Economists: Higher Inflation Is Here to Stay for Years
Economists surveyed this month by The Wall Street Journal raised their forecasts of how high inflation would go and for how long, compared with their previous expectations in April. The respondents on average now expect a widely followed measure of inflation, which excludes volatile food and energy components, to be up 3.2% in the fourth quarter of 2021 from a year before. They forecast the annual rise to recede to slightly less than 2.3% a year in 2022 and 2023.
If the economists prove correct, Federal Reserve officials might have to raise rates sooner or more than they expect to keep inflation under control. The Fed’s preferred inflation gauge—the overall PCE index, which includes food and energy prices—rose 3.9% in May, nearly double the central bank’s 2% target. The Fed, in a report released Friday, repeated its view that inflation has picked up this year due to bottlenecks, hiring difficulties and other “largely transitory factors” related to the economy’s rebound from the effects of the pandemic.
U.S.-Manufactured Goods Exports Rebounding Strongly Year to Date
The J.P. Morgan Global Manufacturing PMI dipped from 56.0 in May, the fastest pace since April 2010, to 55.5 in June. Most of the key indicators pulled back in the latest survey, but with still-solid manufacturing activity overall and continued optimism for the coming months. Supply chain disruptions and elevated pricing pressures remain significant challenges worldwide.
For the fifth consecutive month, eight of the top nine markets for U.S.-manufactured goods had expanding manufacturing sectors in June. Manufacturing activity in Mexico remained challenged, contracting for the 15th straight month. Of the nine markets, five had some easing in their manufacturing PMIs in June, with the other four strengthening somewhat.
Biden Executive Order Aims to Spur Competition by Targeting Big Business
President Biden signed a broad executive order that aims to promote competitive markets across the U.S. economy and limit corporate dominance that the White House says puts consumers, workers and smaller companies at a disadvantage. The order, the centerpiece of a new Democratic emphasis on restraining the nation’s most powerful companies, lays out a detailed plan to address what the Biden administration sees as trouble spots across industries.
Many contend the Biden administration is starting from a faulty premise and risks making the U.S. economy less productive as a result. The executive order targeting the technology industry jeopardizes “free services that consumers use to message and call loved ones, get directions, connect with healthcare professionals, consume online content—including news and educational content—and much more,” said TechNet, a group that represents senior industry executives.
Mr. Biden’s order by itself doesn’t impose new requirements on the business community. The success of the White House effort could depend on how hard—and how quickly—government agencies push to implement his competition policies, which are likely to face court challenges.
CDC Updates Guidelines To Protect Kids From COVID In School
The Centers for Disease Control and Prevention is focusing on the coming school year, and its message is clear: It wants students back in the classroom. On Friday, the agency issued updated guidance for K-12 schools, highlighting the importance of getting as many eligible children vaccinated as possible to return classrooms to normal or near normal and enumerating its list of best practices to prevent transmission of COVID-19.
The updated guidelines note that fully vaccinated staff and students may not need to wear masks at school. (But because of the CDC order requiring masks on public transportation, they would have to mask up on school buses.) For students too young to be vaccinated at this time, the CDC suggests multiple strategies to reduce the risk of transmission: notably, mask-wearing for ages 2 and up and physical distancing when possible of a minimum of 3 feet in indoor school settings (even when children are vaccinated).
NYS Vaccine and COVID Update – One Reported Death Saturday
Vaccine Stats as of Sunday morning:
One Vaccine Dose
- 60.9% of all New Yorkers – 11,720,703 (plus 15,025 from a day earlier)
- In the Hudson Valley 1,243,718 (plus 1,394)
- 55.2% of all New Yorkers – 10,752,796 are fully vaccinated (Plus 18,339)
- In the Hudson Valley – 1,129,284(plus 1,554) are fully vaccinated.
The Governor updated COVID data through Saturday July 10th. There was 1 COVID related deaths for a total of 43,010.
- Patients Currently in Hospital statewide: 339
Seven Day Average Positivity Rate:
- Statewide 0.84%
- Mid-Hudson: 0.73%
- Read the press release
- Visit the vaccine tracker site
- See the School Districts Dashboard
- See the SUNY Dashboard
- State Vaccine Information Site
US COVID Update – Mortality Declines, Delta Takes Hold
Daily incidence has increased over the past several weeks, up from a low of 11,281 new cases per day on June 20 to 14,884 on July 7, an increase of 32% over that period—including an increase of 16% over the past week. Daily mortality continues to decline, although it increased slightly on July 7. It is likely that reporting delays over the Independence Day holiday weekend are impacting the incidence and mortality figures; however, some states have transitioned from daily to weekly reporting, so the degree of impact may differ compared to earlier in the pandemic.
The CDC published updated genomic surveillance data, including Nowcast projections for June 20-July 3. In the most current official data, the Delta variant (B.1.617.2) reached 30.4% of new cases for June 6-19. The Delta variant remains #2 behind the Alpha variant (B.1.1.7; 44.2%); however, its relative proportion continues to increase rapidly, tripling from the previous 2-week period (10.1%). In the CDC’s projection, Delta is not only the dominant variant, but it accounts for more than half of all new cases in the June 20-July 3 period (51.7%).
