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Member Briefing November 25, 2024

November 25, 2024

Posted By: Harold King in Daily Briefing,

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Economists See Stubborn Inflation, Gradual Fed Rate-Cut Tempo

Economists see the Federal Reserve taking a more measured approach to interest-rate cuts next year amid stubborn inflation and limited prospects that price pressures can cool much under President-elect Donald Trump. The Fed’s preferred inflation gauges will run a touch faster in the coming year than expected last month, according to the latest Bloomberg monthly survey of economists. They project the so-called core personal consumption expenditures price index — which excludes the volatile food and energy categories — to advance 2.3% on average next year. That’s up from the 2.2% projection in last month’s survey.

Economists also adjusted their fourth-quarter 2024 projections higher in the wake of firmer inflation readings more recently, helping explain a more patient Fed. While forecasters still largely expect central bankers to lower rates next month for a third straight meeting, they anticipate policymakers will hold borrowing costs steady in January. For all of 2025, economists now see a 3.25% to 3.5% range for the federal funds rate, indicating one less rate cut than they projected a month ago. Investors and economists have generally pared back expectations for how low rates will fall. Economists also marked up their 2025 economic growth projections. Forecasters see gross domestic product averaging 2% in 2025, up from last month’s 1.8% forecast.

Read More at Yahoo Finance

U.S. Consumer Sentiment Ticks Up, Shows Post-Election Partisan Flip

U.S. consumer sentiment ticked up for a fourth straight month in November, led by a big upswing in sentiment among Republicans following Donald Trump's victory in the presidential election. The University of Michigan's Consumer Sentiment Index climbed to 71.8 this month, the highest since April, from 70.5 in October. The result was shy of the median estimate among economists polled by Reuters for a reading of 73.7 and was lower than the preliminary reading of 73.0, a pulse-taking that was completed before the Nov. 5 election.

Overall sentiment among Republicans surged by 15.5 points, the largest increase since Trump won the 2016 election. It plunged 10.1 points among Democrats in the wake of the loss by Vice President Kamala Harris, their party's nominee. It also ticked down among political independents, whom exit poll data from Edison Research showed narrowly favored Harris over Trump. Meanwhile, households continued to see muted inflation pressures in the year ahead but do see greater price-rise risk over Trump's coming four-year term. The survey showed one-year inflation expectations at 2.6%, the lowest since December 2020, but five-year expectations rose to 3.2%, the highest in a year, from 3.0% in October.

Read More at Reuters

Existing-Home Sales Rise In October But Are Expected To Remain Sluggish For The Time Being

Existing-home sales rose in October as buyers seized on a period of relatively low mortgage rates. Sales of previously owned homes rose 3.4% to an annual rate of 3.96 million in October, the National Association of Realtors said Thursday. The existing-home sales figure in October rose but was still under 4 million, a key threshold for the real-estate industry, indicating that home-sales activity remains at a lower level tForbeshan before the pandemic.

The median price for an existing home in October rose 4% as compared with the year before, to $407,200. That’s the highest price on record for the month of October. Nineteen percent of homes were sold above list price, down slightly from 20% a month ago. Homes received an average of 2.5 offers. The total number of homes listed on the market in October rose 19% from last year, to 1.37 million units. There is a 4.2-month supply of unsold inventory, which is considered a balanced market.

Read more at Marketwatch

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Policy and Politics

Head Of Cornell Population Center Discusses Potential Future Population Loss In New York

In 1940, New York state sent 45 congressional representatives to Capitol Hill. By the year 2000, that number had dropped to 29. New York currently has 26 members of Congress, and according to a new report from Cornell University, the state’s population could shrink by 2 million more people over the next 25 years. If that happens, it could lead to a loss of another two or more members of Congress; and the fewer representatives New York has in D.C., the less power and money the state receives, and the fewer electoral votes it will have.

Matt Hall, a professor of public policy and sociology, as well as director of the Cornell Population Center, discussed the reasons New York state’s population is shrinking and how policy makers could stem the tide with Capital Tonight host Susan Arbetter.

Watch at NY State of Politics (8 minutes)

Democrats Strike Deal To Get More Biden Judges Confirmed Before Congress Adjourns

The Senate won’t hold votes on four of President Joe Biden’s appellate court nominees as part of a deal with Republicans to allow for speedier consideration of other judicial nominations and bring Biden within striking distance of the 234 total judicial confirmations that occurred during President-elect Donald Trump’s first term. Currently, the number of judges confirmed under Biden totals 221. Republicans forced numerous procedural votes this week and late-night sessions as Senate Majority Leader Chuck Schumer, D-N.Y., attempted to move ahead in getting more of Biden’s nominees confirmed before Congress adjourns and Republicans take control of the chamber in January.

