Member Briefing October 2, 2024
JOLTS Job Openings Rise To 8.04 Million, Quits Rate Lowest Since 2020
In August, the Job Openings and Labor Turnover Survey (JOLTS) report from the Department of Labor showed there were 8.04 million jobs open at the end of August, an increase from the 7.71 million seen in July. Economists surveyed by Bloomberg had expected the report to show job openings ticked up slightly to 7.67 million in August. At the same time Workers are becoming increasingly wary of searching for new jobs amid a slowing labor market.
The data from the Bureau of Labor Statistics showed that the quits rate, a sign of confidence among workers, ticked down to 1.9% in August from July's 2%, marking the slowest pace since June 2020. Meanwhile it also showed 5.31 million hires were made during the month, down from the 5.41 from July. The hiring rate hit 3.3% in August down from the 3.4% in July. Excluding the pandemic, the hiring rate was at its lowest level since 2013 in August. "The quits rate fell to the lowest since the pandemic, and the decline is consistent with other data showing workers view the labor market less favorably," Nancy Vanden Houten, lead economist at Oxford Economics, wrote in a note to clients on Tuesday.
US ISM Manufacturing PMI Stays Unchanged In Contraction Territory At 47.2, Prices Paid Fall Sharply.
The September ISM suggested more of the same for U.S. manufacturing. The ISM index held steady at 47.2 last month and the vibe from purchasing managers is one of waiting. Waiting for the outcome of the presidential election, and waiting on more interest rate cuts to be realized and translate to lower borrowing costs. Take it from a respondent from fabricated metals' industry “The fourth quarter is slower than anticipated. We won’t realize the effect of interest rate adjustments with new project starts until the first quarter of 2025.” Uncertainty is the biggest challenge when it comes to capex. You can plan for a change in rates and different policy, but not knowing what to plan for is the biggest headwind.
Even as continued uncertainty kept the overall ISM in check, there was some movement under the surface. The most positive development was the five-point gain in the production index, which suggests some stabilization in activity, though conditions are still constrained with the reading a touch below 50 at 49.8. The prices paid component also plummeted over five points to 48.3, which marks the lowest reading of the year and first time it's slipped below 50. On the other hand the employment component fell to 43.9, consistent with weak labor-market conditions. Manufacturing hiring has been weaker than the broader labor market with only two of 18 industries reporting employment growth last month.
Economist: Factory Growth to Outpace Broader Economy Over Next Two Years
The manufacturing sector “is going to be a real positive” for the jobs market over the next two years, a veteran economist says, as factories will shake off their recent sluggishness and produce growth outpacing that of the economy as a whole. Speaking to the UHY Annual Manufacturing Outlook held in Albany on Sept. 26, Hugh Johnson said leading indicators as well as investor sentiment suggests the U.S. economy will continue to expand in 2025 and 2026, with the first part of next year being the trough for both GDP and employment growth.
Johnson’s firm, Hugh Johnson Economics, expects manufacturing to put up stronger growth numbers than the broader economy in the next two years, carried in large part by motor vehicle and computer-related production. For 2025, Johnson is forecasting GDP to grow 1.8% but thinks manufacturing will grow 2.3%. In 2026, he expects manufacturing’s growth of 2.5% to outpace the total economy by 0.3 percentage points. On the employment front, his team sees hiring regaining steam this quarter and next—it’s forecasting that firms will add 48,500 jobs, more than offsetting the less of 15,000 in the first half of this year—and then further expand their payrolls. In 2025, Johnson expects manufacturers will hire a net of 103,000 people; in 2026, he expects growth will accelerate to 150,000.
Global Headlines
Middle East
- Israel And Hamas: The Latest News – The Guardian
- Iran Launches Salvo Of Ballistic Missiles At Israel - Reuters
- US Military Helps Israel Shoot Down Iranian Missiles, Officials Say – ABC News
- Four Killed, Seven Wounded In Shooting Attack In Israel’s Jaffa, Two Shooters Neutralized – Times Of India
- Israeli Forces Conduct Operations in Lebanon After Crossing Border Overnight - WSJ
- Tanks And Jets On The Move At Israel-Lebanon Border - BBC
- US Deploying More Troops, Aircraft To Middle East – The Hill
- Houthi Attacks Damage Oil Tanker and Bulk Carrier in the Red Sea – Oil Price
- Israel Risks A Long Fight In Lebanon – 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
- Ukraine’s Defense Minister Fires 3 Deputies In Big Shake-Up - Politico
- France Says Sending Troops to Ukraine 'Serious Option' - Newsweek
- 'The Country Is Lost': Fear And Uncertainty In Lebanon As Israel Invades - BBC
- Putin Orders Conscription Of 133,000 Servicemen In Russia's Autumn Draft - Reuters
- Mark Rutte Takes Over As New NATO Chief – France 24
- NATO Will Support Ukraine Whoever Wins U.S. Election, Says New Leader - 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
- VIDEO: Russian Fighter Jet Nearly Sideswipes US F-16 Near Alaska – Defense One
- Mexico's Sheinbaum Takes Office, Making History As First Woman President - Reuters
- China’s Housing Glut Collides With Its Shrinking Population - WSJ
- Rwanda Reports Eight Deaths Linked To Ebola-Like Marburg Virus – France 24
- European Central Banks Quickening Pace Of Their Monetary Easing – Wells Fargo
- NBA Legend Mutombo Dies From Brain Cancer Aged 58 - BBC
- Haiti’s Displaced Facing ‘Catastrophic’ Food Insecurity – France 24
- Japan's Shigeru Ishiba Chosen As Prime Minister In Diet Vote - Nikkei Asia
Policy and Politics
Happy Fiscal New Year!