Read more at the Johns Hopkins Center for Health Security
Pfizer Will Seek FDA Approval of Vaccine Booster Shot in August
The company has received initial data from an early human study showing that a third dose of its existing coronavirus vaccine is safe and can raise neutralizing antibody levels by 5 to 10 fold compared with the original vaccine, Pfizer research head Mikael Dolsten said in an interview.
Once more data is in hand, Pfizer plans to ask the FDA to authorize a booster shot that could be given six to eight months after the original two doses, Dolsten said. The drugmaker is also talking with regulators in other countries and the European Union about the new results, he said. Pfizer produces the vaccine in partnership with BioNTech SE.
How mRNA Vaccines Could Lead to New Cancer Treatments
The technology behind the Pfizer-BioNTech and Moderna vaccines sounds like the stuff of science fiction. But long before anyone had heard of COVID-19, researchers had been developing mRNA vaccines to fight a range of diseases and infections. These companies are using mRNA to spur cancer patients’ bodies to make vaccines that will – they hope – prevent recurrences and treatments designed to fight off advanced tumors.
If they prove effective, which won’t be known for at least another year or two, they could be added to the arsenal of immune therapies designed to get the body to fight off its own tumors.
Corporate Vaccine Policies Begin to Take Shape
How should companies deal with employees who don’t want to get vaccinated? As Fortune’s Jessica Mathews writes: “On Wall Street, it’s been a mixed bag. Goldman Sachs has required its employees to report their vaccination status. Bank of America, BlackRock and Morgan Stanley are only allowing vaccinated employees back in the office…Charles Schwab doesn’t have a specific policy regarding vaccines.” Fortune
The Deloitte Global 2021 Millennial and Gen Z Survey
After a year of intense uncertainty due to the COVID-19 pandemic, political instability, racial discord, and severe climate events, millennials and Gen Zs around the world are determined to hold themselves and others accountable on society’s most pressing issues.
Respondents are channeling their energies toward meaningful action—increasing political involvement, aligning spending and career choices with their values, and driving change on societal issues that matter most to them. In turn, they expect institutions like businesses and governments to do more to help bring about their vision of a better future.
UK Economic Growth Slowed to 0.8% in May
Britain’s economic recovery stumbled in May when growth slowed to 0.8% after a contraction in building work and a slump in car production. It was the fourth consecutive month of GDP growth, and followed 2% growth in April, but the slowdown in May was sharper than expected after City economists had forecast a 1.5% increase.
The Office for National Statistics (ONS) said the manufacturing industry was hit by a shortage of computer chips that forced car companies to cut back production. As a result, transport equipment manufacturing fell by 16.5%, its largest fall since April 2020 and the worst period of the coronavirus pandemic. Shortages of timber and steel brought many building projects to a standstill and led to the construction sector shrinking for a second consecutive month by 0.8%.
Industrial Real Estate Demand Rising
the spectacular growth in e-commerce during the COVID-19 pandemic, coupled with previously forecasted organic growth, is driving a boom in industrial real estate, including warehouse and distribution center construction. The industrial real estate services firm CBRE has added some hard numbers to those projections.
E-commerce is expected to grow to represent a total of 26% of all retail sales by 2025 in the United States, creating the need for an additional 330 million sq. ft. of distribution space just to handle the increase in online ordering in that timeframe, CBRE believes. That anticipated e-commerce-generated demand for distribution space represents 27% of the projected overall demand for industrial real estate in the U.S. through 2025, CBRE Econometric Advisors calculates. The broader category of industrial real estate includes warehouses for traditional retail distribution, manufacturing, R&D space and data centers.
Shippers Look for Alternatives to Costly Packaging
Prices for corrugated cardboard and other packaging materials have been rising due to increased e-commerce demand and supply chain disruptions, so shippers are looking for more economical and environmentally friendly ways to package products. Right-sized packaging and box alternatives such as padded envelopes are among tactics companies are using.
Surging direct-to-consumer sales and related last-mile delivery demands are also to blame, according to Gartner research from late 2020. When asked to rank their strategies for controlling final-mile delivery costs, more than 400 supply chain executives surveyed placed “packaging optimization” in their top three.
Another 373,000 Filed New Unemployment Claims
New weekly jobless claims unexpectedly ticked higher last week in another sign of the labor market’s choppy recovery.
- Initial jobless claims, week ended July 3: 373,000 vs. 350,000 expected and a revised 371,000 during prior week
- Continuing claims, week ended June 26: 3.339 million vs. 3.350 million expected and a revised 3.484 million during prior week
Despite the past week’s slight bump higher, initial unemployment claims have been on the decline for months now, as vaccinations enabled re-openings that in turn fueled a need for workers across industries to keep up with consumer demand.