Member Briefing October 16, 2024
Empire Manufacturing Survey – ‘Modest Contraction’ in October
After briefly picking up last month, manufacturing activity declined modestly in New York State, according to the October survey. The general business conditions index fell twenty-three points to -11.9.
The new orders index fell twenty points to -10.2, and the shipments index fell twenty-one points to -2.7, pointing to declines in both orders and shipments.
Unfilled orders were little changed. The inventories index fell eight points to -7.5, indicating that inventories were lower.
The delivery times index edged down to -3.2, suggesting that delivery times were somewhat shorter.
Labor market conditions improved. The index for number of employees climbed ten points to 4.1, its first positive reading in a year, and the average workweek index edged up to 4.7
Price increases remained modest but ticked up somewhat: the prices paid index rose six points to 29.0, and the prices received index rose three points to 10.8.
Optimism about the outlook grew strongly. The index for future business activity moved up eight points to 38.7, a multi-year high, with 55 percent of respondents expecting conditions to improve over the next six months.
Capital spending plans were modestly positive.
Logistics Operators Set Cautious Seasonal Hiring Plans
Logistics operators and fulfillment providers are largely holding their seasonal hiring plans steady with last year as they prepare for what they expect to be a muted holiday shopping season. Some companies are also dialing back hiring to fit what they believe will be a longer, flatter period of demand this year rather than a sharp spike leading up to Christmas. Amazon, Target and Walmart each held big sales earlier this month, kicking off the shopping season over a month before Black Friday. About half of shoppers recently surveyed by financial-services company Bankrate said they planned to start buying gifts before Halloween.
Amazon.com plans to hire about 250,000 workers for the peak season for a second straight year. Target said it will bring on 100,000 additional workers this year across its stores and distribution centers, the same as last year. Walmart said its seasonal staffing will be consistent with recent years. United Parcel Service is an exception to the sector’s overall caution, with plans to hire 125,000 workers this year, up from 100,000 seasonal hires in 2023. The delivery giant said it is hiring more people to accommodate a shorter period this year between Black Friday, the day after Thanksgiving that generally marks the start of the holiday shopping rush, and Christmas compared with last year.
Real Wages Increased in September
Real average hourly earnings for all employees increased 0.2% in September, resulting from a 0.4% rise in average hourly earnings combined with a 0.2% increase in inflation. Despite this gain, real average weekly earnings decreased 0.1% due to a 0.3% reduction in the average workweek. In the past year, real average hourly earnings increased 1.5%, resulting in a 0.9% rise in real average weekly earnings, despite the continued decrease in the average workweek.
For production and nonsupervisory employees, real average hourly earnings increased 0.1% from August to September, resulting from a 0.3% rise in average hourly earnings and a 0.1% increase in inflation. Unlike for all employees, real average weekly earnings for this group rose 0.1%, due to a 0.3% increase in average weekly earnings and no change in the average workweek. In the past year, real average hourly earnings grew 1.8%, contributing to a 1.4% increase in real average weekly earnings over the year, despite the shorter average workweek.
Global Headlines
Middle East
- Israel And Hamas: The Latest News – The Guardian
- Inside Israel’s Ground Offensive in Lebanon - WSJ
- US Troops Arrive In Israel To Help Operate Missile Defense System – The Hill
- Spain’s Sánchez Urges Brussels To Suspend Trade Deal With Israel - Politico
- Iranian General Vows to 'Obliterate All the Zionists' - Newsweek
- No Peace To Keep? Israel Pressures United Nations In Lebanon – France 24
- Macron Warns Netanyahu He ‘Must Not Forget’ Israel Was Created By UN Decision - Politico
- 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
- US To Expand NATO Air Base To Hold Nuclear-Capable Fighter Jets - Newsweek
- France set to miss €3B mark for Ukraine aid - Politico
- Israel's Demining Near Golan Signals Wider Front Against Hezbollah, Sources Say - Reuters
- Russia Jails French Researcher Laurent Vinatier For Three Years In 'Foreign Agent' Case – France 24
- Kursk Map Shows Russia Regain Nearly Quarter of Lost Territory - Newsweek
- This Laser Weapon Zaps Drones at $3 a Beam - WSJ
- 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
- How A Sikh Leader's Murder In Canada Led To A Diplomatic Crisis With India – France 24
- US Raises Concern Over Chinese Military Drills Near Taiwan – The Hill
- German Economic Expectations Climb Ahead of ECB Rate Cut - WSJ
- Can China Find A Way Around US Restrictions On Hi-Tech Computer Chips? - SCMP
- Russia and China Are Using Cyber Criminals to Target US: Microsoft - Newsweek
- Taiwan Reports Record 153 Chinese Aircraft Near Island During Military Drills – France 24
- Hailing the end of graft in Mexico, lawmakers advance judicial overhaul - Reuters
- Behind Xi Jinping’s Pivot on Broad China Stimulus – WSJ
Policy and Politics
Americans Trust Local Government Over Congress, Media: Gallup
The Gallup survey, released Monday, shows 67 percent of respondents said they had a “great deal” or “fair amount” of trust and confidence in the local governments around them. In comparison, only 34 percent said the same about Congress, and just 31 percent shared confidence in mass media to report on the news “fully, accurately, and fairly.” Survey respondents were also more likely to trust state governments, 55 percent, and the American people as a whole when it comes to making judgements about the issues facing the country, 54 percent, according to the survey, than news organizations and federal lawmakers, the survey shows.
