Member Briefing October 14, 2024
Manufacturing Jobs Have Recovered, But Not Everywhere
Manufacturing employment in the United States has surpassed its pre-pandemic levels, the first time since the 1970s that the sector has regained all the jobs it lost in a recession. Yet its recovery lags behind job growth in other sectors of the economy and masks large regional disparities. In nearly half of the country’s states — and fully half of all counties — manufacturing employment has not yet rebounded to 2019 levels. The manufacturing recovery has not reached, for example, the so-called “Rust Belt” states of Pennsylvania, Ohio, Indiana, Illinois, Michigan, and Wisconsin.
Most individual manufacturing industries have recovered from their pandemic job losses, but only jobs in two of them — computer & electronics manufacturing and chemical manufacturing — are growing faster than before the pandemic. Despite the recent uptick, however, there remain 39 percent fewer jobs in computer & electronics manufacturing than in the year 2000. The transportation and food manufacturing industries have accounted for the lion’s share of job growth in the manufacturing sector post-pandemic; these were also the two leading industries for job growth within manufacturing after the Great Recession.
Read more at The Economic Innovation Group
Inflation Numbers for September: CPI = 2.4, PPI = 1.8. Both Slightly Higher than Predicted
The consumer price index, a broad gauge measuring the costs of goods and services across the U.S. economy, increased a seasonally adjusted 0.2% for the month, putting the annual inflation rate at 2.4%. Both readings were 0.1 percentage point above the Dow Jones consensus. The annual inflation rate was 0.1 percentage point lower than August and is the lowest since February 2021. Excluding food and energy, core prices increased 0.3% on the month, putting the annual rate at 3.3%. Both core readings also were 0.1 percentage point above forecast.
The producer price index, which measures what producers get for their goods and services, was flat for the month and up 1.8% from a year ago. Economists surveyed by Dow Jones had been looking for a monthly gain of 0.1% after August’s increase of 0.2%. Excluding food and energy, the PPI rose 0.2%, meeting expectations, and was up 2.8% from a year ago. Together, the releases indicate that inflation is off its blistering pace that peaked more than two years ago but still mostly holds above the Federal Reserve’s 2% target
Consumer Sentiment Slips In October On Frustration Over High Prices
Americans’ outlook on the economy soured a bit this month after two months of small gains, according to the University of Michigan’s consumer sentiment index, released Friday. The index slipped to 68.9 in October from 70.1 in September, which had been its highest reading since May. Economists noted that the decline occurred after the Federal Reserve cut its benchmark interest rate in September, while gas prices have steadily fallen and overall inflation has cooled, trends that should boost sentiment.
The survey bottomed out in June 2022, when inflation peaked at 9.1%, and has since risen by about 40%, though it remains significantly below pre-pandemic levels. In October, Republicans reported a much clearer drop in sentiment than Democrats
Global Headlines
Middle East
- Israel And Hamas: The Latest News – The Guardian
- Hezbollah Tunnel Entrances Abut U.N. Peacekeeping Position, Israel Alleges - WSJ
- US Will Send A Missile Defense System And Troops To Run It To Israel To Aid Defense Against Iran - AP
- UN Says Israeli Tanks Burst Through Gates Of Peacekeeper Base - Reuters
- Iran’s Secret Warning to U.S. Allies: Don’t Help Israel, or You’re Next - WSJ
- The Israel-Iran Standoff In Maps – The Economist
- Israel’s Paradox of Defeat – Foreign Affairs
- How Oct. 7 Upended America’s Global Military Strategy - WSJ
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Ukraine And Russia: The Latest News – The Guardian
- Russia says it captures another village near Pokrovsk in eastern Ukraine - Reuters
- Ukraine Neighbor's Support for Refugees Hits New Low - Newsweek
- US And Europe To Clarify NATO’s Future Relationship With Russia - Politico
