Member Briefing October 22, 2024
Comparing The Manufacturing Policies of 2024 Presidential Candidates Two Weeks From Election Day
The 2024 presidential election is less than a month away and manufacturing remains a hot topic as voters get ready to head to the polls. And on the tails of massive post-pandemic supply chain disruptions, inflation, see-sawing demand, and labor woes, U.S. manufacturers are following this election year with great interest in the hopes that the chosen candidate’s policies will serve to bolster business conditions.
While the economic and manufacturing policies of former President Donald Trump and Vice President Kamala Harris share some common themes, there are some key differences that have taken shape over the past several months that manufacturers should be aware of. This article will explore each candidate’s stances on issues most important to manufacturers, such as tariffs, taxes and energy policy.
Weak Factory Orders Drag Conference Board’s Leading Economic Indicators Lower
The Leading Economic Index (LEI) declined 0.5% to 99.7 in September. This marks the first time the index has been below 100 since 2016. The LEI has looked disjointed, as it conflicts with the economic narratives of other conventional forecasts, including even the Fed's Summary of Economic Projections. While the LEI has been in persistent decline for two and a half years, the economic outlook and prospects for a soft landing have only increased. Indeed, the LEI has remained weak even as GDP has demonstrated broad resilience of the economy
The largest negative contributors once again included the big three consistently negative components. The ISM new orders component, the interest rate spread component and the consumer expectations component have all been negative contributors in each of the last 22 months. A good month for stocks in September made the S&P 500 the largest positive component of the LEI, adding 0.11 percentage points and buoying what would have otherwise been a larger decline in the headline index. The Leading Credit Index and initial jobless claims components were the other meaningful positive contributors, tacking on 0.03 and 0.04 percentage points, respectively.
Crises at Boeing and Intel Are a National Emergency
A generation ago, any list of America’s most admired manufacturers would have had Intel and Boeing near the top. Today, both are on the ropes. Intel has suspended its dividend, slashed jobs and capital spending, and is a takeover target. Boeing has been hobbled by investigations into crashes and a midair mishap, production delays and a strike. A breakup or bankruptcy are no longer unthinkable. The U.S. is in a geopolitical contest with China defined not just by military power but economic and technological prowess. Leaders from both U.S. political parties say they are on the case, pushing for tariffs and subsidies.
Whatever their merits, these measures don’t address the fundamental problem that Boeing and Intel represent. The U.S. still designs the world’s most innovative products but is losing the knack for making them. At the end of 1999, four of the 10 most valuable U.S. companies were manufacturers. Today, none are. The lone rising star: Tesla, which ranked 11th. Intel and Boeing were once the gold standard in manufacturing groundbreaking products to demanding specifications with consistently high quality. Not any longer.
Global Headlines
Middle East
- Israel And Hamas: The Latest News – The Guardian
- Israel Escalates Operations In Northern Gaza - Reuters
- US Investigating Leaked Documents On Israel’s Plans To Attack Iran, Sources Say - CNN
- Israel Killed Sinwar by Forcing Him From the Tunnels - WSJ
- Israel Busts Spy Ring Acting For Iran, Security Services Say - Reuters
- Israel Bombs Hezbollah-Linked Finance Group In Lebanon – France 24
- Sinwar Might Be Gone, But Israel’s Mission Is Far From Over - 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
- NATO's Rutte: North Korea Sending Troops To Ukraine Would Escalate Conflict - Reuters
- After Orbán, EU Eyes New Russia Sanctions Push - Politico
- Ukrainian Paratroopers Hang On In An Eastern Town - Forbes
- Pentagon chief visits Ukraine in show of support ahead of US election - Reuters
- Putin’s Plan To Defeat The Dollar Begin At BRICS Summit In Russia This Week – The Economist
- ‘Monotonous and Filthy’: Paul Whelan’s Life in a Russian Prison - CNN
- 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
- Japan Scrambles Jets To Intercept Chinese Bomber and Spy Plane - Newsweek
- Moldova Votes Yes To Joining EU By Tiny Margin - Politico
- Venezuela Names Former US Prisoner Saab As Industry Minister - Reuters
- Venezuela Arrests Former Oil Minister Tellechea - Reuters
- Vietnam Chooses Luong Cuong As 4th President Since 2023 – Nikkei Asia
- Turkish Cleric, Longtime Erdogan Rival Fethullah Gulen Dies In US Aged 83 – France 24
- Chinese Mercenary Fighting for Russia Says North Koreans Killed in Ukraine - Newsweek
- Cuba Grid Collapses Again Raising Doubts About A Quick Fix- Reuters
Policy and Politics
US Unveils New Rules To Block China, Russia And Iran From Accessing Bulk US Data
The U.S. Justice Department on Monday proposed new rules to protect federal government data or Americans' bulk personal data from getting into the hands of countries like China, Iran and Russia by placing new limits on certain business transactions. The proposal, which was previewed in March, implements an executive order issued earlier this year by President Joe Biden which aims to keep foreign adversaries from using accessible American financial and genomic data and health data for cyber attacks, espionage and blackmail.
