Member Briefing March 30, 2023
US Goods Trade Deficit Widens in February As Exports Decline
The U.S. trade deficit in goods widened modestly in February as exports declined, potentially setting up trade to be a small drag on economic growth in the first quarter. The trade deficit increased 0.6% to $91.6 billion, the Commerce Department said on Tuesday. Economists polled by Reuters had forecast the goods trade deficit would be little changed at $91.0 billion.
Goods exports dropped 3.8% to $167.8 billion last month. The decline was led by an 11.9% plunge in shipments of motor vehicles and parts. Exports of consumer goods decreased 4.6%, while industrial supplies, which include petroleum, fell 4.2%. Imports of goods slipped 2.3% to $259.5 billion. Imports of motor vehicles and parts tumbled 7.1%, while those of consumer goods dropped 5.6%. There were also decreases in imports of food and industrial supplies. But imports of capital goods as well as other goods increase
War in Ukraine Headlines
- Ukraine and Russia: The Latest News – The Guardian
- Ukraine Hits Russian-Held City Deep Behind Front as Talk of Counteroffensive Grows - Reuters
- Zelenskyy: Any Russian Victory in Bakhmut Could be Perilous - AP
- Zelensky invites China’s Xi to Visit Ukraine – The Hill
- Putin’s Plan for a New Russian Empire Includes Both Ukraine and Belarus – Atlantic Council
- Mercenary Boss Says Fighting in Bakhmut is Battering Both Sides - CNBC
- Russia’s Economy Is Starting to Come Undone - WSJ
- 22-Year-Old Boxing Champion Maksym Galinichev Dies While Defending Ukraine – People
- What's Behind India's Strategic Neutrality on Russia's Invasion of Ukraine - ABC
- Ukraine Condemns IOC Recommendations on Russian, Belarusian Athletes - Reuters
- 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
McCarthy Sends Letter to Biden Urging More Robust Negotiations on the Debt Ceiling
House Speaker Kevin McCarthy urged the White House in a letter sent Tuesday to start more robust negotiations over raising the nation’s borrowing limit, the first major action in weeks on either side of the debt ceiling issue. McCarthy writes “with each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out of control government spending.”
McCarthy also proposed a series of places to start saving money including reclaiming unspent Covid-19 relief funds and strengthening work requirements for social programs. McCarthy, shortly after the letter went out, criticized Biden for refusing to sit down with him. “I’m concerned more than I’ve ever been about getting this debt ceiling done,” the California Republican said on CNBC, due to the lack of conversations and negotiations.
Supply Shortages Threaten U.S. Infrastructure and War Efforts
Manufacturers of everything from pickup trucks to homes are still grappling with tight supplies of microchips and cement - shortages that could translate into delays and higher costs for federal efforts to arm Ukraine against Russian aggression and rebuild U.S. crumbling infrastructure and manufacturing. The supply chain woes that sent costs soaring and spurred shortages of everything from toilet paper to passenger cars are easing for retail-focused industries, but remain stubbornly persistent in important growth sectors like autos, machinery, defense and non-residential construction, experts said.
Companies that make war weapons like shoulder-fired Javelin and Stinger missiles are awaiting U.S. funding before starting new production for Ukraine. When the defense industry gets that greenlight, their scramble to source semiconductors and other hard-to-find electronic components could usher in a new wave of supply chain snarls that disrupt production and drive up costs.
COVID News – WHO Experts Revise Covid-19 Vaccine Advice, Say Healthy Kids and Teens Low Risk
The World Health Organization’s vaccine experts have revised their global Covid-19 vaccination recommendations, and healthy kids and teenagers considered low priority may not need to get a shot. The updated roadmap is designed to prioritize Covid-19 vaccines for those at greatest risk of death and severe disease, according to the World Health Organization’s Strategic Advisory Group of Experts on Immunization (SAGE).
The new streamlined recommendations focus on high-, medium- and low-risk groups. SAGE recommends additional booster doses of Covid-19 vaccine for high-priority groups such as older people, immunocompromised people of all ages, front-line health workers and pregnant people six or 12 months after their last booster dose. For those at medium risk, the group recommends primary vaccinations and first booster doses but does not recommend routine additional boosters. This group includes children and adolescents with health risks and healthy adults under the age of about 60.
