Member Briefing September 6, 2022

September 6, 2022

Posted By: Harold King in Daily Briefing,

August Jobs Report: US Adds 315,000 Jobs, 22,000 in Manufacturing

Manufacturing employment trended up in August 2022. According to the latest report from the Bureau of Labor Statistics at the Department of Labor, the U.S. manufacturing sector hired 22,000 more people in August, mostly in the durable goods industries.

The Bureau reported that manufacturing has added 461,000 new jobs so far over the year.
In the overall economy, the unemployment rate rose slightly to 3.7%
Payroll employment increasing by 315,000.
Durable goods industries—notably fabricated metal products, computers and electronics, nonmetallic mineral products and machinery companies—added a total of 19,000 jobs.
Average hourly earnings for manufacturing employees were flat in August at, $30.95 an hour.
The average hourly earnings for all employees rose by 10 cents to $32.36 during August, a monthly increase of 0.3%.

War in Ukraine Headlines

ISM Report: U.S. Manufacturing Growth Remains Tepid Despite Gains in Employment

In its latest report on growth in the manufacturing sector, the Institute for Supply Management indicated that its purchasing managers’ index for manufacturing remained static through August at 52.8%. Growth in the employment and new orders indexes offset a drop in production. The ISM’s index for new orders rose by 3.3 points to 51.3%, turning from contraction to growth, while the production index slipped 3.1 points to just above contraction at 50.4%. Outside of the three primary indicators of manufacturing health, the pace of price increases slowed dramatically, down 7.5 points from July to land at 52.5%. Prices have been on the rise since May 2020.

In a positive turn, several survey respondents reported easing in the interminable supply chain headaches that have plagued manufacturing in the past few years. A transportation equipment executive said the effect of the semiconductor shortage has waned, and a nonmetallic mineral products leader noted “much improvement” in raw material availability.

Global Manufacturing PMI at 26-Month Low With Downturn Set to Deepen

The JPMorgan Global Manufacturing Purchasing Managers’ Index, compiled by S&P Global, fell from 51.1 in July to 50.3 in August, its lowest since June 2020. Output only rose in ten of the 30 economies for which data are available, and in five of those – including mainland China – the gains were only marginal. Output meanwhile fell especially sharply in the UK, where the loss was only exceeded by the declines registered in Taiwan and Poland, as well as in the eurozone.

The survey’s sub-indices point to the production trend deteriorating in the coming months. Most notably, new orders continued to fall at an increased rate in August, and inventory levels continued to rise amid weaker than anticipated sales. Exports losses were recorded during August in the US, Eurozone, UK, Japan and mainland China. Only India, and to a lesser degree Australia, reported any export growth in August. There was encouraging news on the inflation front, however, as weakening demand and improving supply led to a marked cooling of price pressures in the factory sector, with pricing power shifting from sellers to buyers.

US COVID – Cases, Hospitalizations & Deaths Decline, BA4.6 Ascending

The US CDC is reporting 94.3 million cumulative cases of COVID-19 and 1,040,314 deaths. Average daily incidence continues to decline to 88,286 on August 30—the lowest average since May 12. Average daily mortality continues to decline, down to 383 on August 30 from a recent high of 486 on August 12. Both new hospital admissions and current hospitalizations continue to decline, down 2.9% and 6.3%, respectively, over the past week. Both trends peaked around the last week of July, similar to trends in daily incidence.

The BA.5 sublineage is projected to account for 88.7% of sequenced specimens in the US. While BA.5 remains the overwhelmingly dominant Omicron subvariant, its growth has reversed as the prevalence of the BA.4.6 sublineage is increasing. BA.4.6 remains the #2 subvariant nationwide, now accounting for 7.5% of sequenced cases. It remains unclear whether BA.4.6 is capable of usurping BA.5 nationwide, but it appears to be outpacing BA.5 in certain areas, particularly HHS Region 7 (Iowa, Kansas, Missouri, Nebraska), where it accounts for 17.2% of sequenced cases.

NYS COVID Update

The Governor updated COVID data through September 2nd.

Deaths:

Daily: 16
Total Reported to CDC: 73,697

Hospitalizations:

Patients Currently in Hospital statewide: 2,235
Patients Currently in ICU Statewide: 235

7 Day Average Positivity Rate – Cases per 100K population

Statewide 5.78% – 19.96 positive cases per 100,00 population
Mid-Hudson: 4.10% – 18.60 positive cases per 100,00 population

Useful Websites:

CDC Endorses Updated COVID Boosters, Shots Begin

The Centers for Disease Control and Prevention last Thursday endorsed updated COIVD-19 boosters, opening the way for a fall vaccination campaign that could blunt a winter surge if enough Americans roll up their sleeves. The new boosters targeting today’s most common omicron strains should begin arriving in pharmacies and clinics this week. The decision by CDC Director Rochelle Walensky came shortly after the agency’s advisers voted in favor of the recommendation.

The tweaked shots made by Pfizer and rival Moderna offer Americans a chance to get the most up-to-date protection at yet another critical period in the pandemic. They’re combination or “bivalent” shots — half the original vaccine and half protection against the BA.4 and BA.5 omicron versions now causing nearly all COVID-19 infections.

New NAEP Scores Show Drops in Reading and Math

Scores were released last Friday for the National Assessment of Educational Progress (NAEP), which is often called the nation’s report card. This data comes from a special long‐term trend assessment of 9‑year‐old students conducted this past January to March. Peggy Carr, Commissioner of the National Center for Education Statistics (NCES), noted today’s release is “the first nationally representative report comparing student achievement from before the pandemic to now.”

