Daily Briefing – 349

Post: Jul. 28, 2021

Fed Says Economy Has Made Progress Toward Its Goals, May Begin Bond Taper

The Federal Reserve indicated that the economy has made progress toward the central bank’s employment and inflation goals, and officials offered a hint they could begin to reduce their asset purchases later this year.

Some officials are concerned that a burst of inflation this year from bottlenecks associated with reopening the economy will prove more durable than previously anticipated. These policy makers are eager to start the taper. Another camp thinks recent price pressures will subside and could leave the Fed in the same position that it faced for much of the past decade, in which global forces kept inflation below 2% even with historically low interest rates.

Bipartisan Group Reaches Agreement on $1.2 Trillion “Hard” Infrastructure Bill

a bipartisan group of senators finally reached a deal on “the major issues” in their $1.2 trillion “hard” infrastructure package, GOP senators involved in the talks announced Wednesday.

It could be days before the group finishes writing the bill, but the Senate can begin debating the legislation in earnest now that they have resolved the outstanding issues. The bill needs 60 votes to advance in the Senate. Senate Majority Leader Chuck Schumer (D-N.Y.) said Wednesday that the Senate could vote as early as Wednesday night to advance the proposal, the second time they will vote on this procedural measure.

Administration Proposes Rule to Change Federal Procurement Process

The Biden administration is proposing a rule that would accelerate federal procurement policy to require a higher level of American-made products. Under an initiative the government would require that products obtained under the longstanding “Buy American” program have at least 60% of the value of components made in the U.S., up from the current 55% threshold. That would increase to 75% by 2029, White House officials said.

The new initiative is similar to what Mr. Trump pursued in office as he tried to strengthen domestic manufacturing with a particular aim toward lessening reliance on China. Officials said the new rule would also give priority to purchase supply-chain goods that have become scarce during the Covid-19 pandemic, such as semiconductors and medical equipment.

New York Will Require State Workers To Be Vaccinated Or Undergo Weekly Testing

New York will require all state employees to get vaccinated against the coronavirus by Labor Day or undergo weekly tests for COVID-19, Gov. Andrew Cuomo said Wednesday. In mandating either the shots, or frequent testing for government workers, Cuomo is following on the heels of California and New York City, which announced similar policies for employees earlier this week.

Cuomo said vaccines would be mandatory for “front-line” workers at state-owned hospitals. Those employees would not be able to avoid inoculations by undergoing frequent virus testing. The state runs hospitals in Syracuse and New York City and on Long Island.

US COVID Update – Study Covid Cases in US May Have Been Undercounted by 60%

The study, published in the Proceedings of the National Academy of Sciences, builds on research which has found the number of reported cases “represents only a fraction of the estimated total number of infections”. It has important implications for how many Americans need to be vaccinated to stop outbreaks.

The paper comes as a swath of states across the south and midwest, especially Arkansas, Missouri and Louisiana, experience outbreaks driven by Delta variant infections among unvaccinated people.

NYS Vaccine and COVID Update

Vaccine Stats as of Wednesday July 28th:

One Vaccine Dose

62.6% of all New Yorkers – 12,022,678 (plus 14,263 from a day earlier)
In the Hudson Valley 1,278,285 (plus 3,137)

Fully Vaccinated

56.7% of all New Yorkers – 11,033,877 are fully vaccinated (Plus 13,075)
In the Hudson Valley – 1,157,523 (plus 2,202) are fully vaccinated.

The Governor updated COVID data through Tuesday July 2tth. There were 7 COVID related deaths for a total of 43,068.

Hospitalizations:

Patients Currently in Hospital statewide: 591

Seven Day Average Positivity Rate:

Statewide 2.04%
Mid-Hudson: 1.72%

Useful Websites:

What to Know About COVID Booster Shots as the Delta Variant Spreads

The consensus around whether or not COVID vaccine booster shots are necessary—and who should be prioritized to get them and when—is quickly shifting as the COVID Delta variant cases fuel a surge in new infections across the U.S. Biden administration officials now believe that certain Americans, especially the elderly and those with compromised immune systems, will likely need a booster shot of the Pfizer or Moderna vaccines to ensure continued protection against coronavirus strains of all stripes.

The shift comes just one week after the administration was parsing open questions about the scientific need for a third dose of the Pfizer/BioNTech or Moderna COVID vaccines, which are both based on mRNA technology and require two doses for full vaccination.

Jackson Lewis on CDC Mask Recommendations

Council Associate member Jackson Lewis Attorneys write that in its latest Interim Public Health Recommendations for Fully Vaccinated People, the CDC explains that while infections happen only in a small proportion of people who are fully vaccinated (even with the highly transmissible “Delta” variant), “preliminary evidence suggest that fully vaccinated people who become infected with the Delta variant can spread the virus to others.”

CDC Director Rochelle Walensky explained that the CDC made this decision based on evidence from recent investigations of outbreaks involving the Delta variant, which is now the predominant variant in the United States.

