Member Briefing March 31, 2022

March 31, 2022

Posted By: Harold King in Daily Briefing,

In Manufacturing, “Great Resignation” Really a “Great Retirement”

In keeping with the latest jobs numbers, a recent Manufacturing Institute survey has found that for the industry, “The Great Resignation” is really more of a “Great Retirement.” There were 808,000 manufacturing job openings in February, down from January’s 859,000, according to the U.S. Census Bureau. February’s number is also down from the manufacturing sector’s 11-month average of 867,000. However, the number of manufacturing quits rose from 315,000 in January to 337,000 in February, which is a new record.

According to Survey data from the Manufacturing Institute:

Eighty-two percent of survey respondents who left a manufacturing job in the past six months retired due to age or for health-related reasons.
The remaining 18% resigned or were laid off.
Of the 18% who resigned or were laid off, 73% are back to work in a different manufacturing job, 7% are working in a different industry and 20% are still looking for work.

The survey suggests that retirements are a bigger issue than quits, at least among respondents. The majority of those who are quitting are remaining in manufacturing.

See the data at the US Census Bureau

Invasion of Ukraine Headlines

U.S. 2 Year/10 Year Treasury Yield Curve Inverts

A key part of the yield curve inverted on Tuesday, as the 2-year U.S. Treasury note yield briefly rose above the benchmark 10-year U.S. Treasury note yield for the first time since September 2019. An inversion of the two-year, 10-year part of the curve is viewed by many as a reliable signal that a recession is likely to follow in one to two years. The 2s/10s curve briefly showed minus 0.03 basis point.

“The movements in the twos and the tens are a reflection that the market is growing nervous that the Fed may not be successful in fostering a soft landing,” said Joe Manimbo, Senior Market Analyst at Western Union Business Solutions noted. “For one, the Fed has signaled that they could raise rates aggressively and that’s coming against a backdrop of expectations for growth to moderate this year already.”

New York’s Budget Talks Remain in Neutral Amid Disagreement

The April 1 deadline is essentially a meaningless one for nearly all 20 million New Yorkers, even as lawmakers and Gov. Kathy Hochul wrestle with consequential proposals over how to fund child care, whether New York’s criminal justice system needs to undergo further changes and how at minimum $216 billion in taxpayer money should be spent.

Advocates and lawmakers were pushing on Tuesday to include child care funding for undocumented immigrants as officials circle around boosting spending by $3 billion. Lawmakers also remain at odds over how to change New York’s cash bail law. Hochul wants more circumstances for when bail is considered. An expansion of Kendra’s Law, a measure that requires people in a mental health crisis to receive treatment, also remains controversial. But Democrats expect the measure will at least be extended, potentially in the budget.

US COVID – ‘One-Stop’ Site Will Help Americans Find Info on COVID Testing, Treatments

More than two years into the pandemic the Biden administration is launching an online one-stop center that will enable Americans to quickly find information about COVID vaccines, tests treatments and masks and get up-to-date information on the disease in their area. COVID.gov, also will include a “test-to-treat” locator that will help people access pharmacies and community health centers where they can get tested for COVID and receive treatments.

The site comes as the U.S. is entering a new phase of the pandemic, with a steep decline in the number of hospitalizations and new COVID cases. Most states and local governments have dropped their mask mandates.

Read more at USA Today
Visit the site (the site has also been added to the above COVID-19 Useful Links)

NIH’s Sluggish and Often Opaque Efforts to Study Long COVID Draw Patient, Expert Ire

Fifteen months ago, Congress showered the NIH with a massive $1.2 billion to research the mysterious cases of patients who never fully recover from Covid-19 infections. But so far the NIH has brought in just 3% of the patients it plans to recruit. Critics charge that the NIH’s missteps are even bigger: that it is acting without urgency, that it is taking on vague, open-ended research questions rather than testing out therapies or treatments, and that it is not being fully transparent with patient advocates and researchers.