- Zelensky Says He Hopes War With Russia Will End 'No Later Than Next Year' – France 24
- The UN Peacekeeping Mission Caught In The Middle Of Fighting In Southern Lebanon – France 24
- Putin Wants 'New World Order', Invites Iranian President to Moscow - Newsweek
- 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
Other Headlines
- Remains Of Andrew 'Sandy' Irvine Believed To Have Been Found On Everest – National Geographic
- China Threatens Taiwan With More Trade Measures After Denouncing President's Speech - Reuters
- Japanese atomic bomb survivors' group wins 2024 Nobel Peace Prize – Nikkei Asia
- Jamie Dimon Says Geopolitical Risks Are Surging: ‘Conditions Are Treacherous And Getting Worse’ - CNBC
- Columbus Holiday In Latin America Revives Centuries-Old Historical Debate - Reuters
- France Arrests Afghan Linked To Suspect In US Election Attack Plot – France 24
- Migration Through Darien Gap Increased In September, Led By Venezuelans After The Election - AP
- NATO Allies Massively Beefing Up Bloc's Eastern Flank - Newsweek
- 100 Days Of Starmer: How Labour’s Big Win Went Off The Rails – Poltico
Policy and Politics
America’s New Millionaire Class: Plumbers and HVAC Entrepreneurs
Few businesses are as vital to their customers as local plumbing, heating or air-conditioning companies—especially in places like Tucson, Ariz., where Rice works and residents sweltered in 100-degree heat most days this summer. For years, Aaron Rice, 43 years old, was skeptical when out-of-state investors offered to buy his company. He assumed most of them knew little about skilled-trade work or his customers. They were just looking to make a buck. But in 2022, when approached by a local HVAC company backed by private equity, he changed his mind, figuring that they knew the business.
Private equity, however, is no foreign player in the skilled trades these days. PE firms across the country have been scooping up home services like HVAC—that is, heating, ventilation and air conditioning—as well as plumbing and electrical companies. They hope to profit by running larger, more profitable operations. Their growth marks a major shift, taking home-services firms away from family operators by offering mom-and-pop shops seven-figure and eight-figure paydays. It is a contrast from previous generations, when more owners handed companies down to their children or employees.
Manufacturers And Feds Work To Stabilize Supply Of IV Fluids For Hospitals
Flooding from Hurricane Helene in late September shut down one of the largest suppliers of IV fluids in the U.S, a factory in Marion, N.C., about 35 miles outside of Asheville. Owned by Baxter International, the plant made products like saline, sterile water for injection and other fluids that are crucial to the health care system. Now, the company and government officials are trying to make sure existing shortages aren’t worsened by the natural disasters. Last Wednesday, the Food and Drug Administration announced it has authorized 19 IV products for temporary importation from Canada, China, Ireland and the U.K.
Baxter is limiting how much of its IV fluids customers like hospitals can buy to prevent hoarding and to try to ensure equitable access to the supply that is available. It’s also trying to increase manufacturing at its other facilities to bridge the gap. Baxter hopes to reopen the North Carolina facility in phases and get back to allowing customers to order close to normal amounts of certain products by the end of the year. Meanwhile, a second facility making the crucial medical products had to close its doors this week because of Hurricane Milton. The B. Braun factory making IV fluids in Daytona Beach, Florida was not seriously impacted in the storm, company spokesperson Allison Longenhagen told NPR in an email. It will reopened Friday.
Retirees To Get A 2.5% Social Security COLA Raise In 2025
Starting Jan. 1, 2025, the average Social Security retirement benefits payment will increase by about $48, to $1,966. That compares with a 3.2% increase for 2024 and an increase of 8.7% for 2023, which was the biggest hike in 40 years. SSA officials base the COLAs on inflation data from the Bureau of Labor Statistics. The 2025 COLA is the smallest since 2021 because inflation has been at the lowest level since 2020.
