Member Briefing October 3, 2022

Posted By: Harold King Daily Briefing,

4.9% - Core PCE Inflation Climbed, Consumer Spending Rose in August,

Consumers increased spending in August, the Commerce Department said Friday, as high inflation spread across the economy. The Commerce Department report covers spending on goods and services and includes an update on U.S. inflation, which is holding close to the highest level in four decades. The personal consumption expenditures (PCE) price index rose 0.3% last month after dipping 0.1% in July. In the 12 months through August, the PCE price index increased 6.2% after advancing 6.4% in July.

Excluding the volatile food and energy components, the PCE price index jumped 0.6% after being unchanged in July. The so-called core PCE price index climbed 4.9% on a year-on-year basis in August after increasing 4.7% in July. The Fed tracks the PCE price indexes for its 2% inflation target. Other inflation measures are running much higher. The consumer price index increased 8.3% year-on-year in August.

Read more at The WSJ

War in Ukraine Headlines

Supply Chain Effects from Hurricane Ian Could Linger for Weeks

Hurricane Ian devastated Florida’s state’s southwest coast last week. But the economic ripple effects are likely to be felt well beyond the storm zone. Experts are predicting severe disruption to supply chains from flooding, power outages and wind damage that could stall factory and farm production, as well as freight movement through major port, airport, highway and rail nodes. The Tampa-to-Orlando corridor is chockablock full of huge retail and e-commerce distribution centers.

The storm could impact up to 2,800 manufacturing firms in aerospace, automotive components, heavy machinery, chemicals and plastics, as well as about 7,000 health care producers in pharmaceuticals, medical devices, diagnostics and other fields, Everstream Analytics, which uses predictive software to help customers like Apple and Schneider Electric manage supply chain risk, said in a weather update Tuesday.

Read more at American Shipper

Spending Bill that Averts Government Shutdown Signed into Law

President Biden has signed an interim funding bill to tide federal agencies over until mid-December. The House passed the measure Friday by a vote of 230-201, with ten Republicans joining all Democrats in voting to keep the government open. The Senate had approved it on Thursday. Government spending power would have ended and required a shutdown on Saturday morning.

The continuing resolution maintains current levels of spending and extends funding through Dec. 16, giving both chambers extra time to hammer out details for a broader budget deal. It includes $2.5 billion to aid communities devastated by natural disasters, $1 billion in funding a low-income home heating program, and $20 million in emergency to address the water crisis in Jackson, Miss. The bill also includes $12 billion in aid for Ukraine.

Read more at NPR

US COVID – States Spend Federal COVID Aid on Roads, Buildings, Seawalls

Relatively little of the federal aid has gone toward traditional public health purposes, according to an Associated Press review of reports filed by all 50 states and the District of Columbia. Significantly more has gone toward public infrastructure. States are pouring money into water, sewer and high-speed internet projects, as specifically envisioned by the law. But the AP found that they’re also spending billions of dollars on roads, bridges, sidewalks, airports, rail lines and buildings at college campuses and government agencies — justifying all of it under the federal government’s generous flexibility.

All states recently were required to file annual reports with the Treasury Department detailing their progress under the American Rescue Plan. The documents show states have planned expenditures for about three-fourths of their funds.

Read more at the AP


The Governor updated COVID data through September 23rd.


  • Daily: 19
  • Total Reported to CDC: 74,258


  • Patients Currently in Hospital statewide: 2,306
  • Patients Currently in ICU Statewide: 237

7 Day Average Positivity Rate - Cases per 100K population

  • Statewide 5.78%    -   21.51 positive cases per 100,00 population
  • Mid-Hudson: 6.77%   -   22.09 positive cases per 100,00 population

Useful Websites:

Americans Worried Midterms Could Bring Gridlock, and Worried They Won’t:

With less than six weeks until the 2022 midterm elections, a new Axios/Ipsos poll finds that a slim majority of Americans are worried about divided government and split control of Congress after November. Just under half are concerned about Democrats keeping control of Congress or Republicans winning control of both chambers. The poll was conducted between September 23 – 26, 2022. For this survey, a sample of 1,004 adults age 18+. The sample includes 356 Republicans, 449 Democrats, and 126 independents.