The success of the NIH’s research into long COVID will shape the trajectory of the long-term burden of the pandemic on health care systems around the world for years to come. But the NIH will have to walk the fine line between responsibly designing large-scale research to provide the clearest answers, and making sure the effort doesn’t buckle under the weight of bureaucracy.

Regulatory Update: Justice Department Aids OSHA Enforcement

The Department of Justice (DOJ) said it will be increasingly pursuing cases in regard to worker safety and safe working conditions through formal collaboration with the Department of Labor (DOL), which includes the Occupational Safety and Health Administration (OSHA) and Mine Safety and Health Administration (MSHA).

DOJ is “deepening our partnership with DOL to sharpen the tools at our disposal to protect American workers,” declared Attorney General Merrick Garland on March 7 at the White House Roundtable on the State of Labor Market Competition in the U.S. Economy. This was where Biden administration officials detailed ambitious plans to promote unionization developed by an interagency task force.

NY Businesses Want State to Cover Rising Costs of Unemployment

New York business owners want the state to use some of the billions of dollars it received in federal relief aid to cover rising unemployment costs that threaten to swamp struggling businesses. They’re asking the state to shift at least $2 billion in federal relief aid toward the $9 billion debt the state incurred borrowing from the federal government when the state’s unemployment fund ran out during the pandemic. Businesses have been tagged with increased employer payroll taxes to cover the debt, on top of what they pay in federal taxes.

“We don’t expect the state legislature to cover the full $9 billion burden,” said Ken Pokalsky, Vice President of The Business Council of New York State. “However, we believe lawmakers need to make a significant down payment and provide immediate UI tax relief. The shutdowns were state-mandated measures to address a growing public health crisis, not the fault of private-sector employers, so it makes sense to have a public-private sharing of this repayment. State relief will help businesses who continue to face challenges due to the pandemic.”

ECB’s Lagarde: ‘Significant’ Economic Risks Rising Due to War

Russian aggression against Ukraine is set to drive inflation higher in the near-term and poses significant risks to the eurozone’s growth prospects, European Central Bank President Christine Lagarde cautioned Wednesday. Three main factors that are likely to push inflation up: Higher energy prices; higher food prices due to Ukraine’s key role as a wheat exporter; and renewed bottlenecks in global supply chains.

“At the same time, the war poses significant risks to growth,” Lagarde added. She pointed to souring sentiment, which suggests that consumers may dial back purchases while companies put investment on hold. “Europe is entering a difficult phase,” Lagarde said. ”There is considerable uncertainty about how large these effects will be and how long they will last for.” Amid the uncertainty, the ECB stands ready to revise both the size and the duration of its bond-buying program, which is currently scheduled to run out after the third quarter.

In any case, the ECB will move only gradually in its efforts to normalize policy in the face of raging inflation, she said.

German Inflation Surges Above Expectations to 7.6 Percent in March

German annual inflation surged to 7.6 percent in March, racing well ahead of expectations, preliminary data from the national statistics office showed Wednesday. Earlier Wednesday, the German government’s council of economic advisers projected inflation to average 6.1 percent this year, more than three times the European Central Bank’s price stability target, before declining to 3.4 percent in 2023.

The European Commission Economic Sentiment indicator, released earlier Wednesday, also sent a warning signal about further inflation ahead. The survey showed that selling-price expectations for the next three months rose to unprecedented levels in all surveyed business sectors. ECB President Christine Lagarde said that the Ukraine war is set to push inflation higher in the near term. At the same time, however, she cautioned that the region is facing significant risks to growth, which will require policymakers to move only gradually in their fight against surging prices.

Senate Advances China Competition Legislation

The U.S. Senate voted Monday to greenlight a multibillion-dollar bill aimed at jumpstarting high-tech research and manufacturing, countering China’s growing influence and easing a global shortage of computer chips. The legislation is the upper chamber’s version of the House’s America Competes bill that passed in February. Lawmakers are expected to start negotiations between both parties in the House and Senate to marry the different texts.