The new Social Security COLA might be more generous for retirees in some areas than in others. The Social Security Administration follows a calculation method set forth in federal statutes and bases the COLA on the third-quarter average for one key Bureau of Labor Statistics inflation measure, the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. CPI-W rose just 2.2% during the 12-month period that ended Sept. 30. But a breakdown by region shows that increases in another, similar inflation measure, Consumer Price Index for All Urban Consumers, or CPI-U, ranged from 1.2%, in the Tampa, Florida, area, up to 4.1%, in the Chicago area. That means the new Social Security COLA could seem like a raise in Tampa and a pay cut in Chicago.
Health and Wellness
Yes, You Can Get The COVID, Flu, And RSV Vaccines At Once. Here Are The Pros And Cons
Getting multiple vaccines at once is not only safe, according to the CDC, but also just as effective as getting them individually. Now that you’re an adult entering yet another respiratory virus season, there’s no reason you can’t get your COVID and flu—and respiratory syncytial virus (RSV), if you’re 60 or older—shots in one go. That said, you’re not alone if you have reservations about vaccine co-administration. Most U.S. adults 18 and older (61%) wouldn’t or are unsure if they’d get their COVID and flu vaccines together, according to a survey conducted in August by the National Foundation for Infectious Diseases (NFID).
While getting these and other vaccines together or separately is strictly a matter of personal preference, there are advantages to grouping them, says Dr. Donald Dumford, an infectious disease specialist at Cleveland Clinic Akron General. For starters, you could save yourself multiple trips to your doctor or pharmacy, which may be especially convenient if you lack reliable transportation or have to take time off work for your immunizations.
NYS COVID Update
The Governor updated COVID data for the week ending October 11th.
Deaths:
- Weekly: 38
- Total Reported to CDC: 84,229
Hospitalizations:
- Average Daily Patients in Hospital statewide: 760
- Patients in ICU Beds: 72
7 Day Average Cases per 100K population
- 4.2 positive cases per 100,00 population, Statewide
- 4.8 positive cases per 100,00 population, Mid-Hudson
Useful Websites:
Election 2024
- Battle for Swing States Is Tied, Trump Has Edge on Top Issues, WSJ Poll Shows - WSJ
- These Rural Voters Picked Tim Walz Six Times. And They’re Done. - Politico
- Kamala Harris' Easiest Path to 270 Appears to Have Got Harder - Newsweek
- Trump’s Chances Edge Up In Presidential Race – The Hill
- Donald Trump Erases Kamala Harris' Lead In New National Poll - Newsweek
- ‘They’ve Given Up On The Idea That They Can Get Women.’ How Trump Is Turning To The Other Gender Gap For Victory. - Politico
- How Pollsters Are Trying To Get It Right In The Trump-Harris Race - The Hill
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Real Clear Politics Electoral Map
- Latest Polls - FiveThirtyEight
Industry News
Bank Earnings: JPMorgan, Wells Fargo, BlackRock, BNY Score Strong Earnings Beats
Big banks and financial firms kick off third-quarter earnings Friday morning. JPMorgan Chase, Wells Fargo both topped earnings views. BlackRock and Bank of New York Mellon are set to report. Bank of America (BAC), Citigroup (C) and Goldman Sachs (GS) follow on Tuesday, with Morgan Stanley (MS) reporting Thursday.
JPMorgan Chase reported earnings of $4.37 per share on $42.7 billion in revenue. to $41.43 billion. The Dow Jones bank saw assets under management increase by 23% to $3.9 trillion. Net interest income rose 3% to $23.5 billion. Average deposits were down 8% from last year, while average loans rose 1% from 2023. JPMorgan increased its provision for credit losses to $3.1 billion, from $1.38 billion for the same quarter last year.
Wells Fargo earnings per share fell to $1.42 per share, beating expectations for a 13.5% decline to $1.28. Revenue slid about 2% to $20.37 billion, just below forecasts for $20.4 billion.Net interest income fell 11% from last year to $11.7 billion. Average loans were down 3% while average deposits were stable at $1.3 trillion. Wells Fargo lowered its credit loss provisions to $1.07 billion from $1.2 billion last year. The bank guided a 9% decline for 2024 net interest income from its 2023 level of $52.4 billion.