A Senate Democratic leadership aide said Thursday a time agreement had been reached to allow for consideration of seven district court judges the week following Thanksgiving. Plus, another six district judges would be placed on the Senate executive calendar, making it possible for them to be considered on the Senate floor in December. Excluded from that list were four circuit judge nominations awaiting a floor vote: Adeel Abdullah Mangi of New Jersey, nominated for the Third Circuit Court of Appeals; Karla M. Campbell of Tennessee, nominated for the Sixth Circuit; Julia M. Lipez of Maine, First Circuit; and Ryan Young Park of North Carolina, Fourth Circuit.

Read more at The AP

Elon Musk’s DOGE Takes Aim At Federal Agencies—Here’s Where Cuts Could Be Made

Elon Musk and Vivek Ramaswamy, co-heads of the upcoming Trump administration’s Department of Government Efficiency commission, also known as “DOGE”, have vowed to slash federal spending by “at least $2 trillion,” Musk suggested last month at a Trump rally—targeting agencies like the Pentagon and the Education Department—though it’s unclear how he arrived at that figure.

Pentagon: Ramaswamy has suggested that one of the priorities of the commission would be to cut the defense department budget, saying the agency has “nearly a trillion dollars of budget—they can’t even tell you where it goes” (Musk’s SpaceX has a reported $3.6 billion in federal contracts with the agency), but specific cuts remain unclear.
Department of Education: Trump has called for the dismantling of the department for several years, and the commission is doubling down as Ramaswamy said that he expects “mass reductions” and “certain agencies to be deleted outright,” he told Fox News in response to a question about the department.
Corporation for Public Broadcasting: Musk and Ramaswamy wrote an op-ed in the Wall Street Journal this week, in which they said “$535 million a year” spent on the nonprofit overseeing broadcasting networks PBS and NPR was an example of “unauthorized” spending and money used in ways “that Congress never intended,” though the organization was created and authorized by Congress.
Other areas include International organizations, the Internal Revenue Service, Federal Trade Commission, Department of Justice and Securities and Exchange Commission.

Read more at Forbes

Health and Wellness

U.S. May See A Healthy Thanksgiving—But Covid, RSV Could Spike Before Christmas, CDC Warns

Covid-19 positive test rates have hit a five-year Thanksgiving low going into the first holiday of the winter season, and respiratory disease levels of the flu and RSV are also at pre-pandemic lows, but the Centers for Disease Control and Prevention warns that trend is likely to reverse before Christmas comes around. On Wednesday, the CDC warned it expects to see an increase in Covid and RSV levels in the coming weeks as large gatherings, travel and more time indoors allow disease to spread more easily person-to-person.

The weekly test positivity rate for COVID in the week of Nov. 9, the latest data available, was 3.6%, down significantly compared to the same weeks in 2023 (10.1%), 2022 (6.8%), 2021 (7%) and 2020 (13.6%).

The positivity rate dropped between the first and second weeks of November this year, from 4.7% to 3.6%, the first time in five years the rate hasn't risen between those two weeks headed into Thanksgiving.
Weekly deaths from Covid are also at an all-time low—250 people's deaths were attributed to the illness in the week of Nov. 9, according to the CDC, the lowest week since tracking began in March 2020.
Wastewater monitoring data from the CDC also shows transmission of Covid-19 was "low” in the first week of November (the second-lowest measurement on a five-point scale where "minimal" is the lowest level of viral activity) and influenza and RSV levels are minimal.
Covid transmission rates are low or minimal in most states with the exception of New Mexico (very high); Montana, Wyoming and South Dakota (high); and Maine, Massachusetts, Maryland, Michigan, Missouri, Minnesota, Nebraska, Idaho and Nevada (moderate).
RSV rates are increasing in southern, central and eastern states and emergency department visits and hospitalizations for young children are on the rise in the same areas.

Read more at Forbes

NYS COVID Update

The Governor updated COVID data for the week ending November 15^th.