In addition to China, Russia and Iran, the rule would also apply to Venezuela, Cuba and North Korea. Washington has been trying to stem the flow of American personal data to China, part of a years-long struggle over trade and technology. Monday's proposal for the first time gave more specific details about the types and amounts of data that cannot be transferred, including human genomic data on over 100 Americans or personal health or financial data on over 10,000 people.
Biden Administration Forgives Another $4.5B In Student Debt For 60,000 Public Service Workers
While his massive SAVE student loan plan remains on hold in the courts – and three weeks before the election, President Biden has marked a new milestone by cancelling another $4.5 billion in additional student loan relief for over 60,000 borrowers across the country who work in public service, the White House announced on Thursday. This relief, which is the result of significant fixes that the Administration has made to the Public Service Loan Forgiveness (PSLF) Program, brings the total loan forgiveness approved by the Administration to over $175 billion for more than 4.8 million Americans, which includes $74 billion for over one million borrowers through PSLF.
The PSLF program supports public servants by forgiving the remaining student loan balance for those who make the required 120 qualifying monthly payments. This relief includes both borrowers who benefitted from the Biden-Harris Administration's limited PSLF waiver, a temporary opportunity that ended in October 2022, as well as from regulatory improvements made to the program during this Administration.
NOAA Releases 2024-25 Winter Weather Outlook: Here’s What To Expect In NY
The National Oceanic and Atmospheric Administration has released its 2024-25 winter outlook, highlighting a “slowly-developing” La Niña that could shape weather throughout the country from December through February. In New York, temperatures are likely to be warmer than normal between December 2024 and February 2025, according to the NOAA predictions. The NOAA estimates there’s a 40-50% chance temperatures will be above average lower in the state, with less certainty up state. Precipitation is projected to be normal, and drought is unlikely.
The Pacific Northwest and Great Lakes regions are more likely to get above-average precipitation this season, meaning states like Michigan, Ohio and Indiana could experience increased rain and snowfall. Meanwhile, drier-than-normal conditions could hit the South and Southwest — including parts of Florida, Georgia, Arizona, and New Mexico. The Southern Plains (Texas, Oklahoma and a small portion of southwestern Kansas) may also see below-average rainfall.
Health and Wellness
Why Workplace Well-Being Programs Don’t Achieve Better Outcomes
Nearly 85% of large U.S. employers offer workplace wellness programs, yet the burnout and mental health needs that they are meant to address have continued to escalate. By 2026 global corporate spending on wellness is set to top $94.6 billion. Despite this substantial investment, anticipated improvements in well-being are not being realized. This mismatch between increased money spent and declining mental health outcomes prompts a crucial question: why aren’t workplace well-being programs achieving better outcomes?
The authors of a Harvard Business Review paper argue — based on a systematic review of recent research in this area — that the lack of impact of well-being programs is explained in part by a focus on the individual employee rather than the systems that affect them. To tackle the challenges employees face, the authors argue that there must be a shift from individual-level interventions (“I-frame”), like well-being apps, AI chatbots, and employee stress management training, to broader systemic interventions (“S-frame”), such as workload management and mental health development training for leaders.
Read more at Harvard Business Review
NYS COVID Update
The Governor updated COVID data for the week ending October 18th.
Deaths:
- Weekly: 31
- Total Reported to CDC: 84,272
Hospitalizations:
- Average Daily Patients in Hospital statewide: 651
- Patients in ICU Beds: 76
7 Day Average Cases per 100K population
- 3.2 positive cases per 100,00 population, Statewide
- 4.1 positive cases per 100,00 population, Mid-Hudson
Useful Websites:
Election 2024
- Harris Outraised Trump By More Than 3-To-1 In September, Filings Show - Forbes
- Trump tops Harris in Nate Silver’s model weeks out from election – The Hill
- Tracking the House’s Most Competitive Races - NYT
- Westchester’s Congressional Contest (NY-16) That’s Distinctly Different – Westchester Business Journal
- Exclusive Poll: Harris And Trump Tied Amid Battle For Latino And Black Voters – USA Today
- Kamala Harris' Path to Pennsylvania Win Could Lie in the Deep Suburbs - Newsweek
- Which Hollywood Stars Are Hitting The Road For Harris? - Reuters
- Candidates Step Up Their Attacks After Trump Erases Harris’s Lead - WSJ
- Real Clear Politics General Election Polls
- Real Clear Politics Electoral Map
- Latest Polls - FiveThirtyEight
Industry News
GE Healthcare Announces Time-Saving AI Tool For Doctors Who Treat Cancer
GE HealthCare on Monday announced a new artificial intelligence application it said will save time for doctors who diagnose and treat cancer. CareIntellect for Oncology, as the tool is called, will help oncologists get up to speed on a patient’s history and disease progression by quickly showing them the data they need, the company said. GE said it wants to spare oncologists the headache of digging through records so they can focus on caring for their patients.
