Like Zombies’ - WSJ
- US Announces New Ukraine Package as Pentagon Chief Visits Kyiv – The Hill
- Russia Basks in the Oil Price Comfort Zone Ahead of OPEC+ - Reuters
- Ukraine Marks 10th Anniversary of Maidan Uprising That Foreshadowed War - NYT
- Ukraine’s Counteroffensive Is Stalled, but Not at Sea - WSJ
- German Defense Minister Announces €1.3B Weapons Package During Visit to Kyiv – Politico
- Zelenskyy Says He Survived no Fewer Than 5 Russian Assassination Attempts - NBC News
- Rupert Murdoch’s eldest Son visits Kyiv, Meets Zelenskyy – 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
CHIPS for America Unveils $3 Billion National Advanced Packaging Manufacturing Program
The U.S. Commerce Department has announced $3 billion in funding for the National Advanced Packaging Manufacturing Program. This money will be used to drive U.S. leadership in advanced packaging with an initial funding opportunity expected early next year. This includes advanced packaging piloting facilities and new workforce training programs. Advanced packaging is a cutting-edge design and manufacturing method that places multiple chips with a variety of functions in a densely interconnected two- or three-dimensional “package.”
This design paradigm can help the sector achieve the ever denser, smaller dimensions that the most advanced semiconductors require. Advanced packaging requires an interdisciplinary approach that brings together chip designers, materials scientists, process and mechanical engineers, measurement scientists, and many more. The approximately $3 billion program will be dedicated to activities that focus on: materials and substrates, equipment, tools and processes, power delivery and thermal management, photonics and connectors, a chiplet ecosystem, and co-design for test, repair, security, interoperability and reliability.
US Cutting Tool Demand Takes Downward Turn
Machine shops and other domestic manufacturers consumed $201.4 million worth of cutting tools during September 2023, falling -8.1% from the August total in a reliable indicator of overall manufacturing activity. The result from the monthly Cutting Tool Market Report also shows that cutting-tool consumption remains 4.3% higher than the September 2022 figure, and the year-to-date total for consumption at $1.85 billion is 8.1% higher than the comparable figure for January-September 2022.
The volume of cutting tool consumption is indicative of overall manufacturing activity because those purchases reflect activity across a range of manufacturing market segments served by machining operations. The CTMR report is presented by the U.S. Cutting Tool Institute (USCTI) and AMT – the Association for Manufacturing Technology. CTMR data is based on purchases reported by participating companies who comprise the majority of the U.S. market for cutting tools.
COVID 19 News - 4 More Free COVID Tests Will be Available to Each Household Ahead of the Holidays
Ahead of the approaching holidays and a potential rise in cases this winter, the government is once again allowing households to order a fresh wave of four COVID-19 tests for free online. The website, covidtests.gov, remains one of the last remaining ways Americans can secure free at-home rapid test after the end of the public health emergency last spring ended the requirement for insurance companies to cover eight tests per month.
Over the past three years, the return of winter has also brought a resurgence of COVID-19. According to modeling data from the Centers for Disease Control and Prevention, health officials are anticipating a similar number of hospitalizations this year as they saw last year, which topped nearly 45,000 per week at its peak. The test ordering site relaunched last month, offering four tests per household, and will now offer an additional four tests per household for anyone who has already ordered -- or eight tests per household for anyone who hasn't placed an order yet this fall.
Marist Survey: Nearly 6 in 10 New Yorkers Say Quality of Life is Declining
The Marist New York State poll, released Tuesday, found 59 percent of Empire State residents believe their quality of life has dipped “in the past year or so.” Only 11 percent of respondents said it has improved. Gov. Kathy Hochul’s (D) approval ratings have also fallen in the same time period, according to the survey. Just 41 percent of respondents said they approved of the job Hochul is doing — down from 49 percent in 2021. Forty-two percent said they disapproved of her job performance and 16 percent were undecided.
Asked about Hochul’s influence on the capital city of Albany, 56 percent of New Yorkers said she did not improve their quality of life in the state. Thirty-nine percent of respondents said she had a positive effect on the city — compared to 46 percent in 2021. Roughly 45 percent said Hochul’s ideology was “on the mark.” Nearly 40 percent also said she is “too liberal” and 12 percent said she is “too conservative.” the survey found. The poll was conducted Nov. 13-15 among 1,780 New York State adults. The margin of error is plus or minus 3 percentage points.
Hochul Says State Will Help NYC Weather its Budget Crunch — Without Raising Taxes
Gov. Hochul said she’s trying to find money in the state budget to help the Big Apple survive its sweeping budget cuts — while vowing not to raise taxes. “I’m talking to my budget team right now about how we can support the city because the city has to be safe and we’re working with the mayor to overcome these barriers,” she told reporters Monday. The governor’s announcement comes in the wake of controversial city budget cuts proposed by Mayor Eric Adams, which call for shrinking the NYPD and slashing funding to schools and other city services. Adams cited the spiraling cost of housing and processing thousands of migrants from the US border.