The 2,900-page House version passed mostly along party lines with Republicans arguing it wasn’t tough enough on China and that it was overly focused on unrelated issues like climate change and social inequality. That means it is destined for a conference committee, where Senate Republicans will have all the leverage since 10 of them will be needed to get the final text back through the upper chamber.

House Sends Bipartisan Cyber Crime Bill to Biden for Signature

The House passed bipartisan cybersecurity legislation on Tuesday that would improve the way the federal government tracks, measures and analyzes cyber crime. The Better Cybercrime Metrics Act, which the House approved in a bipartisan 377-48 vote, will help U.S. law enforcement agencies better identify cyber threats, prevent attacks and prosecute cyber crime.

The bill follows the passage of a new cyber law that requires companies in critical infrastructure to report substantial cyberattacks and ransomware payments within 24 to 72 hours to the Cybersecurity and Infrastructure Security Agency (CISA), a federal agency that oversees cybersecurity infrastructure and enforcement.

The LNG Export Boom Is Draining U.S. Natural-Gas Supplies and Lifting Prices

The U.S. is shipping more natural gas than ever overseas, which is keeping domestic inventories lean and power prices high Natural-gas prices usually decline into spring, when heating demand drops but before air-conditioning season begins. This year prices climbed into spring, thanks to record export volumes and promises from the White House to support the shipment of even more liquefied natural gas, or LNG, to allies across the Atlantic to supplant Russian supply.

U.S. natural gas futures for April delivery ended Tuesday at $5.336 per million British thermal units, more than double the price a year ago. So far in 2022, natural-gas prices have risen 43%. The last time there was such a sharp run-up to start a year was in 2008, when energy prices surged ahead of the financial crisis. A deep recession and the shale-drilling boom’s bounty of fuel kept prices depressed for more than a decade after.

Biden’s Global Quest for Oil Triggers Political Pushback

President Biden’s global quest for more oil is meeting resistance from across the political spectrum. Republicans have criticized him for scolding the U.S. oil industry and pushing for alternative-energy sources even as Russia’s invasion of Ukraine has underscored the world’s dependence on fossil fuels.

Mr. Biden has shifted course recently, including announcing that the U.S. would ship more liquefied natural gas to Europe to help countries there reduce their dependence on Russian gas. That shift, however, drove concerns among progressives who think the Democratic president is stepping back from his campaign promise to transition the U.S. away from fossil fuels. Democrats and Republicans alike also have chafed at White House attempts to get authoritarian regimes such as Venezuela and Saudi Arabia to produce more oil.

Germany Girds for Natural Gas Rationing, Europe on Edge in Russian Standoff

Germany triggered an emergency plan to manage gas supplies on Wednesday that could see Europe’s largest economy ration power if a standoff over a Russian demand to pay for fuel with roubles disrupts or halts supplies. President Vladimir Putin has said Russia, the world’s top natural gas producer, will soon require “unfriendly” countries to pay for fuel in roubles, raising alarm about a possible gas crunch in Europe.

However, the Russian president told German Chancellor Olaf Scholz by phone on Wednesday that nothing would change for European partners and payments would still be made in euros and transferred to Gazprom bank, a German spokesperson said. The payment should be done in the rouble equivalent on a pre-agreed settlement day, the sources said.

Perceptions of Manufacturing Are Changing, But More Work is Needed

The study, 2022 Manufacturing Perception Study, from Deloitte and The Manufacturing Institute, found that 64% of those surveyed viewed manufacturing jobs as innovative. And that compares to 39% in 2017, the last time the study was conducted. 73% of those surveyed said that manufacturing was critical to the pandemic response by producing PPE, ventilators and other essential goods and equipment. And that view led 61% to say that their perception of the sector improved.

While this is welcome news, it must be viewed in terms of how many manufacturing jobs need to be filled. “In the past 11 months there have been 808,000 openings in manufacturing,” says Carolyn Lee, president, of The Manufacturing Institute. “There are so many jobs open that manufacturers, 45% in this survey, said they are turning down orders as they don’t have the workforce to produce the products.”