Another federal fiscal year is in the books. Today marks the first day of FY 2025, and the new year is a time for reflecting upon the past year and looking ahead to the new one. With the 2024 presidential election just one month away, the U.S. fiscal policy outlook is sharply in focus. In this report, we have selected some of our favorite charts on U.S. fiscal policy and paired them with a short blurb highlighting some key trends in the finances of the federal government. We hope you find them informative and have a wonderful fiscal new year.
Federal spending increased by $392 billion (+7%) through the 11 months of FY 2024 for which we have data. Outlay growth outpaced nominal GDP growth despite the latter being on track to grow by a very solid 5.5% in FY 2024. Yet, just a handful of spending categories have accounted for the entirety of the year's outlay growth. Interest spending on the national debt jumped by $227 billion, while spending on Social Security and health insurance for the elderly (Medicare) accounted for a combined $174 billion increase in expenditures. Spending on national defense (+$52 billion) and veterans (+$40 billion) also saw meaningful growth this fiscal year. But, beyond those categories, federal outlays on all remaining programs declined by roughly $100 billion.
Hurricane Helene Death Toll Rises as Rescuers Scramble to Reach Flooded Towns
Rescuers raced to reach isolated communities cut off by devastating floods in the wake of Hurricane Helene, as the death toll surpassed 100 across six states in the Southeastern U.S.Search teams hiked mountainous terrain to look for survivors, authorities in North Carolina said, and some towns were completely washed away in one of the most damaging and deadly hurricanes to hit the U.S. in recent years. “This is an unprecedented storm that requires an unprecedented response,” North Carolina Gov. Roy Cooper said Monday morning. Recovery crews were airlifting supplies into areas that weren’t reachable by land, he said on CNN.
Officials in Buncombe County, N.C., said they had received more than 600 missing persons reports as of Sunday. In the county, which includes Asheville, 40 people have died. Five people were confirmed dead in Henderson County, also located in western North Carolina. Homes and other buildings were washed away and key infrastructure failed. Many roads remained closed Monday and cellphone service was spotty, making it difficult for people to check on and help their relatives and friends days after the storm struck.
How To Help After Hurricane Helene
Amazon Wins Partial Dismissal Of U.S. FTC's Antitrust Lawsuit
Amazon.com Inc won partial dismissal of a U.S. Federal Trade Commission lawsuit accusing it of maintaining illegal monopolies, though the details of the ruling by a federal court in Seattle on Monday were not immediately clear. In its complaint last year, the FTC claimed Amazon hampers competition, in part by pushing sellers to use its advertising and fulfillment services. Amazon argued in its motion to dismiss the case that its price-matching and Prime shipping services benefit consumers and are examples of its efforts to compete with thousands of online and brick-and-mortar retailers. The FTC has accused the online retailer of using anti-competitive tactics to maintain dominance among online superstores and marketplaces. The case is one of five blockbuster lawsuits where antitrust regulators at the FTC and U.S. Department of Justice are going after Big Tech.
Amazon asked U.S. District Judge John Chun to dismiss the case in December, saying the FTC had raised no evidence of harm to consumers. Chun issued a sealed ruling, partially granting Amazon's motion. The FTC will be allowed to continue to pursue any claims the judge did not permanently dismiss, court records showed. Chun also ruled the case will be tried in two parts, rejecting Amazon's bid to have the FTC present evidence of the alleged violations and its proposed remedies in the same trial.
Health and Wellness
U.S. Breast Cancer Deaths Keep Declining, Though Disparities Remain
While women overall are less likely to die of breast cancer now, some alarming disparities remain, a new American Cancer Society (ACS) analysis warns. Death rates for American Indian and Alaska Native women haven't changed for the past 30 years, according to the new report. And breast cancer incidence continues to grow -- rising 1% a year between 2012-2021. The biggest increases were among women under 50 (1.4% a year) and Asian American/Pacific Islander women of any age (2.5%-2.7% per year).
