Member Briefing September 19, 2022
Empire State Manufacturing Survey: Holding Steady
Manufacturing activity held steady in New York State on the heels of a sharp decline last month. The general business conditions index climbed thirty points to -1.5.
- The new orders index climbed thirty-three points to 3.7, indicating a slight increase in orders.
- The shipments index surged forty-four points to 19.6, pointing to a rebound in shipments.
- The unfilled orders index came in at -7.5, falling for a fourth consecutive month.
- The delivery times index hovered near zero for a second consecutive month.
- The inventories index edged up to 9.4, a sign that inventories increased modestly.
- The index for number of employees was little changed at 9.7, pointing to a modest increase in employment levels,
- The average workweek index climbed to around zero, indicating no change in hours worked.
- The prices paid index fell sixteen points to 39.6; falling cumulative thirty-nine points over the past three months.
- The prices received index fell nine points to 23.6, its lowest level since early 2021.
Looking ahead delivery times are expected to shorten. The index for future business conditions rose six points to 8.2, suggesting little optimism about the six-month outlook. The index for future new orders remained depressed, though employment is expected to pick up. Moderate increases in capital and technology spending are planned for the months ahead.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – The Guardian
- Calls for War-Crimes Tribunal Grow Over Russia’s Actions in Izyum – Politico
- Putin’s Energy War With Europe Seems to Falter – WSJ
- Vladimir Putin’s War is Failing. The West Should Help it Fail Faster – The Economist
- In Russian Border City, Pro-Kremlin Ukrainians, Soldiers Regroup After Retreat From Ukraine – WSJ
- Russia Turns to Recruiting Trucks, Big Wages to Woo Volunteer Soldiers – Reuters
- Germany Takes Control of Oil Refineries Owned by Russia’s Rosneft – WSJ
- Biden Warns Putin Not to ‘Change the Face of War’ by Using Nuclear or Chemical Weapons – The Hill
- Where Next for Ukraine’s Army? – The Economist
- Queen of Soviet Pop Assails Putin’s War in Ukraine – Reuters
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
US Manufacturing Output Increases for a Second-Straight Month
US factory production rose slightly in August as resilient business investment more than offset a pullback in the output of consumer goods, consistent with steady manufacturing activity. The 0.1% increase in manufacturing output last month followed an auto-fueled 0.6% July increase, Federal Reserve data showed Thursday. Including mining and utilities, total industrial production fell 0.2% in August.
Production at auto plants dropped 1.4% last month. Auto production surged 3.2% in July, in part boosted by seasonal factors, which were not repeated in August. Excluding motor vehicles, manufacturing gained 0.2%. Output of durable goods was unchanged. Gains of at least 1.0% were recorded by makers of machinery, computer and electronic products as well as aerospace and miscellaneous transportation equipment. They were, however, offset by losses of more than 1% reported by producers of wood and furniture products.
New Look for CouncilofIndustry.org
The Council of Industry’s website – councilofindustry.org has undergone some improvements. The fresh look – developed by Poughkeepsie’s Ashworth Creative, provides for more streamlined access to Council of Industry programs and services and information about manufacturing in the Hudson Valley. The site makes it easy for job seekers to find our career page, for educators to find our pathways information and for members to access their benefits, register for training and events and mange their profiles and directory listings.
It’s a soft launch – so its not perfect yet and some pages are still under development – but we encourage you to visit the site and take a look around.
US COVID – Scientists Debate How Lethal COVID is. Some Say it’s Now Less Risky than Flu
Has COVID-19 become no more dangerous than the flu for most people? Early in the pandemic, COVID was estimated to be 10 times more lethal than the flu, fueling many people’s fears. “We have all been questioning, ‘When does COVID look like influenza?”’ says Dr. Monica Gandhi, an infectious disease specialist at the University of California, San Francisco. “And, I would say, ‘Yes, we are there.'” Gandhi and other researchers argue that most people today have enough immunity — gained from vaccination, infection or both — to protect them against getting seriously ill from COVID.
“I’m sorry — I just disagree,” says Dr. Anthony Fauci, the White House’s medical adviser, and director of the National Institute of Allergy and Infectious Diseases. “The severity of one compared to the other is really quite stark. And the potential to kill of one versus the other is really quite stark.”
NYS COVID Update
The Governor updated COVID data through September 16th.
- Daily: 15
- Total Reported to CDC: 73,978
- Patients Currently in Hospital statewide: 2,063
- Patients Currently in ICU Statewide: 217
7 Day Average Positivity Rate – Cases per 100K population
- Statewide 6.72% – 20.42 positive cases per 100,00 population
- Mid-Hudson: 6.14% – 20.93 positive cases per 100,00 population
All of Puerto Rico is Without Electricity as Hurricane Fiona Moves In
The entire island of Puerto Rico was without power on Sunday afternoon as an intensifying hurricane neared. The Category 1 hurricane known as Fiona is poised to produce dangerous landslides and heavy flooding in an already storm-battered island. More than 1,400,000 customers have lost electricity due to a transmission grid failure from the current hurricane, according to utility companies’ reports tracked by PowerOutage.US.
As of Sunday afternoon, the storm was centered 25 miles southwest of Ponce, a city on Puerto Rico’s southern coast, according to the National Hurricane Center. It had maximum sustained winds of 85 mph and was moving west-northwest at 8 mph. Fiona is expected to trigger 12 to 16 inches of rainfall in Puerto Rico but up to 25 inches across the island’s eastern and southern regions.
Deal Averting Railroad Strike has Potential to Fall Apart
the White House-brokered agreement to avert a railroad strike has the potential to fall apart, threatening widespread economic disruption right before the midterm elections. Rail workers are set to vote on the tentative deal reached between unions and railroads Thursday morning. If any of the 12 rail unions fail to ratify a new contract, nearly 125,000 rail workers could be headed for a strike.
