Member Briefing October 13, 2022
8.5 - Wholesale Prices Rise More Than Expected as Inflation Persists
The US Producer Price Index, which tracks what America’s producers get paid for their goods and services, rose at an annual pace of 8.5% in September, down slightly from the 8.7% rise in August, the Labor Department reported Wednesday. But the report showed prices rose 0.4% month-over-month.
Energy prices ticked up 0.7% in September, compared to August, after two month-over-month declines in July and August, and food prices posted a 1.2% one-month increase after a slight decline in August. Core PPI, which excludes food and energy from overall producer prices, registered a 0.3% month-over-month increase and a 7.2% rise over the course of the last 12 months. That was roughly in line with what economists had been forecasting.
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Putin’s Nuclear Threat: Now the West Takes it Seriously – CS Monitor
- NATO Sets Sights on Rebuilding Ukraine’s Defense Industry - Politico
- U.S. Expediting Shipment of NASAMS Air Defenses to Ukraine -White House - Reuters
- How the West is Helping Ukraine Beat Russia’s Missiles – The Economist
- Putin Offers to Open Nord Stream Gas Tap ‘if EU Wants’ – The Independent
- Ukraine Shoots Down 4 Russian Helicopters in Just 18 Minutes – NY Post
- NATO to Hold Nuclear Exercise Despite Russian Warnings - AP
- Russia arrests 8 for the Blast on a Crimea Bridge as Ukraine Denies Involvement - NPR
- Latest Strikes Show Putin Will Stick With Russia’s Hawks on Ukraine War – The Hill
- Ukraine to Press Allies for More Military Aid at Brussels Meeting - Reuters
- Russia’s Elites Are Starting to Admit the Possibility of Defeat – Carnegie Endowment for Peace
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Fed Minutes Show Concerns of More Persistent High Inflation
Federal Reserve officials expressed concern at their meeting last month over the persistence of high inflation and expected that bringing prices and wages down would likely require the labor market to weaken. Many officials revised higher their expectations for anticipated rate rises, though some signaled greater caution about overdoing increases due to elevated risks of economic and financial volatility, according to minutes of the Sept. 20-21 gathering released Wednesday.
The minutes said officials believed raising rates to more restrictive levels would ensure higher inflation doesn’t become embedded in the economy. They agreed that raising rates more aggressively now would “prevent the far greater economic pain associated with entrenched high inflation, including the even tighter policy and more severe restraint on economic activity that would then be needed to restore price stability,” the minutes said.
Senate Pushes $847 Billion Defense Bill to Meet China, Russia Challenges
The Senate moved forward on the annual defense policy bill that sets spending levels and provides pay raises for the country’s military, with lawmakers setting goals of bolstering U.S. weapons inventory and improving relationships with countries positioned to help counter threats from China and Russia. Senate Armed Services Committee Chairman Sen. Jack Reed (D., R.I.) put a draft of the National Defense Authorization Act on the floor Tuesday morning.
The legislation authorizes $847 billion for military and national security programs at the Department of Defense and the Energy Department, $45 billion more than President Biden requested in the spring and up from the $778 billion passed by lawmakers last year. The money would give raises to U.S. military service members and Defense Department workers and pay for new aircraft, ships and vehicles for combat, while funding newer technologies such as microelectronics and hypersonic weapons.
US COVID - U.S. Authorizes Updated COVID Booster Shots for Children as Young as 5
U.S. health regulators authorized the use of Omicron-tailored COVID-19 booster shots from Moderna Inc and Pfizer Inc in children as young as 5, a move that will expand the government's fall vaccination campaign. The U.S. Food and Drug Administration on Wednesday green-lighted Moderna's bivalent vaccine for those aged six and above, while Pfizer's updated shot was authorized in children aged five and above.
"Since children have gone back to school in person and people are resuming pre-pandemic behaviors and activities, there is the potential for increased risk of exposure to the virus," said Peter Marks, head of FDA's Center for Biologics Evaluation and Research.
Senate Control Could Hinge Once Again on Georgia Runoff
Even after Republican nominee Herschel Walker ran up against allegations that he paid for his then-girlfriend to have an abortion more than a decade ago — which he has denied — polling still shows a tight race between him and Sen. Raphael Warnock (D). Neither candidate is breaking 50 percent support, leaving both parties to confront the possibility that the fight for the Senate could head into overtime.
Such a scenario could leave the Senate majority hanging in the balance for weeks after Election Day much like it did after the 2020 elections,
From Gas Prices To The Threat Of Nuclear Conflict … What Is Shaping The Midterms?
It’s October, and the surprises are rolling in. OPEC+ announced its cutting oil production by two million barrels a day, President Biden is talking about the threat of nuclear “Armageddon” and shoes keep dropping in the Georgia Senate race. To round up everything that’s going on, the FiveThirtyEight Politics podcast crew tries to rank the electoral significance of some of the biggest stories in the news right now.
They also ask whether a longstanding metric from Gallup — which shows strengths for Republicans — is a good use of polling.
Study Raises Alarm About Impacts of Long COVID
A new long-covid study based on the experiences of nearly 100,000 participants provides powerful evidence that many people do not fully recover months after being infected with the coronavirus.
The Scottish study found that between six and 18 months after infection, 1 in 20 people had not recovered and 42 percent reported partial recovery. There were some reassuring aspects to the results: People with asymptomatic infections are unlikely to suffer long-term effects, and vaccination appears to offer some protection from long covid.