Hochul also said she’ll back up local cops in the city and elsewhere by deploying state troopers “in places they’ve never been used before” to help with gun crimes, the migrant crisis and unrest from protests stemming from the Oct. 7 sneak attack on Israel by Hamas terrorists. “In many areas, whether it’s in public housing, there is support that we’ve already given to the migrants,” she said. “I’m working hard at the state level with the control I have.
Germany Freezes New Spending as Budget Crisis Deepens
Germany’s finance ministry has imposed a spending freeze on all federal ministries, deepening a budget crisis that has rocked the ruling coalition since a bombshell ruling by the country's top court last week. The finance ministry decision, which halts most new spending authorizations, followed a ruling by the constitutional court last week that blew a €60 billion hole in the government's coffers.
The government is now bracing for the potential of far wider financial implications stemming from the ruling that may limit its ability to draw money from a variety of special funds that have been established to circumvent the country's debt brake, which restricts the federal deficit to 0.35 percent of GDP, except in times of emergency. The government's inability to find the money it needs to finance its sweeping agenda to accelerate the green transition and shield German industry from high energy costs is leading to growing calls, particularly on the political left, for the government to suspend the debt brake by declaring an emergency, as it did during the coronavirus pandemic and in the aftermath of Russia's full-scale invasion of Ukraine.
The IRS Issues Guidelines to Withdraw Employee Retention Credit (ERC) Claims Improperly Filed.
The ERC is a complex credit with precise requirements created to help small businesses during the pandemic, and the IRS has received approximately 3.6 million claims for the credit over the course of the program. The agency announced in September a moratorium at least through the end of this year on processing new claims so it can protect small business owners from scams. Under the new withdrawal option, certain employers who have filed an ERC claim but have not received a refund can withdraw their submission and avoid future repayment, interest and penalties. Employers that have submitted an ERC claim that’s still being processed can withdraw their claim and avoid the possibility of getting a refund for which they’re ineligible.
“The withdrawal option allows employers with pending claims to avoid future problems, and we encourage them to closely review the withdrawal option and the requirements. We continue to urge taxpayers to consult with a trusted tax professional rather than a marketing company about this complex tax credit.” said IRS Commissioner Danny Werfel.
OSHA Fines Gas Manufacturer $201,573 After Plant Explosion Leaves Workers With Serious Injuries
An OSHA investigation has determined that Air Liquide Advanced Materials Inc. could have prevented an explosion earlier this year that resulted in several employees suffering serious injuries. The company, which manufactures industrial gas, failed to follow required operating procedures at its plant in High Springs, Florida, where diborane is produced, distilled, mixed, and transferred. The investigation ultimately determined that the company required workers to use equipment that was not safe in the presence of flammable chemicals and vapors. Air Liquide Advanced Materials was cited for 12 serious violations and faces $201,573 in penalties.
The accident happened when a young product technician used a heat gun to transfer gas from an aluminum source cylinder to a steel cylinder. The worker suffered a host of severe injuries, including third-degree burns and a leg amputation. Four more employees and several first responders also had to be taken to the hospital.
Cyberattack Impacts U.S. Automotive Manufacturing
A cyberattack on Chinese automotive supplier Yanfeng International Automotive Technology Co. Ltd. is affecting Stellantis production, potentially including Chrysler, Dodge, Jeep, and Ram models. The Cyber Express reported that Yanfeng’s website became inoperable following the attack, leaving many to wonder if the attack on the just-in-time parts manufacturer will have far-reaching financial repercussions.
According to Automotive Logistics, Stellantis has yet to reveal which plants were affected or any additional details. Yanfeng provides the automaker with a variety of parts, including seats and other interior components, when needed. In addition, Carscoops is reporting that Yanfeng also supplies parts to General Motors, but the automaker has not commented on whether the cyberattack will affect their production. In a statement to The Detroit News, spokesperson Anne Marie Fortunate said, "Due to an issue with an external supplier, production at some of Stellantis’ North America assembly plants has been disrupted
Holiday Shoppers May Be Leaving Black Friday And Cyber Monday Behind
More than half of American shoppers are expected to skip Black Friday, the traditional start of holiday shopping season, but they won’t sit out the holiday frenzy entirely. "Deal-hungry consumers will play a game of chicken with retailers this year,” Forbes' senior contributor for luxury retail Pamela Danziger predicts. “They’ll wait till later in the season for retailers to yield and give them even deeper discounts.”
Still, overall holiday retail sales are estimated to climb more than 3% from last year to $957 billion, the National Retail Federation reports, and seasonal spending could grow as high as $1.6 trillion if you include festive food and beverage, according to ICSC, a trade group of malls and shopping centers. "Economists have been predicting all year that a spending slowdown was on the horizon, but consumers have turned out to be more resilient than most forecasters expected," our retail contributor Joan Verdon said, adding: "Most of the early holiday spending forecasts thus far have ranged from cautiously optimistic to upbeat."