BlackRock reported earnings of $11.46 per share adjusted, up 5% from last year, which beat forecasts for a decline to $10.36 per share. Revenue increased 15% to $5.2 billion, also beating expectations for $5 billion. Assets under management rose 26% to $11.5 trillion. BlackRock saw record quarterly net inflows of $221 billion, representing 8% organic asset growth.
Bank of New York Mellon announced adjusted earnings of $1.52 per share, which cleared expectations for a 15.6% increase to $1.41 per share. Total revenue rose 5% to $4.6 billion, edging out forecasts for $4.54 billion. Net interest income rose 3% to $1.05 billion. Assets under management increased 18% from last year to f$2.1 trillion. BNY allotted $23 million in provisions for credit losses during the quarter, after not announcing any in Q3 2023.
Read more at Investor’s Business Daily
Hurricane Helene Underscores The Value Of Facility Continuity Plans
Hurricane Helene made landfall as a Category 4 hurricane on Sept. 26, unleashing widespread destruction in six U.S. states. Homes were destroyed, roads torn apart and power lines severed, plunging entire regions into darkness. The storm claimed 227 lives, as of Saturday, according to AP News. Erin Haglund, managing director of financial services at JLL, pointed to varying degrees of flood damage, water penetration, mold remediation, wind damage and even catastrophic failure to some buildings in regions such as Atlanta and Florida.
Many of JLL’s clients are running into issues related to labor and acquiring the resources needed to assess the damage, according to Haglund. In many cases where it’s catastrophic. During this time, it’s important to have business continuity and disaster response protocols in place, ranging from proactively monitoring weather systems to staging and triaging, Haglund noted. “What do we do? What’s the action plan? That can be everything from remediating an existing partial building all the way to catastrophic damage. How do we pivot and move towards a more capital conversation around rebuilding and then, how do we manage the business continuity of that company while they don’t have a physical structure in place?” she said.
Learn more at Council Member Belfor Property Restoration
Read more at Manufacturing Dive
Volkswagen Car Deliveries Fall as Industry Challenges Mount
Volkswagen delivered fewer cars in the third quarter as the automaker navigates an increasingly challenging market hit by a price war in China and high domestic production costs.. Volkswagen’s car deliveries overall fell 7.1% on year to 2.2 million in the quarter, while deliveries in China fell 15%. The company blamed the high price discounts offered by competitors in the region, the majority of which are even launching new models at aggressive price points to gain market share. The German car maker has avoided engaging in these tactics, preferring to stick to its pricing model to ensure it brings in the profit needed for technology investments.
European manufacturers including Volkswagen, BMW, Mercedes-Benz, Stellantis and Aston Martin have all cut full-year profitability guidance in recent weeks, with most of them citing weak demand in China for their dampened expectations. Volkswagen, which in addition to its namesake brand owns Skoda, Audi, Bentley and Lamborghini among others, expects to deliver about 9 million vehicles to customers this year. That is below the 9.24 million vehicles delivered in 2023. In the nine months to the end of September this year it had delivered 6.5 million.
Stellantis Announces Management Changes, Says CEO Will Retire in 2026
The struggling auto giant Stellantis said late Thursday that its CEO Carlos Tavares will retire in 2026 when his contract runs out and it is now looking for a successor. The U.S.-French-Italian company, whose brands include Chrysler, Citroen, Fiat and Jeep, is going through a rough patch, in particular with sales in North America, its cash cow. Late last month, Stellantis cut its profit forecast, citing efforts to improve its sagging U.S. business as well as competition from Chinese automakers.
In a statement issued late Thursday, the group said: "To drive simplification and enhance organisational performance in a turbulent global environment, Stellantis today announced targeted management changes, effective immediately." Stellantis said it wants to "redouble the company's focus on its key business priorities and confront head-on the global challenges facing the industry."