Health-care data is notoriously difficult to analyze, and as much as 97% of the data produced by hospitals goes unused, according to a Deloitte report. That information is stored across numerous vendors and file formats such as images, lab test results, clinical notes and device readings, which can be extremely taxing for doctors to sort through. GE HealthCare is also hoping to integrate its CareIntellect products with some of the other early stage AI initiatives it teased on Monday. The company highlighted five new AI products that it is developing, including a collaborative team of AI agents, a tool to predict an aggressive type of breast cancer recurrence, and a tool to flag suspicious mammography scans to radiologists more quickly.
China Cuts Benchmark Lending Rates By 25 Basis Points
China on Monday lowered its main benchmark lending rates by 25 basis points at the monthly fixing. The one-year loan prime rate (LPR) has been cut to 3.1%, while the five-year LPR has been trimmed to 3.6%, the People’s Bank of China (PBOC) said. The one-year LPR influences corporate loans and most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.
The move was expected. China’s central bank governor Pan Gongsheng had indicated on Friday during a forum held in Beijing that the loan prime benchmark rates would be lowered by 20 to 25 basis points. During the forum, Pan also said that the amount of cash that banks need to have on hand, also known as the reserve requirement ratio or RRR, could be lowered by another 25 to 50 basis points by the end of the year, depending on the liquidity situation.
FTC Investigating John Deere Over ‘Right To Repair’
The U.S. Federal Trade Commission is probing farm equipment maker Deere over the company's repair policies, according to a filing made public on Thursday. The FTC is probing whether Deere violated the Federal Trade Act's section 5, according to the filing. The law prohibits unfair or deceptive practices affecting commerce, and the FTC has recently used it in a broad array of cases, including against Amazon and pharmacy benefit managers.
The investigation, authorized on Sept. 2, 2021, focuses on repair restrictions manufacturers place on hardware or software, often referred to by regulators as impeding customers' "right to repair" the goods they purchase. Deere already faces lawsuits from U.S. farmers over whether its repair policies violate antitrust law. The tractor maker signed a memorandum of understanding with the American Farm Bureau Federation last year that would allow farmers to fix their equipment, or go to a third-party repair shop.
Last Full-Sized Kmart In Continental US Closes As Retail Giant Fades
The time to make final selections at the last full-sized Kmart in the continental United States is nearly up as the once retail giant turned out its signature blue light in New York. The Bridgehampton store, about 95 miles east of Manhattan, closed its doors for the final time Sunday night, leaving only one smaller store with a limited selection in Miami left in operation. The company has other stores in Guam and the U.S. Virgin Islands. Target is slated to replace Kmart at the Bridgehampton Commons location in the Hamptons, according to The Long Island Business Journal.
At its peak, Kmart had well over 2,000 locations in the U.S. and was among the nation's retail giants. Kmart merged with Sears in 2005 in a deal engineered by hedge fund manager and CEO Eddie Lampert. The combined companies fell behind as e-commerce grew and consumer preferences changed. The merged company filed for Chapter 11 bankruptcy protection in 2018 and narrowly escaped liquidation in early 2019. It was sold to Lampert, who has kept the brands alive on a shoestring budget. Combined, Sears and Kmart have closed more than 3,500 stores and cut about 250,000 jobs in the past 15 years.
Cutting Tool Demand Improves, But Faces Uncertainty
New orders for cutting tools improved 9.1% from July to August as manufacturers purchased a total of $209.3 million worth of the critical supplies during the latter month, according to latest Cutting Tool Market Report by the U.S. Cutting Tool Institute and AMT - the Assn. for Manufacturing Technology. While the August figure reverses a three-month trend of falling purchases for cutting tools, the result is -4.5% less than the August 2023 order volume.
“U.S. cutting tool orders have hit significant headwinds as we move into the fourth quarter of 2024,” according to USCTI president Steve Boyer. “We saw drop-offs in orders for two of the last three months of the third quarter of this year compared to last year.” The current year’s total purchases of $1.67 billion represent an improvement of just 1.5% over January-August 2023.