Lowe’s Cuts Sales Outlook as Homeowners Take on Fewer Projects
Lowe’s on Tuesday lowered its full-year sales outlook, after customers spent less on do-it-yourself projects and caused its fiscal third-quarter sales to tumble nearly 13% year over year. The home improvement retailer said it now anticipates sales will total about $86 billion for the fiscal year. It had previously expected a range of $87 billion to $89 billion. It projects comparable sales will drop by about 5% this fiscal year, worse than a previously anticipated a decline of between 2% and 4%. The company expects adjusted earnings per share to be about $13, lower than its previously expected range of $13.20 to $13.60.
Lowes earnings per share were $3.06. Revenue was $20.47 billion vs. $20.89 billion expected. Lowe’s, like its larger rival Home Depot, faces cooling demand as Americans’ huge, Covid pandemic-fueled appetite for home improvement moderates and higher mortgage rates inject more uncertainty into the housing market.
Best Buy Cuts Outlook on ‘Uneven’ Demand Before Black Friday
Best Buy cut its full-year sales outlook Tuesday, as the company weathers a period of cooler demand and prepares for price-conscious holiday shoppers. The consumer electronics retailer beat Wall Street’s quarterly earnings expectations, but fell short on revenue. Best Buy said it now expects revenue to range from $43.1 billion to $43.7 billion for the fiscal year, down from its previous range of between $43.8 billion to $44.5 billion. The retailer said it expects comparable sales to decline by between 6% and 7.5%, lower than its previous guidance of a 4.5% to 6% drop.
Best Buy’s earnings per share were $1.29 adjusted vs. $1.18 expected. Revenue was $9.76 billion vs. $9.90 billion expected. Best Buy, like home improvement retailers, is seeing demand moderate as it follows years of increased purchases of computer monitors, home theaters, and appliances during the Covid pandemic.
How the U.S. Market Went Sideways for Wind-Power Giant Ørsted
Denmark’s national oil-and-gas company, now known as Ørsted, bet big on renewables a decade ago. It renounced fossil fuels, renamed itself after a 19th-century physicist and embarked on a debt-fueled expansion, becoming the biggest offshore-wind developer outside China. A hotbed of activity was the U.S., where Ørsted made a play at dominating the nascent wind market.
The company’s cancellation of two New Jersey wind farms on Halloween drew charges of incompetence from the governor and sparked what could be a $300 million legal spat. In New York, a pricing dispute has threatened to delay Albany’s renewable-energy goals. A New England utility partner is trying to unload stakes in three joint projects. Suppliers across the region are in limbo. Ørsted was more vulnerable than most to a surge in inflation and interest rates because stiff competition had already driven down power prices and expected returns from offshore-wind projects, former executives say. Some analysts say higher prices planned for the next round of projects in New York and the U.K. could help the industry rebound and aid states in upgrading aging energy infrastructure.
P&W Draws $870M USAF Engine Deal
Pratt & Whitney has been assigned an $870-million long-term contract by the U.S. Dept. of Defense, covering the TF33 engine, the powerplant for U.S. Air Force B-52 bombers and E-3 Sentry AWACS aircraft. The TF33 is the USAF designation for Pratt & Whitney’s JT3 turbofan commercial engine, first flown 60 years ago and has recorded over 72 million flight hours. More than 1,000 of the engines are in service today.
Through the Defense Logistics Agency, the engine builder will perform maintenance and update service for nearly 1,000 engines in service over a six-year period, with an option to extend for another four years. The services to be provided will inclFedude maintenance, spare parts, program management, field service, repairs, and engineering support. The work will be centered at Tinker Air Force Base, Okla., additional USAF locations, and Pratt & Whitney's Southern Logistics Center located in Atlanta. Pratt & Whitney describes the program as a first-of-its-type “holistic sustainment solution” that will reduce obsolescence and support the USAF’s wartime readiness into the foreseeable future.
Council Member Mid-Hudson Works Adds North River Roasters “Coffee With a Cause”
Council member Mid Hudson Works (MHW) is a 501c3 non-profit organization and has been offering crucial services to the Hudson Valley Community for over 75 years. They provide underserved populations with workforce development training and workforce reintegration support programs. Their primary focus is assisting clients that are veterans and individuals with physical and/or medical disabilities. Many of the clients we serve have suffered a life-altering event, or have served in the military where workforce reintegration is a crucial part of returning to life back home. This is, unfortunately, not always an easy resource to find and is sometimes easier said than done.
In 2015 North River Roasters Roastery was donated to Mid-Hudson Workshop for the Disabled, Inc. All of their beans are certified as either organic, fair trade or both. Some of our beans are also certified as bird friendly. Roasted and packed at Mid Hudson Works North River Roasters coffee makes a perfect gift this holiday season. Their delicious coffee has the added benefit of supporting disabled veterans in the community.