Overall, death rates due to breast cancer have dropped 44% since 1989, saving about 517,900 lives since that time, the ACS estimates. However, breast cancer remains the leading cause of cancer death in Hispanic women and is second only to skin cancer among all U.S. women. The findings are reported in Breast Cancer Statistics 2024, the cancer society's biennial update on U.S. breast cancer trends. They were published Oct. 1 in CA: A Cancer Journal for Clinicians. Researchers project that 310,720 new cases of invasive breast cancer will be diagnosed in the United States this year and that 42,250 women will die from the disease.
Read more at US News and World Report
Election 2024
- Walz, Vance Spar politely in Policy Heavy US Vice Presidential Debate - Reuters
- 2024 Presidential, House And Senate Election Forecast, Ratings And Analysis - WSJ
- Democrats Ask Georgia Judge To Block New Election Rules - Reuters
- 5 Possible October Surprises That Could Roil The Trump-Harris Race – The Hill
- Poll Shows A Tight Race In Pennsylvania, With Warning Signs For Harris Among Older Voters - Politico
- Why Nevada Is So Close In 2024 – 538
- A Century Of Jimmy Carter: Longest-Living Former President Turns 100 – The Hill
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Real Clear Politics Electoral Map
- Latest Polls - FiveThirtyEight
Industry News
ILA Strike Impacts Will be Far Reaching
Dockworkers at major ports along the U.S. East and Gulf Coasts went on strike Tuesday after last-minute negotiations yielded no new labor contract, a stoppage expected to drag on the world's largest economy. The International Longshoremen's Association (ILA) said the walkout by its workers marks the first "coast wide strike in almost 50 years". A possible stoppage had been telegraphed for months, with the odds rising in recent weeks as the two sides described themselves as far apart.
“Unlike the major strike in the 1970s, the world has changed—our reliance on the global economy and supply chains is far greater now. Manufacturing processes, price points and consumer conditioning have evolved,” says Pawan Joshi, EVP of products and strategy at supply chain platform e2open. “All industries will be impacted by the strike, but some of the most impacted will include energy, petrochemicals, agriculture, manufacturing and machinery, automotive, retail and consumer goods, pharmaceuticals, chemicals, food and beverage and construction materials,” according to project44. The platform also reports the Gulf Coasts handle about 25-30% of U.S. exports of heavy equipment and industrial machinery, and East Coast ports handle approximately 30-35% of U.S. automotive imports.
What's in Store for Manufacturing Day, from New Jersey to North Dakota
The first Friday in October is Manufacturing Day, a grassroots celebration of the versatility and possibilities of careers in manufacturing. This year, the official date on the calendar is Oct. 4, but all month long, manufacturers and organizations will open their doors to school groups, families and the general public. Company leaders and line workers alike will show off the latest technology, answer lots of questions, talk about educational and career paths and have some fun activities planned.
The Manufacturing Institute’s website lists more than 600 Manufacturing Day events this year, all over the country. Locally events are planned at Schatz Bearing, Sono-Tek, Dorsey Metrology Valley Central High School, and MPI, Inc.
Hurricane Helene Devastates Quartz Mines Critical For Worldwide Semiconductor Manufacturing
Hurricane Helene, which recently hit North Carolina, caused severe flooding and damage across a vast swath. Among the areas affected is the small town of Spruce Pine, which is home to high-purity quartz mines, the only facilities that produce ultra-pure quartz in the world. High-purity quartz is vital for various stages of chip production, so if its supply is disrupted, this could hurt the semiconductor industry, which is already struggling with supply issues. It is too early to say how severe the situation might get. Large companies tend to stockpile crucial raw materials and identify potential second sources in case of a natural disaster, so the impact may be limited.
There are two companies that mine ultra-pure quartz in Spruce Pine: Sibelco North America and The Quartz Corp. When asked by The Verge, a spokesperson from The Quartz Corp. stated that it was too early to determine whether the company's high-purity quartz production facility has been affected, as its current focus was on the local people and families impacted by the storm. Sibelco has purportedly confirmed a suspension of operations, but our repeated attempts to reach the company were fruitless due to a lack of phone service in the impacted area. The global semiconductor industry is already in a fragile state after years of struggling with supply shortages triggered by the COVID-19 pandemic, the ongoing war between Russia and Ukraine, and China's attempts to prohibit exports of gallium and germanium.
CERN Turns 70: How It Has Changed the World
Physicists celebrating this milestone are committed to unraveling the secrets of dark matter and other cosmic enigmas while promoting science as a force for peace in an increasingly conflict-ridden world. Located on the Swiss-French border near Geneva, CERN has become a household name over the past seven decades, even as its intricate operations remain a mystery to many. CERN—was born from a 1951 U.N. meeting aimed at establishing a world-class physics research facility in Europe. Today, it is best known for the Large Hadron Collider (LHC), a monumental machine that accelerates particles through a 27-kilometer (17-mile) underground loop, smashing them together at close to the speed of light.