The numbers share a trend with a similar survey conducted around this time last year, when 32 percent of Americans said they trusted Congress. A separate poll from last year found the same number of respondents, 32 percent, said they had good faith in the media.
These “Discouraged” Workers Are Left Out Of The Unemployment Rate
According to the Bureau of Labor Statistics, Chelsea Kidd is not technically a “discouraged worker.” But listening to her frustration with her job search, she might be close. She said she’s applied to somewhere between 50 and 100 jobs, but she hasn’t seen many that would actually be a good fit. Especially any jobs that don’t require her to move. “So these are guys that aren’t necessarily part of the unemployment pool, but they float back and forth,” said Jason Faberman, an economist at the Federal Reserve Bank of Chicago. “And one of the reasons they’ve stopped looking for work is they just don’t think there’s anything out there.”
The Bureau of Labor Statistics reported the official unemployment rate was 4.1% last month, more evidence that the labor market, while cooling, is by historical standards pretty healthy. Because Kidd actively searched for jobs last month, the Bureau of Labor Statistics counts her as one of the 6.8 million people officially unemployed in September. But if she took a break from all those time-consuming cover letters and resumes and applications, BLS would categorize her a “discouraged worker” and not part of that official 4.1% unemployment rate.
$750 Million CHIPs Funding Going To North Carolina-Based Wolfspeed For Advanced Computer Chips
The Biden-Harris administration announced plans Tuesday to provide up to $750 million in direct funding to Wolfspeed, with the money supporting its new silicon carbide factory in North Carolina that makes the wafers used in advanced computer chips and its factory in Marcy, New York. Wolfspeed’s use of silicon carbide enables the computer chips used in electric vehicles and other advanced technologies to be more efficient. The North Carolina-based company’s two projects are estimated to create 2,000 manufacturing jobs as part of a more than $6 billion expansion plan.
In addition to the government grant, a group of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company and Capital Group plan to provide an additional $750 million to Wolfspeed, the company said. Wolfspeed also expects to receive $1 billion from an advanced manufacturing tax credit, meaning the company in total will have access of up to $2.5 billion. Wolfspeed CEO Gregg Lowe told The Associated Press that the United States currently produces 70% of the world’s silicon carbide — and that the investments will help the country preserve its lead as China ramps up efforts in the sector.
Health and Wellness
More Children Are Depressed and Anxious. Is Social Media Really Behind It?
America’s children and teens love social media. But concern is growing that using it is causing more harm than good, and lawmakers and parents are calling for limits. Even as young people report crisis levels of depression, anxiety and suicidal thoughts, it is unclear to what extent social-media use is contributing to the trend that federal agencies have documented in teens and children over the past decade.
It doesn’t help that mental health is influenced by many factors, and no single treatment works for every person. “It’s not as straightforward as: What is the right antibiotic for that ear infection?” said Megan Moreno, a scientist and pediatrician at the University of Wisconsin-Madison, and co-director of the Center of Excellence on Social Media and Youth Mental Health at the American Academy of Pediatrics. All this makes it difficult to get answers to critical questions: Who is vulnerable? What kinds of content—seen with what frequency—are harmful? And at what age?