The agreement would mandate two-person crews, cap health care costs and allow workers to take time off for medical appointments or other scheduled events without being penalized, all key concessions won by unions. The deal also provides 24 percent raises over five years, back pay and cash bonuses, similar terms to those offered by the White House-appointed presidential emergency board (PEB) last month. But nearly 36 hours after the agreement was announced, rail workers said they still didn’t have concrete details on sick leave and voluntarily assigned days off. That’s raised some doubts about just how strong the new contract language is.
Mortgage Rates Top 6% for the First Time Since the 2008 Financial Crisis
The average rate on a 30-year fixed mortgage climbed to 6.02% this week, up from 5.89% last week and 2.86% a year ago, according to a survey of lenders released Thursday by mortgage giant Freddie Mac. The last time rates were this high was in the heart of the financial crisis almost 14 years ago, when the U.S. was deep in recession.
The jump in mortgage rates is one of the most pronounced effects of the Federal Reserve’s campaign to curb inflation by lifting the cost of borrowing for consumers and businesses. Already, it has ushered in a sea change in the housing market by adding hundreds of dollars or more to the monthly cost of a potential buyer’s mortgage payment, slowing what was a red-hot market not so long ago. Higher rates are forcing some would-be buyers to continue renting. Other buyers are skimping elsewhere to make their mortgage payments.
Hundreds of Bills From Last Session Still Await Kathy Hochul’s Signature. Here Are Some of the Major Ones
While state lawmakers continue their break from the state Capitol, there are about 450 bills that have passed both chambers and are awaiting review by the governor as of Sept. 9. Those include ones that would establish a moratorium on cryptocurrency mining and require insurance coverage for prescription drugs to prevent HIV.
The governor has 10 days (minus Sunday) to sign or veto a bill once it’s sent to her desk. If the bills are never sent to the governor’s desk, they will expire at the start of the 2023 Legislative session in January. Hochul also has the authority to request bills get sent to her before the start of the next session. There are many reasons why the governor may hold off on requesting controversial bills for a while, including the upcoming general election in November. Here is a breakdown of what some of the remaining outstanding bills would do.
More Workers Head to Picket Lines Amid Higher Inflation and a Tight Job Market
There were 180 strikes involving roughly 78,000 workers in the first six months of this year, up from 102 involving 26,500 workers in the same period a year earlier, according to a strike tracker created by researchers at the Cornell University School of Industrial and Labor Relations.
More unions and employers are also entering into tough contract deliberations, with the potential for strikes looming. Workers’ demands include higher pay to account for inflation as well as better conditions, reflecting how the pandemic has reshaped jobs and many people’s attitudes about their work.
OSHA Strengthens Severe Violator Enforcement Program
OSHA announced on Sept. 15 that it will both strengthen enforcement and improve compliance with workplace safety standards in an effort to reduce worker injuries and illnesses. It will do this by, expanding the criteria for placement in the Occupational Safety and Health Administration’s Severe Violator Enforcement Program.
The new criteria include violations of all hazards and OSHA standards and will continue to focus on repeat offenders in all industries. Previously, an employer could be in the program for failing to meet a limited number of standards. The changes will broaden the program’s scope with the possibility that additional industries will fall within its parameters.
Steel Makers Warn on Demand Trends
The leaders of Nucor Corp. and U.S. Steel Corp. have this week nudged down investors’ expectations of their third-quarter results, saying that their production volumes have retreated from their levels of earlier this year. In a short statement Sept. 14, Charlotte-based Nucor said earnings from its steel mills segment—which contributed 84% of the company’s first-half pre-tax profits—are forecast to be “considerably lower” in the third quarter versus the three months ended June 30. The company said the main culprits are shrinking margins and lower volumes, “particularly at [its] sheet and plate mills.”
U.S. Steel CEO David Burritt delivered similar, albeit less severe, news on the morning Sept. 15. The Pittsburgh-based company expects adjusted EBITDA for Q3 to come in around $825 million (versus more than $1.6 billion in Q2) and that adjusted net EPS will be $1.90 to $1.95. Analysts’ consensus estimate is around $2.10 per share. Burritt said U.S. Steel’s businesses have faced “market headwinds that have accelerated over the quarter” in several of its end markets.
FedEx CEO says he expects the economy to enter a ‘worldwide recession’
FedEx CEO Raj Subramaniam told CNBC’s Jim Cramer on Thursday that he believes a recession is impending for the global economy. “I think so. But you know, these numbers, they don’t portend very well,” Subramaniam said in response to Cramer’s question of whether the economy is “going into a worldwide recession.”
The chief executive, who assumed the position earlier this year, said that weakening global shipment volumes drove FedEx’s disappointing results. While the company anticipated demand to increase after factories shuttered in China due to Covid opened back up, it actually fell, he said.
Former State Senator Jen Metzger to be Next Ulster County Executive
Jen Metzger was selected on Saturday to serve as the new Ulster County executive following Pat Ryan’s election to the United States House of Representatives during a special election last month. Metzger was a one-term state senator. The Ulster County Democratic Committee gathered at Kingston City Hall for a nominating convention to choose either Ulster County Comptroller March Gallagher, Metzger, a former New York state senator, and Mark Ryder, a deputy county executive.
The convention was open to members of the Ulster County Democratic Committee and the public was invited to observe. Following a vote to elect, county Democratic committee members, local committee members, from the city and towns, voted to elect Metzger to serve out the remainder of Ryan term through Dec. 31, 2023. There was no Republican candidate seeking the post.