Daily Briefing – 315

Post: May. 31, 2021

First Biden Budget Retains Trump-Era Business Tax Break

Owners of closely held businesses would still get a 20% tax deduction under President Biden’s tax plan, leaving high-income people who run construction companies and manufacturing firms benefiting—for now—from a provision that Republicans created in 2017 over Democratic opposition. The deduction went untouched in the first $2.4 trillion worth of net tax increases that were detailed by the Biden administration on Friday.

The break comes with some limits for high-income households, defined as individuals with taxable income above $164,900 or married couples with income above $329,800 this year. In those income groups, service businesses such as law firms and medical practices aren’t eligible, the idea being that their income is more akin to wages, not business ownership.

U.S. Core Capital Goods Orders, Shipments Increase Strongly in April

New orders for key U.S.-made capital goods increased more than expected in April and shipments rose solidly, suggesting strong momentum in business spending on equipment growth persisted early in the second quarter. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 2.3% last month, the Commerce Department said on Thursday. These so-called core capital goods orders increased 1.6% in March.

Business investment on equipment has enjoyed double-digit growth over the last three quarters thanks to a shift in demand towards goods from services during the COVID-19 pandemic and massive fiscal stimulus to soften the blow to the economy from the public health crisis.

EEOC Guidance: Employers Can Require Covid-19 Vaccine

The Equal Employment Opportunity Commission issued updated guidance stating that federal laws don’t prevent an employer from requiring workers to be vaccinated.

However, in some circumstances, federal laws may require the employer to provide reasonable accommodations for employees who, because of a disability or a religious belief, aren’t vaccinated. For example, the EEOC said as a reasonable accommodation, an unvaccinated employee entering the workplace might wear a face mask, work at a social distance or be given the opportunity to telework.

The Economist: Assessing the Theory that COVID-19 Leaked from a Chinese Lab

It is possible that the chain of infections which spread sars-cov-2 around the world began, as most new diseases do, when an animal virus found its way unaided into humans, whether in field or farm, cave or market. It is also possible that the chain began in a Chinese government laboratory. These two possibilities have been recognized by many of those studying the covid-19 pandemic for a long time. But the fact that two things are both possible does not mean they are equally likely.

For most of 2020 scientists and the media tended to treat the likelihood of a leak from a lab as a very small one, with everyday contact—“zoonotic spillover”—overwhelmingly more probable. That has now changed. Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said in March that assessment of the laboratory hypothesis had not yet been extensive enough.

US Vaccine Rollout – Memorial Day Weekend First “Normal” Holiday Since Pandemic

With coronavirus cases dropping and 50% of American adults fully vaccinated, Memorial Day weekend figures to be a test of whether the U.S. can avoid the spikes in infections and hospitalizations that occurred amid, and after, the winter holidays before vaccines were widely available.

More than 37 million people are expected to travel 50 miles or more from home between Thursday and Monday – a 60% jump compared to last year, but still 6 million people fewer than the pre-pandemic Memorial Day weekend in 2019, according to AAA.

NYS Vaccine Update

As of Monday morning 10,700,375 (plus 21,535 from a day earlier) New Yorkers have received at least one vaccine dose and 9,119,724 are fully vaccinated (Plus 29,082). In the Hudson Valley 1,137,354 (plus 1,923) have at least one dose and 955,915 (plus 2,066) are fully vaccinated.

NYS COVID Update

The Governor updated COVID data through Monday May 31st. There were 18 COVID related deaths for a total of 42,715. Hospitalization tracking data for the Mid-Hudson region and the rest of the State are below.

Hospitalizations

Patients Currently in Hospital statewide: 1,032

Seven Day Average Positivity Rate:

Statewide 0.67%
Mid-Hudson: 0.63%

Useful Websites:

OECD Raises Growth Forecasts

The global economy is set to grow 5.8% this year and 4.4% next year, the Organization for Economic Cooperation and Development said, raising its estimates from 5.6% and 4.0% respectively in its last forecasts released in March.