Election 2024
- 5 Takeaways From Trump’s Bloomberg Interview – The Hill
- Electoral College Map Projector Flips Three Swing States to Donald Trump - Newsweek
- How Would Donald Trump And Kamala Harris Change Your Taxes? Here’s What To Know. - Forbes
- Harris And Trump’s Biggest Celebrity Endorsements - Forbes
- Trump Edges Out Harris With Early Voters In Battleground States – The Hill
- House GOPers Score Labor Endorsements In Key Swing NY Districts: ‘Moved To The Right’ – NY Post
- Josh Riley, The Democrat Seeking To Unseat Marc Molinaro In NY-19, Talks Immigration, Abortion, Israel - Spectrum
- The Many Missteps Of Mondaire Jones – City & State
- Real Clear Politics General Election Polls
- Real Clear Politics Electoral Map
- Latest Polls - FiveThirtyEight
Industry News
Space Force Taps Into Small and Mis Sized Businesses For New Ground System
The Space Force wants to transition the first of its space domain awareness satellite programs to a new cloud-based ground system as soon as next spring — and rather than work with a traditional defense contractor, it’s formed a consortium of small, commercial firms to help it modernize satellite operations. The Space Rapid Capabilities Office in September awarded initial contracts to 20 small businesses who will compete for $1 billion worth of task orders over the next five to seven years. The companies span a range of expertise. Aalyria, a spinoff from Google parent company Alphabet, develops software to help organizations manage satellite networks and builds laser communication terminals. A Colorado-based firm, Infinity, specializes in systems engineering.
Col. Greg Hoffman, who leads the Rapid Resilient Command and Control program, or R2C2, said being able to take advantage of the breadth of experience and specialization represented across those firms is important for a program that aims to build a more resilient, capable ground operations system. R2C2 builds on two previous Space Force ground programs: the Space RCO’s Ground Command, Control and Communications program; and Space Systems Command’s Enterprise Ground Services, or EGS, program. EGS in particular sought to bring together the Space Force’s many command and control systems, but its scope was too broad and its requirements too complex.
Google Backs New Nuclear Plants to Power AI
Google will back the construction of seven small nuclear-power reactors in the U.S., a first-of-its-kind deal that aims to help feed the tech company’s growing appetite for electricity to power AI and jump-start a U.S. nuclear revival. Under the deal’s terms, Google committed to buying power generated by seven reactors to be built by nuclear-energy startup Kairos Power. The agreement targets adding 500 megawatts of nuclear power starting at the end of the decade, the companies said Monday.
The arrangement is the first that would underpin the commercial construction in the U.S. of small modular nuclear reactors. Many say the technology is the future of the domestic nuclear-power industry, potentially enabling faster and less costly construction by building smaller reactors instead of behemoth bespoke plants. “The end goal here is 24/7, carbon-free energy,” said Michael Terrell, senior director for energy and climate at Alphabet’s Google. “We feel like in order to meet goals around round-the-clock clean energy, you’re going to need to have technologies that complement wind and solar and lithium-ion storage.”
Union Slams Wage Offer For Key German Industries With Threat Of Strikes
Germany's largest industrial union slammed a proposed pay rise for almost 4 million workers in key sectors on Tuesday as too little too late, teeing up difficult collective bargaining negotiations and possible strikes in Europe's largest economy. The 3.6% raise over a period of 27 months - announced formally by the regional employers' association Nordmetall on Tuesday and in line for what would be put on the table nationally - is considerably lower than the 7% sought by the union. Employers represented in the talks, which are taking place across the country, include Siemens, Mercedes-Benz and BMW.
"It's too little, the pay rises come too late and the term is too long," said Daniel Friedrich, chief negotiator for the IG Metall union's regional district in northern Germany. "Our offer is a sign of appreciation for employees, even in times of crisis. At the same time, we are at the limit of what our member companies can cope with across the board," said Lena Stroebele, who is leading the negotiations on behalf of employers in the northern district.
Bank Earnings – CitiGroup, Bank of America and Goldman Sachs Beat Expectations
Citigroup reported third-quarter results Tuesday that beat Wall Street expectations, with growth in investment banking and wealth management. However, the bank set aside more money to offset potential loan losses. Citi’s banking division reported an 18% increase in revenue year over year, led by a 31% gain in its investment banking arm. Wealth revenue rose 9%.
Goldman Sachs topped estimates for third-quarter profit and revenue on strong results from its stock trading and investment banking operations. Equities trading posted an 18% revenue increase to $3.5 billion, more than half a billion dollars higher than the $2.96 billion estimate from StreetAccount. Investment banking revenue jumped 20% to $1.87 billion, on strength in debt and equity underwriting.