Regardless of the outcome, there is one clear concern among those worried the Democrats will maintain both the Senate and House of Representatives: the economy will get worse. On the other side, those worried that Republicans will win control of both chambers of Congress cite a number of possible concerns, rather than just one issue, including: a worsening economy, gridlock, and that Republicans will shift too much of the focus to divisive social issues.

Read more at Ipsos

Judge: NY Assembly Maps to be Redrawn by Dysfunctional Redistricting Commission

A state Supreme Court judge has ruled that the dysfunctional Independent Redistricting Commission must get the band back together to submit new Assembly lines by April 2023 that will be in place for the 2024 cycle. In a way, the state is right back where it started. The problems with this year’s redistricting process go back to the 2010 cycle, and the 2014 constitutional amendment that created what was meant to be a bipartisan commission to take the politics out of redistricting.

But as good government advocates have pointed out for years, the commission – evenly split between Democrats and Republicans – was doomed to fail, and lawmakers had written the amendment poorly. Commission Chair David Imamura, a Democrat, welcomed the news. “I have every hope that we will, that all 10 of us will reach an agreement, and we’ll be able to put out a single set of lines,”

Read more at City& State

Half of Adults Have Heard Little or Nothing About New Covid Boosters, Survey Finds

Just over half of adults surveyed nationally say they've heard little or nothing about the first updated COVID-19 booster shot, and only about a third have either already gotten the extra vaccine dose or are planning to roll up their sleeves anytime soon.

The Kaiser Family Foundation described the latest findings from its ongoing KFF COVID-19 Vaccine Monitor Poll as suggesting there's only a "relatively modest" awareness of the booster dose now targeted at the omicron subvariants, including BA.5, currently circulating in addition to the original virus. according to the KFF poll, only 17% of adults had read or heard "a lot" about the new shots, while 33%, said they'd heard "some," 31%, "a little" and 20%, "nothing at all." Just under half of the respondents who've already been vaccinated knew they could also get the updated shot.

Read more KSL

Recession Watch: Economic Outlook ‘Darkening’ As Experts Worry Fed Could 'Break' Markets

The Federal Reserve's favorite inflation metric came in hotter than expected just one day after officials doubled down on their attempts to cool inflation by slowing down the economy—making more experts warn it will inevitably take a recession to temper rising prices. On Friday, the Dow Jones Industrial Average closed out its worst month since the Covid crash of March 2020. The index has plummeted 21% this year, while the S&P 500 and tech-heavy Nasdaq have collapsed nearly 25% and 33%. In a note this week, Morgan Stanley analyst Michael Wilson said the firm remains “convinced” that the S&P will hit an eventual low of between 3,000 and 3,400 points later this year or early next, suggesting it could still plunge another 6% to 17%.

"It's not a matter of if we'll have a recession, but what type of recession it will be," says Sean Sun, portfolio manager at Thornburg Investment Management, noting that strong jobless claims data on Thursday effectively justified the Fed's aggressiveness and its stance that inflation is not yet abating quickly enough. Sun expects markets will become "even more dysfunctional" and could "potentially break" as central banks continue to drain liquidity from the economy, and he warns many companies have yet to revise their earnings outlooks to account for slower economic growth—a development that could further tank stocks.

Read more at Forbes

Eurozone Inflation Hits Record 10% Amid Energy Crunch

The European Union’s statistics agency on Friday said consumer prices across the eurozone were 10% higher than a year earlier, the highest inflation rate since records began in 1997, two years before the launch of the common currency. Records for individual countries go further back—Germany’s statistics agency on Thursday said the country’s September inflation rate was the highest since late 1951.

The acceleration in the rate at which consumer prices are rising is likely to prompt the European Central Bank to raise its key interest rate again next month and will lead to further falls in household spending power that threaten to push the currency area’s economy into contraction.

Read more at the WSJ

Why Are Companies Still Hiring When GDP Is Shrinking?