Big Tech, Others Blows Out Earnings – Warn on Future

The earnings blowout continued Tuesday with Big Tech and others beating expectations by a wide margin. They all were careful to warn that the torrid pace of growth is unlikely to continue into the end of the year.

Apple Inc. beat on both the top and bottom lines as every product line posted annual sales growth of at least 12%. However, the tech giant warned the chip shortage would impact iPhone and iPad sales in the current quarter.
Microsoft Corp. posted record quarterly profit as revenue from its Azure cloud service soared 51%. Sales guidance for the current quarter exceeded expectations.
Alphabet Inc. revenue surged to a record as advertising sales rose almost 70%, benefitting from the online shopping boom caused by the pandemic. The company’s Google Cloud business, which trails rivals from Amazon and Microsoft, narrowed operating loss.
Boeing Co. booked its first quarterly profit in almost two years as 737 MAX deliveries picked up amid a reopening of the global economy. The plane maker said it expects to increase 737 MAX production from its current pace of 16 per month to 31 per month by early next year.
McDonald’s Corp. said U.S. same-store sales climbed 25.9% versus a year ago as demand for its new chicken sandwich and a promotion with K-pop group BTS provided a lift. Global same-store sales were up 40.5% from a year ago as the easing of more overseas restrictions bolstered those markets.

Consumer Confidence at 17-Month High

The Conference Board said its consumer confidence index ticked up to a reading of 129.1 this month, the highest level since February 2020, from 128.9 in June. Economists polled by Reuters had forecast the index would fall to 123.9.

Consumers’ inflation expectations over the next 12 months dipped to 6.6% from 6.7% last month. The Conference Board survey places more emphasis on the labor market. The University of Michigan’s survey of consumers showed sentiment falling in early July because of inflation concerns.

Business Spending on Equipment Strong

New orders for durable goods increased in June, gaining 0.8 percent, the 13th rise in the last 14 months. Total durable goods orders are up 40.7 percent from a year ago. The June gain puts the level of total durable goods orders at $257.6 billion (see top of first chart).

New orders for nondefense capital goods excluding aircraft or core capital goods, a proxy for business equipment investment, rose 0.5 percent in June after gaining 0.5 percent in May and 2.7 percent in April, putting the level at $76.1 billion, another record high.

OSHA Heat Standard Will Impact Manufacturers, Warehouses and Distribution Centers

The Occupational Safety and Health Administration (OSHA) is working on a new heat standard to target indoor workers without climate-controlled environments, including those in manufacturing, warehouses and distribution centers that fall under that definition.

Two years ago, the public interest group Public Citizen and Democrat legislators asked that such a rule be promulgated by OSHA. Up until now, the agency has pursued charges against employers for heat-related injuries and illnesses among workers primarily in outdoor environments. Even then, it has done so under the General Duty clause rather than any specific heat-related standard.

Metal Formers Face Longer Lead Times, Material Shortages

The Precision Metalforming Association (PMA) Business Conditions Report for July report shows that 36% of metalforming companies forecast an improvement in economic activity in the next three months (the same percentage as reported in June), 55% predict no change (compared to 52% last month) and 9% anticipate a decline in activity (decreasing from 12% in June). Sixty-three percent of respondents reported an increase in lead times, slightly down from 66% in June.

“PMA members continue to report significant problems in finding the raw materials needed to meet demand,” PMA President David Klotz said in a statement. “As we have been reporting, members are telling us that their lead times are extending into midyear of 2022 for steel, with similar challenges for aluminum, copper, brass and other metals. Combined with continued difficulty in finding workers and the semiconductor shortage that has idled some auto plants, our members are facing a challenging environment.

June Retail Sales Increase as Recovery Continues

Retail sales saw solid growth during June, as the recovery from the pandemic continued, the National Retail Federation said earlier this month.

The U.S. Census Bureau said earlier this month that overall retail sales in June were up 0.6% seasonally adjusted from May and up 18% year-over-year. That compares with a decrease of 1.7% month-over-month and an increase of 27.6% year-over-year in May. Year-over-year increases were unusually high this spring because most stores were closed by the pandemic during those months last year, but some stores had started to reopen by last June.

Second Round of $175 Million Workforce Development Initiative Launches

Governor Cuomo Yesterday announced the launch of the second round of the $175 million Workforce Development Initiative. This second round of funding makes $48 million available to support strategic regional efforts that help New Yorkers find quality, well-paid jobs and meet businesses’ short-term workforce needs, improve regional talent pipelines, enhance the flexibility and adaptability of local workforce entities, expand apprenticeships and address the long-term needs of growing industries.

Information about the application process and program guidelines are available here. The Consolidated Funding Application will open to applicants on Monday August 2nd, and applications will be accepted on a continual basis. The funding made available for this initiative consolidates multiple programs administered by various state agencies and authorities.

Read the Press Release

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