Bank of America topped analyst estimates for third-quarter profit and revenue on better-than-expected trading results. The bank said Tuesday that net income fell 12% from a year earlier to $6.9 billion, or 81 cents a share, on higher provisions for loan losses and rising expenses. Net interest income fell 2.9% to $14.1 billion, edging out the $14.06 billion estimate.
Army Races To Widen The Bottlenecks Of Artillery Shell Production
The U.S. Army has started diversifying its supplier base for 155mm artillery shells, moving away from the bottleneck of a single source that has endangered the flow of fresh ammo, according to a top service official. The service is racing toward a goal of shoring up all major single sources that provide parts or materials for 155mm munitions by the end of 2025. Prior to the war in Ukraine, the U.S. could build about 14,400 of the artillery shells per month. But as Ukrainian forces burn through the ammunition for howitzers sent to the country, the U.S. recognized quickly that replenishment could not be done with the current infrastructure.
The Pentagon is investing billions of dollars to increase the capacity of 155mm munition production as it races to replenish stock sent to support Ukraine’s fight against the Russian invasion, which began in early 2022, and to ensure the U.S. has what it might need should conflict erupt across multiple theaters at once. The Army planned to spend $3.1 billion in FY24 supplemental funding alone to ramp up production.
Boeing to Sell at Least $10 Billion in Shares to Plug Cash Drain
Boeing BA is moving to raise at least $10 billion by selling new shares in a bid to stabilize its increasingly precarious finances. The jet maker, in a pair of regulatory filings on Tuesday, told investors it could issue up to $25 billion in shares or debt during the next three years while also entering into a new credit agreement with lenders. Under the shelf registration, Boeing is expected to pursue a stock offering that raises around $10 billion, according to people familiar with the matter.
Boeing ended September with $10.3 billion in cash and securities, close to the minimum amount the company has said it needs to operate. The new $10 billion credit agreement is in addition to about $10 billion in existing, untapped revolving credit agreements. Boeing has $45 billion in net debt. “These are two prudent steps to support the company’s access to liquidity,” Boeing said in a statement. Boeing shares, which began the year around $250, were little changed in premarket trading near $150. Credit-rating firms have warned that the company needed to raise capital and that its debt could be downgraded to junk status.
Dow Jones Industrial Average adds 200 points for first close above 43,000
The S&P 500 and the Dow Jones Industrial Average rose to fresh records Monday as investors awaited the next batch of key corporate earnings. The broad market index climbed 0.77% to 5,859.85, while the 30-stock Dow advanced 201.36 points to 43,065.22. Both averages hit all-time highs and closed at records, with the Dow ending the session above the 43,000 mark for the first time. The Nasdaq Composite added 0.87%, closing at 18,502.69.
Despite the market climbing to new all-time highs, investors remain anxious against a backdrop of a closely contested presidential election in three weeks, suddenly rising Treasury yields, uncertainty about the pace of Federal Reserve policy easing and escalating geopolitical risks in the Middle East. The S&P 500 has gained almost 23% this year, excluding reinvested dividends. The bull market recently turned two years old, and the benchmark has rallied about 63% in total since hitting a closing low in October 2022. Treasury yields have risen lately, too, with the benchmark 10-year note yield, used to calculate everything from mortgages to auto loans, topping 4.1% last week.
New Report Reveals Financial Costs Of Unnecessary Tasks, Low-Impact Work
Organizations are losing an average of $15,138.03 per employee annually due to unnecessary tasks, according to a new report from Wrike. Wrike's 2024 Impactful Work Report found that employees are spending 11.24 hours or 30% of their work week on unnecessary work. The biggest time waster? Finding information from multiple systems because it isn’t all accessible through a single interface (2.4 hours). Also a problem are:
Having to find and send information to other people they work with because it isn't easily accessible to them (1.4 hours)
Chasing other people they work with for status updates, approvals, etc. (1.5 hours)
Doing work only to find actions weren't recorded correctly, so it isn't what should have been done (1.1 hours)
Repeating work they've already done because the original work was lost (1 hour)
Doing work only to find out someone else has also done the same thing, so they've duplicated one another's actions (1 hour)
Repeating work they've already done because they can't demonstrate to superiors that it's been done (0.9 hour)
Read more at Human Resources Director