Coalition Urges White House Intervention in Port Talks
A coalition of shippers and transportation interests including the NAM is urging the White House to intervene in the nearly year-long West Coast labor negotiations, according to S&P Journal of Commerce (subscription). The appeal to President Biden follows recent reports of growing tensions in the 10-month-long discussions between the International Longshore and Warehouse Union and the Pacific Maritime Association. The two are meant to be hammering out the details of a multiyear work contract.
Earlier this month, dockworkers stopped staggering shifts during meal times. The PMA said that this forced terminals to shut down for two hours each day, leading to cargo-operations delays and truck backups. West Coast ports have lost cargo to the East and Gulf coasts as shippers try to avoid disruption caused by the labor uncertainty. Data from PIERS, a sister product of the Journal of Commerce within S&P Global, shows that the share of Asian imports landing on the West Coast in February slipped to 53.2 percent, down from 54.5 percent in January and 60.4 percent last May when ILWU-PMA contract talks began.
Bruising Budget Battle in New York Deepens Democratic Divide
Each day in recent weeks, the sounds of rallies and protests by activists and Democratic lawmakers have filled the cavernous granite and concrete halls of the New York State Capitol — most of the noise aimed at halting Gov. Kathy Hochul’s agenda. Progressives are demanding the first-term governor expand immigration rights, increase the minimum wage, tax the rich and drop a proposal to toughen controversial bail laws. Suburban, moderate lawmakers want her to revamp a sweeping, first-in-the-nation plan that would require municipalities to build more housing.
Hochul still has the power to shape budget negotiations in coming days and weeks since she holds the purse strings ahead of the April 1 start of the fiscal year. New York lawmakers typically wrap most major legislative proposals into the state budget each year, so winning support for her agenda will be her highest priority as discussions wrap, likely in April if a deal isn’t reached in the next few days.
American IQs rose 30 points in the last century. Now, they may be falling.
A new study of human intelligence posits a narrative that may surprise the general public: American IQs rose dramatically over the past century, and now they seem to be falling. Cognitive abilities declined between 2006 and 2018 across three of four broad domains of intelligence, the study found. Researchers tracked falling scores in logic, vocabulary, visual and mathematical problem-solving and analogies, the latter category familiar to anyone who took the old SAT.
In the 12-year span, IQ scores dipped up to 2 points in the three areas of declining performance. Scores declined across age groups, education levels and genders, with the steepest drops among younger and less-educated test-takers. IQ scores rose in just one area, spatial reasoning — a set of problems that measure the mind’s ability to analyze three-dimensional objects. The study, authored by researchers at Northwestern University and the University of Oregon, appears in the May-June issue of the journal Intelligence.
What Employers Need to Understand About Trust in Today’s Changing Workforce Landscape
In recent years, this idea of a so-called talent crisis—driven largely by the notions of the Great Resignation and Quiet Quitting—has forced companies to take a hard look at how they manage their labor force. Talent shortages, the prevalence of remote work and the rise of the gig economy have all shifted the power between employees and employers, such that employees feel more empowered to shape when and how they work. In turn, companies have had to find ways to strike a balance between their needs and the needs of employees to attract and retain talent.
But, consider for a moment, that the crisis isn’t really one of talent. Rather, it’s one of leadership. We’re also seeing fragility in the relationship between leaders and employees, especially with regards to trust. All of this is unfolding as we seek out a consensus on what the new normal should look like.
Businesses Benefit from AI-infused Industry 4.0 Practices
One major difference between the initial stages of the Fourth Industrial Revolution, also called Industry 4.0, and its current state is AI. Businesses use AI to sift through massive amounts of information, provide customers with better experiences and enable more efficient operations. "We've moved from information and electronics to digitizing the world around us. Now we're starting to see the digitization of the physical world and the optimization of the digital world," said Scott Likens, emerging technology leader of the U.S., China and Japan at international professional services company PwC.
Implementing these nascent technologies at scale may seem daunting, but benefits like process optimization and increased innovation can outweigh the risks. The digitization of everything enables companies to become nimbler, adapting to changing circumstances faster and with greater accuracy.
