Member Briefing October 10, 2023
US Manufacturing Jobs By the Numbers – The BLS Shares Some Stats
National Manufacturing Day, celebrated on the first Friday in October, recognizes the importance of the manufacturing industry in the United States. Over 12.7 million U.S. workers were employed in manufacturing in 2022. Though transportation equipment manufacturing was the largest manufacturing industry in the nation and in 16 states, food manufacturing topped the list in 19 states including New York and the District of Columbia.
Indiana had the highest concentration of manufacturing employment, at 2.04 times the U.S. average. An industry’s employment concentration in an area is measured using location quotients. A location quotient greater than 1 means that the industry’s share of employment in the area is greater than its share of employment in the nation as a whole. Wisconsin (1.95), Iowa (1.71), and Michigan (1.65) also had high manufacturing employment location quotients in 2022. In total, 28 states had manufacturing employment location quotients greater than 1. New Yok has a location quotient of 5.3. There are 419.896 people employed in the sector our of a total workforce of 7,908,130.
War in Israel Headlines
- Israel and Hamas: The Latest News – CNBC
- Israel Vows ‘Mighty Vengeance’: Unprecedented Hamas Attack Leaves At Least 1,100 Dead - Forbes
- Israel Goes on Offensive in Gaza After Hamas Invasion – WSJ
- Nine Americans Confirmed Dead in Hamas Attack - AP
- USS Gerald R. Ford, Escorts Moving Closer to Israel in Response to Hamas Attack - USNI
- Israeli Survivors Recount Terror at Music Festival, Where Hamas Militants Killed at Least 260 - AP
- Clashes Rage in Israel as Hamas Fighters Hold Out 'Longer than Expected' - Reuters
- Iran prisoner swap for $6 billion in spotlight after Hamas attacks Israel - NBC
- How Hamas Duped Israel as it Planned Devastating Attack – Reuters
- NYC Pro-Palestine Rally Splits Democrats Over Israel - Politico
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Russia's Economy Is Increasingly Structured Around Its War in Ukraine - NYT
- Russia Deploying 'All Available' Reserves North of Bakhmut - Yahoo
- Russia Says It Will Step Back From Nuclear-Test Treaty - WSJ
- A Surge in Rail Traffic on North Korea-Russia Border Suggests Arms Supply to Russia – Military.com
- ‘Essence is the Same’: Ukraine’s Zelenskyy Likens Hamas to Russia – Al Jazeera
- How $6 Billion in Ukraine Aid Collapsed in a Government Funding Bill Despite Big Support in Congress - AP
- Change of Plans: US Army Embraces Lessons Learned from War in Ukraine – Defense News
- Kremlin Media May Use Israel to Undermine West's Ukraine Aid: ISW - Insider
- 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
Oil Prices Jump on Fighting in Israel and Gaza
Oil prices have jumped on concerns that the situation in Israel and Gaza could disrupt output from the Middle East. Brent crude, the international benchmark, climbed by $2.25 a barrel to $86.83, while US prices also rose. Israel and Palestinian territories are not oil producers but the Middle Eastern region accounts for almost a third of global supply. A spokesperson for Hamas, the Palestinian militant group, told the BBC that the group had direct backing for the move from Iran - one of the world's largest oil producers.
On Monday, Israel ordered US oil giant Chevron to pause production at the Tamar natural gas field off the country's northern coast. The country's energy ministry, which has closed the field during previous periods of unrest, said there was enough fuel from other sources to meet Israel's energy needs. Israel's largest offshore gas field, Leviathan, continues to operate as normal, Chevron said. Energy analyst Saul Kavonic told the BBC that global oil prices have risen "due to the prospect of a wider conflagration that could spread to nearby major oil-producing nations such as Iran and Saudi Arabia".
Israel-Hamas Conflict Jolts Defense Stocks
Middle East conflict is pushing shares of defense contractors higher. Investors have to think quickly about potential winners and losers, and if the Israel-Hamas war will escalate. Shares of defense contractors surged Monday including Lockheed Martin, Northrop Grumman, General Dynamics, L3Harris Technologies, RTX, and Huntington Ingalls Industries. All were up between 1 and 5% in early trading.
Defense shares haven’t been strong performers recently. Of the large-cap stocks, only Boeing shares are up over the past 12 months. Boeing, of course, is more of a commercial-aerospace company in the minds of investors. The average move for the rest is down about 14% over the past year, while the S&P 500 is up about 19%.The drops have left defense stocks, excluding Boeing’s, trading for about 14.5 times estimated 2024 earnings, down from about 17 times, a historical average in recent years. Boeing earnings are still depressed following Covid and 737 MAX issues, and the stock trades for about 38 times estimated 2024 earnings.
COVID Update - People Who’ve Had Covid at Least 5 Times Describe How the Illness Changed With Each Reinfection
Nearly four years after Covid’s emergence, plenty of people have tested positive at least twice. But an unlucky group has been hit with reinfection after reinfection. “I’ve seen a few patients with five infections,” said Dr. Grace McComsey, vice dean for clinical and translational research at Case Western University. “Sadly, they were immunized and they still got Covid five times.” three people said their later infections were all less severe than the first — though there wasn’t necessarily a clear pattern of milder symptoms with each new illness. Even so, having Covid was still mentally and emotionally exhausting each time, they said, since it disrupted their work and time with loved ones.