Read more at American Machinist
EV Registrations Surged 18% In July, Boosted By Tesla Cybertruck And New Models
Electric vehicle (EV) registrations surged 18% in July compared to the same month last year, driven by the success of newer models like the Tesla Cybertruck and the Honda Prologue, according to the latest data from S&P Global Mobility. Tesla, the EV market leader, ended a five-month slump with a 1.2% increase in registrations, bolstered by 5,175 deliveries of the highly anticipated Cybertruck launched in November. Other EV pickups combined sold just 5,546 units during the same period.
The surge in registrations reflects the growing appeal of EVs, aided by substantial incentives. For example, according to Motor Intelligence, consumers received $19,703 in discounts on the Kia EV9, $13,015 on the Volkswagen ID.4, and $7,035 on the Honda Prologue. Despite their typically higher retail prices, these factory and government incentives have helped make electric vehicles more competitive with their gasoline and hybrid counterparts.However, analyst Tom Libby of S&P Global Mobility cautioned that the current sales boom heavily relies on these incentives. “At full MSRP, these EV products would not sell. They are being heavily incentivized to compete with internal combustion vehicles, and if these incentives were pulled, sales would drop dramatically,” Libby said.
A Meteor Shower Caused By Halley’s Comet Will Peak Tonight—Here’s How To Watch
One of the “most beautiful” meteor showers this year will peak tonight, according to NASA, giving viewers a chance to see debris from Halley’s comet, which won’t return to the solar system for nearly 50 years. The Orionids meteor shower started in late September and will last until Nov. 22, though the event will reach its peak Monday night and continue through Tuesday morning, according to NASA. Halley’s comet, discovered in 1705, last appeared in the U.S. in 1986 and won’t be seen again until 2061.
Meteors during the Orionids are known for their brightness and speed, according to NASA, as they travel at about 148,000 miles per hour into Earth’s atmosphere while leaving behind glowing “trains,” or incandescent bits of debris that lasts for several seconds or minutes. No telescopes are required to see the Orionids, while NASA recommends finding an area away from light pollution and lying on your back with your feet facing southeast. While looking up, it will take less than 30 minutes for your eyes to adjust before you can start seeing meteors, according to NASA, which suggests looking for “prolonged explosions of light.”
Disney to Name Bob Iger’s Successor in Early 2026
Disney said it would name longtime Chief Executive Bob Iger’s replacement in early 2026 and tapped a new board chairman, signs to investors that the company’s succession process is advancing after past turbulence. The company said former Morgan Stanley CEO James Gorman, who is the chair of its succession committee, would become board chairman on Jan. 2, 2025, replacing Mark Parker, who plans to resign.
Appointing a new CEO is a critical priority for Disney, Gorman said. “This timing reflects the progress the Succession Planning Committee and the Board are making, and will allow ample time for a successful transition before the conclusion of Bob Iger’s contract in December 2026,” he said. Gorman joined Disney’s board earlier this year and was tapped to lead the search for Iger’s successor in August. He is executive chairman of Morgan Stanley and will be stepping down from that role on Dec. 31, 2024. Disney on Monday said that Parker’s resignation will be effective on Jan. 2, 2025 after a nine-year career at Disney. Parker, executive chairman of Nike, was elected chairman of the Disney board in early 2023.
American Productivity Still Leads The World
A common riposte is that American productivity is exaggerated since American workers get much less holiday time than their peers abroad. But when assessed on a per-hour basis the gap remains sizeable: 73% productivity growth for American workers since 1990 versus 39% in the euro area, 55% in Britain and 55% in Japan (see chart). Another criticism is that productivity growth in America has steadily declined over the past couple of decades. That, however, has been true elsewhere as countries have grappled with ageing populations and what had seemed to be a maturing tech landscape. Productivity growth in America remains stronger than in most other economies.
To explain this productivity outperformance, it is useful to break it into a few broad, overlapping categories. The first is investment in capital. American workers, simply put, have more tools at their disposal, both the physical kind such as highways and warehouses and the intangible sort in the form of software. Non-residential investment has run at about 17% of GDP in America since the mid-1990s, consistently higher than the share in large European economies, according to John Fernald of INSEAD, a business school in France. Moreover, much American business investment is the most potent kind: spending on research and development, which sows the seeds for future growth. With the exceptions of Israel and South Korea, America invests more in R&D than any other country, at roughly 3.5% of GDP. China is the one major power that has closed the gap on R&D spending, but it still trails America by a large absolute margin.