Deaths:

Weekly: 16
Total Reported to CDC: 84,471

Hospitalizations:

Average Daily Patients in Hospital statewide: 427
Patients in ICU Beds: 53

7 Day Average Cases per 100K population

2.2 positive cases per 100,00 population, Statewide
2.8 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

Transition 2024

Industry News

Big Drop in Cutting Tool Demand

U.S. manufacturers’ and machine shops’ cutting-tool demand fell -10.0% from August to September, totaling $188.7 million for the month. That figure represents a drop of -6.3% from September 2023 and brings the year-to-date total for cutting-tool demand to $1.86 billion, slightly higher than the January-September 2023 total. “September shipments were hurt by the machinists’ union strike at Boeing, eating into one of the largest sources of recent cutting tool demand,” offered Mark Killion, director of U.S. Industries at Oxford Economics. “In addition, typical seasonal weakness was compounded by retrenchment in output of other customer sectors, such as business equipment, materials, and supplies for construction.”

Cutting-tool shipments, which parallels current manufacturing activity, are distinct from machine-tool demand, which depicts manufacturers’ anticipation of future activity. In the case of the latter, September 2024 delivered a solid revival in demand. “Inflation, interest rates, raw material costs, and pre-election uncertainty put many projects on hold,” AMT’s Cutting Tool Product Group chairman Jack Burley offered. “I do not think we will see any significant improvements until after the first quarter of 2025, when spindle utilization is expected to increase.”

Read more at American Machinist

In Remote Quebec, Mining Giant Glencore Is Turning America’s Electronic Trash Back Into Treasure

One of the world’s largest miners is digging into America’s junk drawers, old phones and landfills. The quarry: bits of copper to meet the needs of the energy transition and data boom. Shredded cellphones, obsolete computer cables and chewed-up cars are heaped 30 feet high outside Glencore’s 97-year-old copper smelter deep in Canada’s sparsely populated boreal forest. There, the scrap is melted with copper concentrate from mines to produce fresh slabs of metal. Unlike commodities such as oil or corn, copper never goes away and is infinitely recyclable.

Old electronics have long augmented the smelter’s input. But these days Glencore and other copper producers are casting wider nets for scrap and spending big to boost recycling capacity. Glencore estimates that global copper supply must grow by about one million metric tons a year through 2050. That would require annually adding the equivalent of the world’s largest mine, Chile’s Escondida.

Read more at The WSJ

Volkswagen Faces Prospect of Strikes in December as Talks With Unions Set to Continue

Volkswagen faces potential employee walkouts starting next month as the latest round of talks with union leaders over how to cut costs in an increasingly challenging auto industry ended without an agreement. The German car maker spent weeks negotiating with the IG Metall union as it seeks to implement sweeping cost cuts across its domestic business. Management argued that an urgent reset of its cost base is needed as the group contends with waning demand for electric vehicles, fierce competition from lower-cost Chinese peers and a costly domestic manufacturing footprint.

IG Metall said Thursday that the latest round of talks ended without a breakthrough, with negotiations due to resume on Dec. 9. Union boss Daniela Cavallo said the obligation for workers not to strike ends on Nov. 30, opening the door to potential walkouts starting next month. Volkswagen employs around 300,000 workers in Germany and operates 10 plants in the country. Ahead of Thursday’s wage talks, Volkswagen’s top labor leader said the group was aiming to shut at least three factories in Germany, lay off tens of thousands of staff and cut worker’s wages by 10% as part of plans to reduce costs and boost productivity.

Read more at The WSJ

German Industrial Body Expects 3% Drop In Production This Year

German industry expects a 3% fall in production in 2024, the third year of decline, with no recovery in sight for 2025, the BDI industry body said on Friday. "German industry is under massive pressure," BDI head Tanja Goenner said upon releasing the association's report for the sector. "It is particularly problematic that the leading German industries are struggling with sharp declines this year," she added.

In September, car manufacturing recorded a 6.9% drop in production year on year, while in mechanical and electrical engineering it was down 8.5% and 10.7%, respectively, according to the BDI. It forecast a 0.5% decline in German exports in 2024, as global trade in goods increases by 2%. "There is no improvement in sight for the coming year," Goenner said.

Read more at Reuters

Sweden’s Northvolt Battery Startup Raised $15 Billion. Then It Went Bust.

Northvolt was one of the world’s most valuable battery startups. Now it has run out of charge. Over the past week, the Swedish company filed for bankruptcy in the U.S. and said its co-founder was stepping down as chief executive, after a turbulent year of production problems and job cuts. The move marks a stark change in fortunes for a company that was once vaunted as Europe’s best hope for competing with China’s dominant battery makers. Northvolt’s collapse also underscores the difficulty Western companies face in establishing a foothold in the industry.