Rail Union Rejects Biden-Brokered Labor Deal, Raising Prospect of a Strike
A union representing nearly 12,000 railroad workers on Monday voted down the tentative contract agreement between freight railroad companies and all 12 of their unions brokered by the White House last month.
Four other unions have ratified the agreement, and over the next month or so, seven more are set to vote. The agreement gives employees a substantial pay raise — after nearly three years of no increases — but doesn't adequately address many workers' concerns over workplace conditions, insiders told Axios. The two largest unions that represent conductors and engineers — making up about half the total rail workforce — aren't set to conclude voting until November 17.
NYC’s Office Occupancy Rates Surge to Post-Pandemic High
The Big Apple’s halting return to the office following the coronavirus shutdown is gaining steam – with occupancy rates jumping by nearly 12 percentage points in just the last month, new statistics show.
The occupancy rate surged to 46.1% for the week ending Sept. 21, up from 34.5% over the last week of August, according to figures from City Comptroller Brad Lander’s monthly report on the status of the city’s economy. New York’s occupancy rate now exceeds Philadelphia, Boston, Chicago, San Francisco, and Los Angeles — but continues to trail Houston, Dallas, and Austin.
Why a Big Social Security COLA Hike is Coming
The Social Security Administration is about to announce its largest annual cost-of-living adjustment (COLA) increase in 40 years. The hike, set to be announced on Thursday, is estimated at around 8.7 percent and will help those in the program meet rising costs driven by inflation.
Between 2010 and 2020, average annual COLAs increased by just 1.7 percent each year, while COLAs have only risen above 8.7 percent three times — between 1979 and 1981 at 9.9 percent, 14.3 percent and 11.2 percent, respectively. The COLAs are based on the country’s current inflation rates. In 1980, inflation was above 14 percent yet declined to 3.5 percent in the latter half of the decade; the COLA followed suit, declining to 5.4 percent in 1990. Around 70 million Americans receive Social Security benefits. It is estimated that the COLA hike will increase the average monthly retiree check by around $144.
Intel Plans to Cut Thousands of Jobs Hit by PC Slowdown
Chipmaker Intel Corp (INTC.O) is planning a major reduction in headcount, likely numbering in the thousands, in the face of a slowdown in the personal computer market, Bloomberg News reported on Tuesday, citing people with knowledge of the situation. The layoffs will be announced as early as this month and some of Intel's divisions, including the sales and marketing group, could see cuts affecting about 20% of staff.
The company in July slashed its annual sales and profit forecasts after missing estimates for second-quarter results. Decades-high inflation and the reopening of offices and schools have led people to spend less on PCs than they did during pandemic-related lockdowns. Chipmakers are also under pressure from COVID-19 curbs in key PC market China and the Ukraine conflict that have led to supply-chain snarls and also weighed on demand.
Machine Tool Orders Reverse Downward Trend
U.S. machine shops and other manufacturers halted a four-month slide in new orders during August, booking a total of $460.7 million worth of CNC machinery, 16.3% more than the July total. The new total is -14.5% less than the August 2021 figure, however, and brings the year-to-date total for machine tool new orders to $3.69 billion, 5.3% higher than last year’s January-August order value.
Machine tool orders ended 2021 with strong totals but started 2022 with less impressive results. The current year’s monthly orders peaked in March at $551.8 million, and then fell in each successive month until August.
Join Global NY's Trade Mission to Israel
Global NY is recruiting up to 10 NYS companies to participate in a December trade mission to Israel. Join us to gain access to this key global market. Israel, a major international hub of innovation and technology is a natural market for US goods and is New York’s 5th largest export market. Trade between the US and Israel has increased eight-fold since the signing of the Free Trade Agreement in 1985 and has led to the elimination of virtually all trade tariffs. GDP growth in 2022 was 4.8% and unemployment was 3.5%.
The trade mission fee is $1,200. The fee includes meeting with prospective customers and/or business partners, networking events, all group ground transportation and airport transfers in Israel. Through use of the STEP Grant, 70% of eligible expenses will be reimbursed.
Tesla Semi Deliveries Coming this Year, But Details are Fuzzy
Tesla says it is going to start delivering Semi trucks Dec. 1, a full five years after Elon Musk started taking orders for them. The first ones are going to PepsiCo, which will put them to work at a Frito-Lay facility in Modesto, California, and a beverages plant in Sacramento.
There isn't a whole lot more information on Tesla's website, aside from a zero-to-60 acceleration time, which doesn't rank particularly high on truckers' priority list. Braking distance, for example, is far more important than beating another big rig off the line, as one ex-trucker pointed out after Musk's prototype presentation years ago. (It takes 20 seconds to get up to 60 miles per hour, by the way).
'Watershed Moment for Humanity' as NASA DART Spacecraft Crash Deflects Asteroid
NASA Administrator Bill Nelson confirmed Tuesday that the space agency succeeded in its mission to change the orbit of small asteroid Dimorphos. The Double Asteroid Redirection Test spacecraft, aka DART, was crashed into Dimorphos a few weeks ago to test one possible method of protecting Earth from a dangerous body on a collision course with our planet.
DART's impact with Dimorphos on Sept. 26 appears to have reduced the time it takes the moonlet to orbit Didymos by 32 minutes, from 11 hours and 55 minutes to 11 hours and 23 minutes, with a margin of uncertainty of about two minutes. NASA had hoped DART would alter the orbital period by at least 73 seconds but expected it could alter the orbit by at least a few minutes and perhaps tens of minutes. So the result is on the high side of the expected possibilities.