Gross domestic product growth slipped into negative territory in the first half of the year. Borrowing costs have risen steeply as the Federal Reserve boosts interest rates in an attempt to reduce inflation. Even so, monthly payrolls have grown an average of 438,000 from January through August, nearly three times their 2019 prepandemic pace. Many employers say they continue to struggle with large staffing shortages that built up during the pandemic and are reluctant to cut head count. In many cases, they are still hiring.

Some economists say the scars of the past year’s shortages—including the huge expenses of hiring and recruiting, combined with high employee turnover—could leave companies more hesitant to lay off workers if the economy falls into a mild recession. They contend that companies never fully met their hiring needs during the recovery and that businesses will likely pull openings, which are at historic highs, before they resort to cutting jobs.

Read more at The WSJ

Weekly Jobless Claims Hit 5-Month Low

The number of Americans filing new claims for unemployment benefits fell to a five-month low last week as the labor market remains resilient despite rising headwinds from the Federal Reserve's stiff interest rate increases and slowing demand.

Initial claims for state unemployment benefits decreased 16,000 to a seasonally adjusted 193,000 for the week ended Sept. 24, the lowest level since April. Data for the prior week was revised to show 4,000 fewer applications filed than previously reported. Economists polled by Reuters had forecast 215,000 applications for the latest week. Continuing claims dropped by 65,000 between the August and September survey periods. The unemployment rate rose to 3.7% in August from 3.5% in July.

Read more at the WSJ

U.K. Government Abandons Plan to Cut Rate of Income Tax for Top Earners

U.K. Chancellor of the Exchequer Kwasi Kwarteng on Monday ditched a plan to cut the 45% top rate of income tax, scrapping a key economic policy after turmoil in the country’s financial markets, an intervention by the Bank of England and the threat of large scale rebellion by Conservative Party lawmakers.

The U-turn is a major setback for new Prime Minister Liz Truss, who based her nascent leadership on a sweeping revamp of the British economy. The government, which defended the measure announced late last month as recently as Sunday, eventually buckled under the pressure of international investors who balked at the scale of unfunded tax cuts and Conservative Party lawmakers shocked by polls showing they faced a near total wipe out at the next general election.

Read more at the WSJ

Hurricane Ian Leaves Devastation in its Wake

At least 73 people were killed by Ian in Florida as it swallowed homes in its furious rushing waters, obliterated roadways and ripped down powerlines. Four people were also killed in storm-related incidents in North Carolina, officials say. Nearly 900,000 customers in Florida still did not have power as of early Sunday morning, according to More than 30,000 remained without power in North Carolina.

The White House announced late Saturday that President Joe Biden and first lady Jill Biden will visit Puerto Rico on Monday and Florida on Wednesday. In an indication of how severe the storm was requested aid from the United States. No exact amount was requested, and the U.S. was still trying to determine whether the government in Havana would supplement the request as it works to determine the extent of the damage, according to the email communications.

Read more at NBC News

New York Moves to Ban New Gas Vehicles by 2035

New York advanced a plan last week to require that all new vehicles sold in the state by 2035 be zero emissions, state Governor Kathy Hochul said. After signing legislation last year, Hochul announced officials were putting their "foot down on the accelerator" after having been required due to a federal law to wait for California to pass its own legislation.

Hochul directed New York authorities to move on regulatory steps to ensure all new passenger cars, pickup trucks and SUVs sold in the state are zero emissions by 2035. The directive sets interim targets of 35% of sales by 2026 and 68 percent by 2030. "We actually have benchmarks to achieve to show we're on the path to get there," Hochul said in a speech in the city of White Plains. To offset costs of EVs, Hochul announced further funding for a rebate program for purchasers and touted advances in the state's charging infrastructure.

Read more IndustryWeek

There's Plenty of Competition for New York's First Retail Pot Licenses

The state received more than six applications for every license it will hand out in the first round of licensing. That's 903 applicants in all for the 150 Conditional Adult-Use Retail Dispensary licenses it plans to issue. But the field will only get more crowded and more competitive as time goes on.

More licenses will continue to open up and, eventually, operators from outside New York State will enter the market – sometimes huge conglomerates with deep experience and even deeper pockets. It leaves local mom-and-pop operators excited but anxious about what is to come.

Read more at The Buffalo News