CERN's groundbreaking experiments led to the 2012 discovery of the Higgs boson, a fundamental particle that completed the Standard Model of particle physics. It was here that the World Wide Web was conceived by Tim Berners-Lee 35 years ago, revolutionizing information sharing and paving the way for today's digital landscape. The center's innovations have far-reaching implications, with thousands of smaller particle accelerators now operating globally, contributing to fields such as medicine and technology. Crystals developed for CERN experiments are now essential in PET scanners, enabling early detection of diseases like cancer.
Oil Price Jumps on Iran Mille Launch Rumors
Oil prices are surging in the wake of rumors that Iran is preparing to launch a missile attack on Israel. Reports from U.S. officials suggest that an Iranian missile strike is imminent—the specter of which is driving uncertainty across global markets. As of today, West Texas Intermediate (WTI) crude is trading at $70.16 per barrel, up 2.92% (+$1.99), while Brent crude is also seeing significant gains, trading at $73.61 per barrel, up 2.66% (+$1.91). According to the White House, the U.S. is actively supporting Israel's defense and warning Iran of severe consequences if an attack is carried out.
The potential for an armed conflict between Iran and Israel has triggered concerns about the stability of oil supplies from the oil-rich Middle East. Market watchers are reacting to the heightened risk of supply disruptions, which could intensify if the conflict spreads or targets key infrastructure in oil-producing nations. Iran has a significant influence on the region's oil flows, and any escalation in military activity has the potential to hinder exports, driving prices higher.
Construction Spending Falls In August On Single-Family Homebuilding
U.S. construction spending unexpectedly fell in August amid a sharp drop in outlays on single-family housing projects, but declining borrowing costs could stimulate activity in the months ahead. The Commerce Department's Census Bureau said on Tuesday construction spending dipped 0.1% after a downwardly revised 0.5% drop in July. Economists polled by Reuters had forecast construction spending would edge up 0.1% after a previously reported 0.3% decrease. Construction spending increased 4.1% on a year-on-year basis in August.
Spending on private construction projects slipped 0.2% in August after declining 0.7% in July. Investment in residential construction fell 0.3% with outlays on new single-family projects slumping 1.5%. Spending on multi-family housing units fell 0.4%. But spending on home renovations increased. Investment in private non-residential structures like offices and factories dipped 0.1%. Spending on public construction projects advanced 0.3% after rising 0.5% in July. State and local government spending rose 0.3% and outlays on federal government projects increased 0.5%.
Commercial Space’s Critical Role In The Race To Outpace Adversaries
Irresponsible weapons tests, such as Russia’s Nov 2021 destructive test of a direct ascent anti-satellite missile test, provided a glimpse of what combat in space could entail. Equally alarming is China’s heavy investments in its own military space assets. According to Air & Space Forces Magazine, Beijing has increased on-orbit assets by 500% since December 2015, enabling China’s long-range strike capabilities. Adversaries displaying reckless and provocative behaviors such as operating their satellites near United States spacecraft endanger the U.S. Space Force’s ability to receive viable data when and where our warfighters need it most.
A positive step forward is the U.S. Space Force’s new Commercial Space Strategy and the DoD’s push for Hybrid Architectures that combine DoD, commercial and allied systems for more resilient, redundant and combat-effective capabilities. One thing is clear: we can’t afford to move slowly. The historic pace of procuring satellites using the 1990’s approach of satellite acquisitions is no longer an option. The historic approach is cemented in bureaucracy, large, exquisite satellites and old ways of operating that often stall progress and momentum.
Medical Device Manufacturers Cynosure Wins $25M Verdict In Poaching Trial
Medical device company Cynosure secured a $25 million jury award after a Massachusetts federal court found that rival Reveal Lasers and two former Cynosure sales managers had violated noncompete, nonsolicitation, and nondisclosure agreements. Cynosure claimed that the departing employees took critical business information, including trade secrets on thumb drives, which would provide significant competitive advantages to Reveal Lasers, a company competing in the cosmetic medical device market for treatments like laser hair removal and wrinkle reduction. The verdict concludes a contentious trial over claims that Reveal Lasers raided Cynosure’s sales and marketing teams, causing significant business losses.
The jury determined that former Cynosure sales managers Robert Daley and Christopher Chambers were responsible for leading an exodus of over two dozen employees from Cynosure to Reveal Lasers in 2022. This move, which included the alleged theft of trade secrets, resulted in Daley and Chambers violating their noncompete and nonsolicitation agreements, as well as the implied covenant of good faith and fair dealing.