Doctors who study Covid say it’s not surprising that some people have gotten Covid more than once a year, given how widely the virus has spread and how frequently cases surge.“The virus continued to mutate, so it has a way of escaping immunity,” said Dr. Miriam Merad, chair of the Department of Immunology and Immunotherapy at Mount Sinai School of Medicine in New York.
Pressure to Fill House Speaker Vacancy Builds as Crisis Unfolds in Israel
Candidate for House speaker Jim Jordan says there needs to be unity around one candidate before Republicans go to the floor and brushed off the idea that former Speaker Kevin McCarthy could jump back in. Jordan’s comments come after McCarthy wouldn’t rule out the possibility of being a candidate for the gavel, telling CNN at a news conference earlier today: “That's a decision by the conference. I'll allow the conference to make whatever decision. Whether I'm speaker or not, I'm a member of this body.”
Jordan, chairman of the House Judiciary Committee, insisted there must be unity before any floor votes. “I think we shouldn't go to the floor until we know that we have the votes. Until we know what our plan is going forward,” the Ohio Republican told Raju. He said if elected speaker he would first put forward a resolution to show support for Israel. “First thing I would put on the floor is the resolution on Israel. Second thing would be legislation to get to the goals and objectives that are in the resolution on Israel so we can help our best ally, the state of Israel, then we got to know how we're going to deal with November 17," referring to the date when government funding runs out.
4,000 More UAW Workers on Strike After Rejecting Deal with Mack Trucks
The United Auto Workers union says nearly 4,000 members are on strike at heavy truck manufacturer Mack Trucks after voting down a tentative agreement reached a week ago. The union said 73% of its workers had voted against the proposed deal. “I’m inspired to see UAW members at Mack holding out for a better deal, and ready to stand up and walk off the job to win it,” UAW President Shawn Fain said in a statement issued Sunday. The union said the rejected contract included an immediate 10% pay raise, and 9 percentage points of additional pay increases over the five-year life of the contract, a $3,500 signing bonus, improved vacation and holidays and no increase in insurance premiums paid by members.
Stephen Roy, president of Mack Trucks, said in a statement that he was “surprised and disappointed” that the union had chosen to strike. “The UAW called our tentative agreement ‘a record contract for the heavy truck industry,’” he said in the statement. He said the company assembles all of its trucks and engines for the North American market at US plants and that it “continues to compete against products built in lower-cost countries.”
‘Strikes Can Often Be Contagious:’ Why So Many Workers Are Striking in 2023
Altogether, there have been 312 strikes involving roughly 453,000 workers so far in 2023, compared with 180 strikes involving 43,700 workers over the same period two years ago, according to data by Johnnie Kallas, a PhD candidate at Cornell University’s School of Industrial and Labor Relations, and the project director of the ILR Labor Action Tracker. “This is a pretty considerable uptick relative to the rest of the 21st century,” Kallas said.
In the last few months alone, striking or threatening to strike has led to a string of labor deals where UPS drivers, airline pilots and aerospace manufacturing employees have pushed for and won higher pay. With each successful outcome, other labor actions are more likely to follow, Kallas said. “Strikes can often be contagious.” “Pay is a big issue but it’s not the only issue,” Kallas said. Other top concerns include staffing, retirement benefits, health care and health and safety, research shows. “For many of these workers, especially in unionized settings, it’s the first contract they’ve negotiated since the beginning of the pandemic,” Kallas said.
Homebuyers are Dealing with a Double Whammy: Higher Prices and Higher Interest Rates
The Consumer Financial Protection Bureau recently released data that shows just how much more expensive it has become to buy a home, thanks to rising prices and mortgage rates. The average monthly payment on a new mortgage rose 46% in one year, from $1,400 at the end of 2021 to $2,045 by the end of 2022. And throughout 2023, home prices and mortgage rates have only continued to climb.
“With home prices and interest rates so high, people are increasingly having trouble qualifying for a mortgage,” said Young Jo, an economist at the CFPB. “We noticed a huge jump in the share of applications that were being denied due to too high of a DTI, average debt-to-income ratio,” Jo said. Most lenders won’t give someone a mortgage if the monthly payment would be more than about 30% or 40% of their income. Seiler said it shouldn’t be like this forever. “Our current forecast has rates coming down to the 5.5% range at the end of 2024.”
UPS and FedEx Loosen Pricing as Carriers Anticipate a Weak Peak Season
Parcel carriers are giving customers a break on prices ahead of what is set to be a weak holiday shipping season, the latest sign of a slowdown in demand for goods that is hitting every link in the global supply chain. United Parcel Service and FedEx, which in recent years have raised prices in lockstep as volume swelled, have been offering discounts and other forms of cost relief to their customers. The U.S. Postal Service said last month that it wouldn’t impose a holiday surcharge this year.