Northvolt has struggled with a challenging market for electric vehicles, difficulties scaling up and management missteps, departing chief executive Peter Carlsson said Friday. Filing for chapter 11 bankruptcy allows the loss-making company to access new sources of financing while it restructures. Since June, Northvolt has cut a quarter of its Swedish workforce and suspended an expansion project at Skellefteå. It also scrapped plans for a second factory in Sweden and shut down a subsidiary in California.

Read more at The WSJ

Boeing Secures $2.38 Billion Contract For 15 Additional U.S. Air Force KC-46A Tankers

Boeing said on Thursday it has secured a $2.38 billion contract from the U.S. Air Force to build 15 additional KC-46A Pegasus aerial refueling tankers under the Lot 11 procurement. Boeing now has 168 KC-46A tankers on contract globally. Since 2019, Boeing has delivered 89 KC-46As to the U.S. Air Force and four to the Japan Air Self-Defense Force.

In October, the KC-46A Pegasus was deployed for its first full-scale mission after being approved for global combat operations in 2022. The KC-46A Pegasus is a military aerial refueling and strategic transport aircraft developed by Boeing.

Read more at Reuters

Rockwell Automation working with Microsoft to develop new AI solutions

Rockwell Automation, the world's largest company dedicated to industrial automation and digital transformation, and Microsoft Corp., are p expanding a strategic collaboration aimed at revolutionizing industrial transformation. Together, the companies will provide manufacturing customers with advanced cloud and AI solutions that deliver powerful data insights, streamline operations and enhance scalability – driving operational efficiency and sustainable growth across the industry. This relationship uniquely combines Rockwell’s deep industrial automation expertise with Microsoft’s cutting-edge cloud and AI capabilities. Together, the companies will “bridge the gap between traditional industrial practices and modern digital applications, creating integrated solutions designed to unlock the full potential of industrial data.”

The Rockwell-Microsoft partnership represents a bold step forward in the digital transformation of the manufacturing sector, setting a new standard for connected, AI-driven operations that empower both companies and their customers to thrive in a rapidly changing world. Microsoft recently debuted its latest solution, Azure IoT Operations, which integrates with Rockwell's digital offerings, including FactoryTalk® Optix™. This newly available combined solution will allow manufacturers and production companies to capture critical insights from existing sites without extensive retrofitting. By leveraging this streamlined integration, customers can gain actionable insights to optimize production and drive data-informed decisions across their operations.

Read more at Business Wire

Truck Tonnage Was Up 1.2% in October

Trucking rose modestly in October, the third increase since July, according to the American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index. “The slow, and choppy, climb off of the bottom continued in October,” said ATA Chief Economist Bob Costello, in a statement. “Since hitting a low in January of this year, tonnage is up a total of 3%, plus the index is up sequentially in three of the last four months. No doubt the freight market has improved – albeit slowly – over the course of the year.”

In October, the ATA advanced seasonally adjusted For-Hire Truck Tonnage Index equaled 114.6 compared with 113.3 in September. The index, which is based on 2015 as 100, equaled the reading from the same month last year. The not seasonally adjusted index, which calculates raw changes in tonnage hauled equaled 121.3 in October, 8.6% above September. The seasonally adjusted increase follows a decline in September, which was revised up slightly from October.

Read more at Material Handling & Logistics

Newburgh’s Mount St. Mary College Looks Towards The Future On Its 65th Anniversary

With the institution welcoming a new president and celebrating its 65th anniversary, this year has been an exciting one for Mount Saint Mary College. With 14 years of experience as a college president, Dr. Robert Gervasi became the Mount’s eighth president this past summer. He has already started leading the Mount with focus and efficiency. The college has seen success since Gervasi took the reins: “I’m proud to say that we saw our incoming class grow this year, with strong indications for even more growth next year,” he said.

While getting students to enroll is paramount for any college, “retaining students and preparing them for future success is just as critical,” said Gervasi. “One of the most important things I’ve learned in my time at the Mount so far is that our professors and administrators are all deeply committed to preparing our students to be ethical, effective leaders. We want to ensure that all students experience at least one internship during their Mount career, since job placement after graduation strongly correlates with internship experience,” Gervasi said. “Accordingly, I’m planning to supplement the effectiveness of our Career Center by establishing a Counselors’ Corp of volunteers.”

Read more at Mid-Hudson News

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