Unfortunately, the predictions about how kids were faring educationally were correct. Average scores fell 5 points in reading and 7 points in mathematics compared to 2020. This is the largest drop in reading since 1990, and the first ever statistically significant decline in mathematics. Looking at students by performance percentiles shows declines at every level; but in both math and reading, scores for lower‐performing students declined more than scores for higher‐performing students.

NFIB Jobs Report: Challenges Continue for Small Business Hiring

Small business owners continue to hire, but 49% (seasonally adjusted) of owners reported job openings they could not fill in the current period.

Small business owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 21% planning to create new jobs in the next three months, up one point from July.
A net 46% (seasonally adjusted) reported raising compensation, down two points from July and four points below the record high set in January.
A net 26% plan to raise compensation in the next three months.
Overall, 63% of owners reported hiring or trying to hire in August.
Of those trying to hire, 89% of owners reported few or no qualified applicants for the positions they were trying to fill.
Thirty-one percent of owners reported few qualified applicants for their open positions and 26% reported none.
Forty-one percent of owners have openings for skilled workers and 24% have openings for unskilled labor.

Survey Examines Inflation Concerns of Job Changers

Eighty percent of US workers are considering the impact of inflation as they make career choices and changes, and another 73% are factoring a possible recession into the decision, according to a report by FlexJobs. Among other findings, 16% of respondents who took a new job during the pandemic said they regretted it due to issues with company culture, supervisors and a lack of respect.

A quarter of workers say they or someone they knew had been laid off since April of this year. Respondents also report believing it would become harder to find remote jobs moving forward, rather than easier, and more respondents are worried about job scams than in previous surveys.

On the Other Hand….Why Americans Keep Quitting Jobs Amid High Inflation

The idea of quitting a job amid a period of increased cost of living and a dubious economic future may seem counterintuitive. But the labor market has remained stacked in favor of workers, who see ample opportunities to boost their earnings to supplant increased costs from inflation.

There were roughly two open jobs for every unemployed American, according to Labor Department data, giving job seekers ample opportunities to find new jobs with better pay or working conditions. And businesses are still scrambling to find enough workers to keep up with consumer spending — which is well above pre-pandemic levels — from a workforce that remains smaller than it was before COVID-19. “Once job seekers know it’s possible to attain a higher wage, their expectations may shift and act as a pull factor in searching for a higher dollar amount,” wrote AnnElizabeth Konkel, an economist at Indeed Hiring Lab, in an analysis.

Liz Truss: A Quick Guide to the UK’s New Prime Minister

Liz Truss will be Britain’s next prime minister after she was elected leader of the ruling Conservative Party on Monday, ending a race to succeed the scandal-tarnished Boris Johnson. She inherits a country facing a dire winter energy crisis, widespread strikes and economic recession — as well as long-term questions about the erosion of its cherished public services and its status as a world power after Brexit. Those issues were largely absent from discussion in the two-month leadership race, which saw her defeat former finance minister Rishi Sunak by 57% to 43% in the final runoff.

Truss, 47, has served as foreign secretary and was the clear front-runner for the job. She clinched victory by appealing to the right-wing party faithful as a tax-cutting, anti-“woke” candidate who would take a hard line on post-Brexit dealings with the European Union.

Learn more about her at the BBC

Amazon Bid to Scrap Historic Union Win Blocked

A hearing officer for a federal labor board has rebuffed Amazon’s attempt to scrap a historic union win at a warehouse on Staten Island, New York, handing victory to organizers in what could be a very long battle for recognition. Shortly after the spring vote, Amazon filed more than two dozen objections with the National Labor Relations Board, claiming it was tainted by organizers and Region 29, the agency’s regional office in Brooklyn that oversaw the election. The case was then transferred to another regional office, based in Phoenix, Arizona, at Amazon’s request.

The 24-day long hearing, which Amazon had unsuccessfully sought to close to the public, was marked by tense exchanges between attorneys for both sides on what documents could be submitted for evidence and which witnesses could testify. The 24-day long hearing, which Amazon had unsuccessfully sought to close to the public, was marked by tense exchanges between attorneys for both sides on what documents could be submitted for evidence and which witnesses could testify.

Extreme California Heat Prompts Governor to Shutter Manufacturers

California Governor Gavin Newsom this week issues a state of emergency as triple-digit temperatures bear down on the state, ordering some manufacturers to cease operations, encouraging electric vehicle drivers to charge at night and allowing ships in harbor to keep their engines on instead of using shore power from the grid. California Independent System Operator is the agency that forecasts much of the state’s power usage, and it predicts that electricity demand will exceed supply starting Monday and only get worse throughout the week.

The California Manufacturers & Technology Association advocacy group is encouraging its members to save power, but it’s also urging the state to solve its energy scarcity issues. Utilities in the Golden State predict electricity shortages through 2025 at least as generation plants shut down and more of the state’s transportation sector shifts from internal combustion engine (ICE) cars to electric vehicles (EVs).

Nuclear Power’s Rebound Causes Rift Among Environmentalists

While many environmental groups and green political parties in the U.S., Canada and Europe have long opposed nuclear power as dirty and risky, a new generation of climate activists—including a branch of Fridays for Future movement, which draws its inspiration from Greta Thunberg—argue that nuclear power can be a valuable low-emission alternative to fossil fuels.

The opposing viewpoints are fueling a contentious divide among environmental groups and within green political parties, an issue that has grown more pronounced in recent months amid the world’s energy crisis.