The global economy has now returned to pre-pandemic activity levels, but has not yet achieved the growth expected prior to the global health crisis, the OECD said in its latest Economic Outlook publication. “The world economy is currently navigating towards the recovery, with lots of frictions,” OECD chief economist Laurence Boone said in an editorial to the Outlook.

GM Restarting Some Plants Hit by Chip Shortages

GM said it is restarting operations at four plants in the United States, Mexico and Canada starting this week. Two plants in Mexico – San Luis Potosi Assembly and Ramos Assembly – that build the Chevrolet Equinox, GMC Terrain and Chevrolet Blazer will resume production on May 31. GM will also resume full production on May 31 at its Bupyeong 1 Assembly in South Korea, which produces the Chevrolet Trailblazer and Buick Encore GX and has been operating at 50% capacity since April 26, and return the Changwon assembly plant to two shifts.

GM’s CAMI Assembly plant in Ingersoll, Ontario, that builds the Equinox will resume production earlier than expected on June 14 and run through July 2. The plant has been idled since February 8. Lansing Grand River will restart production of the Chevrolet Camaro earlier than expected on June 21. The plant has been down since May 10.

DHS Extends Form I-9 Requirement Flexibility

The Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) announced an extension of the flexibility in complying with requirements related to Form I-9, Employment Eligibility Verification, due to COVID-19. This temporary guidance was set to expire May 31, 2021. Because of ongoing precautions related to COVID-19, DHS has extended the Form I-9 requirement flexibilities from June 1 to August 31, 2021.

Employers must monitor the DHS and ICE’s Workforce Enforcement announcements about when the extensions end and normal operations resume.

Positive Marijuana Tests Are Up Among U.S. Workers

The proportion of U.S. workers who tested positive for marijuana in urine climbed higher in 2020 while the overall share of positive drug tests plateaued last year, according to Quest Diagnostics Inc., DGX -0.02% one of the largest drug-testing laboratories in the U.S. About 2.7% of the approximately seven million drug tests Quest conducted on behalf of employers came back positive for marijuana—up from 2.5% in 2019 and 2% in 2016.

Overall, the percentage of working Americans testing positive for any drug was 4.4%, little changed from 2019, when the rate of positive urine-based drug tests hit its highest level in 16 years. Though federal and state data indicate drug overdoses and abuse have risen during the pandemic, Quest officials say that isn’t captured in their data because many overdose victims likely weren’t subject to workplace drug testing last year.

Jobless Claims: Initial Filings Fell for a Fourth Straight Week, Continuing Benefits Remain High

Initial unemployment claims fell for a fourth straight week to set a new 14-month low as the labor market recovery made further strides toward recovering jobs lost during the pandemic.

Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:

Initial jobless claims, week ended May 22: 406,000 vs. 425,000 expected and 444,000 during the prior week.
Continuing claims, week ended May 15: 3.642 million vs. 3.680 million expected and a revised 3.738 million during the prior week

GM and Lockheed Martin to Collaborate on Next Moon Transport

In a joint statement May 26, Lockheed Martin Corp. and General Motors Co. announced they would be working together to develop a new generation of Moon-ready vehicles as part of NASA’s Artemis program. According to NASA, its next trek to the Moon will involve robotic rovers that will prepare for human landings and enhance the range of scientific experiments as well as Lunar Transport Vehicles (LTVs) capable of carrying astronauts.

Lockheed Martin will lead the team, the companies say, while GM will leverage its battery-electric technology and its history in lunar-vehicle development: The Detroit, Michigan-based automaker helped develop the chassis and wheels for the rover used in Apollo’s 15-17 missions.

Survey: Concerns About Missing Work Preventing People From Being Vaccinated

A study published by the Kaiser Family Foundation found that 48% of people are worried “they might have to miss work if the side effects of the vaccine make them feel sick…” To alleviate these concerns, the New York State Department of Labor will issued guidance Thursday to all employers advising that any recovery period after a COVID-19 vaccination is covered by New York’s paid sick leave law.

This should ensure that any employee will be paid in the case that time off is needed to recover from COVID-19 vaccine side effects.

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