Musk Shows Off Driverless Robotaxi to Be Priced Under $30,000
Tesla Chief Executive Elon Musk has for years teased plans for a fully autonomous robotaxi that can shuttle paying customers around town. Last Thursday night, he finally showed the world what he had in mind, unveiling two new vehicles: an almond-shaped Cybercab with no steering wheel or pedals, and a Robovan, which can transport up to 20 people at a time or move cargo. Musk said the Cybercab, a two-seater car designed to operate as a robotaxi, could cost less than $30,000 and customers would be able to buy one.
Before it hits the road, Tesla plans to deploy a fully autonomous version of its so-called “Full Self-Driving” software, a feature that now needs driver supervision, in Texas and California next year. This would run on two of its existing vehicles, the Model 3 and Model Y, though it wasn’t clear whether customers would be able to download it or ride in those cars. The new Cybercab was metallic with a band of headlights along the front end. Tesla had around 20 Cybercabs and 30 other Teslas running unsupervised “Full Self-Driving” software at the event to take guests on rides around the studio lots.
Anduril To Sell Small, Affordable Drones To US Marines After Success In Ukraine
Anduril Industries released new, autonomous drones on Thursday for intelligence gathering and lethal missions, to take advantage of surging demand spurred by the success of similar products in Ukraine that are much cheaper than fighter jets. Russia's invasion of Ukraine has highlighted the importance of loitering munitions - lightweight aerial weapons that can hover over, survey an area and make quick and precise strikes - instead of much more expensive, and vulnerable, fighter jets. Privately-owned Anduril said it is on contract to deliver lethal Bolts to the U.S. Marine Corps. Typical Bolt configurations cost in the low tens of thousands of dollars, the company said.
The vertical takeoff and landing (VTOL) Autonomous Air Vehicles (AAVs) are designed to provide flexible capabilities for a range of missions, from intelligence, surveillance, and reconnaissance (ISR) to search and rescue operations as well as a loitering munitions version for targeting enemy forces. The systems have a flight time of over 40 minutes and a range of 20 km (12 miles), the company said.
UAlbany Unveils New AI Supercomputer
The state University at Albany unveiled Thursday a powerful new artificial intelligence supercomputer to prepare graduates to live and work in a world with the developing technology, or pursue careers in the field. The unveiling comes as the University at Buffalo prepares to unveil the first phase of its Empire AI Consortium on Friday — marking the next step to define artificial intelligence research that will help people learn and come together to solve complex issues quickly.
UAlbany's $16.5-million supercomputer is part of the university's AI Plus initiative. The up-and-running technology has 192 graphic processing units and over three miles of fiber optic cable to accommodate high-intensity AI tasks. The new supercomputer was installed at the university over the last few months, and will be used in partnership with Rensselaer Polytechnic Institute and other institutions. Researchers said Thursday that AI will help tackle significant problems, including removing forever chemicals, developing innovative medical treatments or weather prediction. UAlbany officials said the university hopes to partner with additional campuses, and eventually the private sector, to make the technology more widely available in the Capital Region. The partnerships will help maintain the supercomputer and make future upgrades as needed.
Read More at New York State of Politics
SpaceX Catches Huge Booster Back at Launchpad
SpaceX caught a towering booster rocket back at its launchpad in south Texas, an engineering milestone for the Starship vehicle at the center of Elon Musk’s plans for deep-space exploration. The Super Heavy booster, the first stage of Starship, lifted off from south Texas on Sunday morning and propelled the Starship craft into space. Shortly after the launch, SpaceX made the call to return the booster back to the pad from which it had launched. It was SpaceX’s first attempt at the catch, a feat that the company and Musk, its chief executive, have said are key to reducing the cost of rocket launches.
Catching the booster was a primary goal of Sunday’s launch, the fifth time SpaceX has conducted a test flight of Starship and one that came after the company criticized the Federal Aviation Administration for its pace in approving Starship missions. The FAA, which licenses private space launches, said Saturday it had approved the Starship test. The idea behind catching the booster is that SpaceX could, in the future, stack the Starship spacecraft back on top of one that landed at a pad and quickly launch again. Multiple Starship launches will be important for lunar operations for NASA.