- Read more at TechTarget
- View the Council of Industry/Clarkson University Foundations of Digital Technology Course
How 3D Printing Could Revolutionize Auto Manufacturing
In an industrial office park south of Los Angeles, an American automaker is churning out sports cars in an attempt to transform manufacturing as we know it. “It’s literally like saying in the typewriter era, ‘I’m about to create a desktop system,’” said Kevin Czinger, founder and CEO of Czinger Vehicles and Divergent Technologies. Czinger’s system is making cars and car parts. They’re designed using artificial intelligence, constructed with specialized 3D printers and assembled by a team of robots.
“What I’m trying to do is create a machine that takes manufacturing, which is still stuck in 100-year-old-plus technologies, into the digital age,” Czinger told Marketplace’s Kai Ryssdal on a tour of his companies’ production facility in Torrance, California. “3D printing is one piece of an overall system.”
Home Prices Fell in January for Seventh Straight Month
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, fell 0.2% in January compared with December on a seasonally adjusted basis. Prices have fallen for seven straight months, the longest streak of declines since 2012.On a year-over-year basis, the index rose 3.8% in January, down from a 5.6% annual rate the prior month. The annual increase was the smallest since December 2019.
The rise in mortgage rates in the past year has limited home sales and slowed home-price growth. Rates rose above 7% in October and November and have fluctuated so far this year. The average rate for a 30-year fixed mortgage was 6.42% in the week ended March 23, up from 4.42% a year earlier, according to Freddie Mac. Prices are declining fastest in Western markets, such as Seattle, where prices fell a seasonally adjusted 1.5% in January from the prior month, and Las Vegas, where prices fell 1.1%.
Sanders Grills Former Starbucks CEO on 'Vicious' Anti-Union Efforts
Former Starbucks CEO Howard Schultz on Wednesday faced a volley of tough questions from Sen. Bernie Sanders about the coffee chain’s alleged union busting. Sanders, a pro-union independent representing Vermont, has been putting pressure on Starbucks for more than a year to recognize the union and negotiate contracts with unionized cafes. He chairs the Senate’s Health, Education, Labor and Pensions Committee, which conducted the panel.
Nearly 300 Starbucks cafes have voted to unionize under Starbucks Workers United, according to data from the National Labor Relations Board. During the hearing on Wednesday, Sanders said that the coffee chain has engaged in the “most aggressive and illegal union-busting campaign in the modern history of our country.” He also accused the company of stalling on collective bargaining agreements, betting that workers will give up and leave the coffee chain. None of the unionized stores have agreed on a contract yet with Starbucks.
Route 17 Expansion: Schumer’s Highway to the Catskills Angers Environmentalists
The revival of the old Borscht Belt in recent years has come with increased traffic down the two-lane state highway — an issue that’s irked Senate Majority Leader Chuck Schumer, who began a push over a decade ago to expand a nearly 50-mile stretch of Route 17. Now, the project has new momentum under Gov. Kathy Hochul, one of many such proposals to benefit from the $1 trillion federal infrastructure package Congress approved in 2021.
But supporters aren’t celebrating yet. First, the project must overcome opposition from local and national environmental groups who say the addition of a third lane in both directions will increase the number of gas-guzzling vehicles zipping through the forested region. In addition to the tension around the Route 17 expansion, New York City officials are facing pushback to a proposal to re-widen a portion of the Brooklyn-Queens Expressway.
SVB’s Collapse Sends California Wineries Into a State of Uncertainty
While best known for specializing in tech and biotech, Silicon Valley Bank had its hand in another big California sector: high-end wine. The bank’s collapse came as a shock to winemakers like Adam Lee, founder of Clarice Wine Company based in Sonoma County. When he saw SVB was looking for a buyer, he got nervous.
Silicon Valley Bank was one of the primary banks for California’s wine industry. The bank’s wine division started up in the early ’90s and, since then, has loaned out more than $4 billion to the industry. Until its recent collapse, it had more than 400 winery accounts, according to SVB’s wine division founder Rob McMillan. Lately, McMillan said he’s been getting a lot of phone calls from concerned clients. “Some couldn’t make payroll, the apps didn’t work, loans couldn’t be made,” he said. “It’s clearly frustrating, and I don’t blame them for being angry.”