“It’s not going to be a good peak. People are spending money on things that we don’t transport,” said Satish Jindel, president of ShipMatrix, which analyzes parcel-shipping data. ShipMatrix estimates that carriers will deliver 82 million parcels a day during the peak holiday season that starts around Thanksgiving and ends in mid-January. Last year the industry delivered an average of 90 million parcels a day during that period.
Yellow’s Real Estate Value Keeps Rising as LTL Carriers Seek Advantage
The dispersal of Yellow’s sprawling real estate is turning into a battle for a competitive edge in the trucking sector. The top offer for Yellow’s terminals already exceeds the assessed value of the sites by some $400 million, with Estes Express Lines emerging as the stalking-horse bidder. That sets the minimum price for the sites in an upcoming auction in bankruptcy court, a sign of the high value that terminal capacity plays in a highly fragmented less-than-truckload sector.
Terminal space has become harder to find and even harder to build in recent years as a push by carriers to get facilities closer to population centers has run into growing community opposition to industrial operations. The difficulty in adding doors, or handling capacity, has become a barrier to expansion for truckers. That makes the Yellow auction a once-in-a-generation opportunity to bulk up. Yellow has a terminal in Maybrook, Orange County.
Bristol-Myers Squibb to Acquire Mirati in Deal Worth Up to $5.8B
Bristol-Myers Squibb on Sunday said it will acquire cancer drugmaker Mirati Therapeutics for up to $5.8 billion, diversifying its oncology business and adding drugs it hopes can help offset expected lost revenue from patent expirations later this decade. Bristol will pick up Mirati’s portfolio of drugs that target the genetic drivers of specific cancers, including its lung cancer drug Krazati, which was approved in December. A second compound - MRTX1719 - which could be used in some types of lung cancer was also attractive to the company, Bristol executives said in an interview.
The company said that it will buy Mirati for $58 per share in cash, or around $4.8 billion. Mirati stockholders will also receive one non-tradeable contingent value right for each Mirati share held, potentially worth $12.00 per share in cash, representing an additional $1 billion of value opportunity, the company said. Bristol will finance the transaction with a combination of cash and debt, the company said in a statement.
Maternity Wards Continue to Close Across New York
Faced with staff shortages and declining birth rates, more than two dozen maternity wards in New York have closed in the last 15 years, forcing expectant mothers to travel farther for care. Since the start of the pandemic alone, at least seven maternity wards statewide have closed or announced plans to shut their doors, and the sector has been shrinking at a rate of about two facilities per year since 2008, according to a Times Union analysis of hospital birth data and closure requests filed with the state Department of Health.
Other facilities recently on the chopping block were located in Niagara, Wyoming, St. Lawrence and Franklin counties, dealing a blow to rural communities where access to medical specialists has always been limited. A majority of the closed or closing maternity wards were located in upstate New York, often in rural parts of the state where mothers already have limited access to reproductive care.
Read more at The Albany Times Union
How China’s BYD Became Tesla’s Biggest Threat
A few years ago, the founder of Chinese automaker BYD was worried it might not survive. Now, the company is nipping at the heels of Tesla as the world’s No. 1 seller of electric vehicles. BYD, short for Build Your Dreams, sold 431,603 fully electric cars in the third quarter, just shy of Tesla’s 435,059. It’s on track to sell around 1.8 million EVs by year-end. That would tie it with Tesla, which has set the same EV sales target for this year, up from 1.31 million it sold in 2022. The company, which also sells hybrid gasoline-electric cars, plans to sell 3.6 million total vehicles this year, likely putting it in the global top 10 automakers by unit sales. It has surpassed Volkswagen as the bestselling car brand in China, and is growing into an export powerhouse.
BYD’s rise echoes the story of many Chinese companies, and Korean and Japanese ones before them. BYD started by copying Toyota products, then grew so proficient at cutting costs that Toyota’s then-Chief Executive Akio Toyoda visited to learn its secrets. Chinese officials poured in subsidies and bought BYD vehicles for government fleets, while stimulating the broader EV market with help for buyers.
Nobel Economics Prize Awarded to U.S. Economist Claudia Goldin for Work on Women in the Labor Market
The Nobel economics prize was on Monday awarded to Professor Claudia Goldin of Harvard University for her research on women in the labor market. Goldin provided the first comprehensive account of women’s earnings and labor market outcomes through the centuries, the Nobel committee said in the prize announcement while announcing the prize. Her research reveals new patterns, identifies causes of change but also speaks to the main sources of the remaining gender gaps.
She had "advanced our understanding of women's labour market outcomes", the Swedish Academy of Sciences said, pointing to her work examining 200 years of data on the US workforce, showing how and why gender differences in earnings and employment rates changed over time. "This year's Laureate in the Economic Sciences, Claudia Goldin, provided the first comprehensive account of women's earnings and labour market participation through the centuries," the prize-giving body said in a statement. "Her research reveals the causes of change, as well as the main sources of the remaining gender gap."