Daily Briefing – 358

Post: Aug. 15, 2021

Producer Prices Rise

Producer prices for final demand goods and services increased 1% in July, matching June’s increase, according to the Bureau of Labor Statistics. “Manufacturing leaders continue to cite supply chain disruptions as a key challenge, and the data reflect additional sharp rises in raw material prices,” NAM Chief Economist Chad Moutray said. “While some of these increases will likely be transitory, there will also likely be some cost pressures that will not abate, particularly given the strength of the rebounding economy. That will put pressure on the Federal Reserve and its stance of keeping rates near zero with aggressive bond-buying for the foreseeable future.”

Energy costs increased for the third month in a row, reaching 2.6% in July.
The price of food decreased 2.1% in July, down for the first time since December 2020.
In the past 12 months, producer prices for final demand goods and services have soared a seasonally adjusted 7.7%, the largest increase on record.

State Education Department Issues COVID Guidance for Schools

The state Education Department issued a health and safety guide Thursday for dealing with COVID-19 in the state’s schools that generally highlights the U.S. Centers for Disease Control and Prevention recommendations. Below are some of its provisions:

Masks indoors and on school buses where recommended by the CDC
Three feet of social distancing, or six feet between students and unvaccinated staff members
COVID-19 testing
Improved ventilation
Handwashing
Staying home when sick
Regular cleaning practices

The guide did speak strongly about the potential spread of the virus among certain sports participants and extracurricular activities such as band. When it comes to sports, higher amounts of respiration may create a situation for spreading COVID-19, the guide states.

U.S.-Manufactured Goods Exports on Track to Be Just Shy of 2019 Pace

U.S.-manufactured goods exports were on track to reach $1,348.52 billion in 2021, rebounding from $1,168.19 billion in 2020 and just 1.24% below the pace seen in 2019 ($1,365.49 billion), based on seasonally adjusted data through the first two quarters.

The U.S. trade deficit rose to $75.75 billion in June, a new record, buoyed by a sharp increase in goods imports. Goods exports and imports both increased to new heights in June. At the same time, the service-sector trade surplus dropped to $17.43 billion in June, the lowest level since August 2012.

China’s New Five-Year Economic Plan that Would Strengthen its Grip on Crucial Sectors

The Chinese government has unveiled a five-year plan outlining tighter regulation of much of its economy. It says new rules will be introduced covering areas including national security, technology and monopolies in the world’s second largest economy.

The 10-point plan, which runs to the end of 2025, was released jointly late on Wednesday by China’s State Council and the Communist Party’s Central Committee. It said laws will be strengthened for “important fields” such as science and technological innovation, culture and education.

US COVID Update – Mortality Nears 500/Day

The US CDC reported 36.3 million cumulative COVID-19 cases and 617,096 deaths. The current average of 114,190 new cases per day is the highest since February 6. It appears, however, as though the US may be passing an inflection point, but it is difficult to determine whether this is an artifact of reporting frequency or an early indication of a longer-term trend. Daily mortality appears to continue its exponential increase up to 492 deaths per day, the highest average since May 22.

The US has administered 353.9 million cumulative doses of SARS-CoV-2 vaccines. Daily vaccinations continue to increase steadily, up to 640,617 doses per day. A total of 196.5 million individuals in the US have received at least 1 dose, equivalent to 59.2% of the entire US population. Among adults, 71.5% have received at least 1 dose, as well as 11.9 million adolescents aged 12-17 years.

NYS Vaccine and COVID Update

Vaccine Stats as of Sunday August 15th:

One Vaccine Dose

65.1% of all New Yorkers – 12,534,753 (plus 26,040 from a day earlier)
In the Hudson Valley 1,327,661 (plus 2,783)

Fully Vaccinated

58.3% of all New Yorkers – 11,347,559 are fully vaccinated (Plus 17,116)
In the Hudson Valley – 1,188,466 (plus 1,898) are fully vaccinated.

The Governor updated COVID data through Saturday August 14th. There were 18 COVID related deaths for a total of 43,248.

Hospitalizations:

Patients Currently in Hospital statewide: 1,650

Seven Day Average Positivity Rate:

Statewide 3.06%
Mid-Hudson: 3.25%

Useful Websites:

Pfizer’s COVID Vaccine May be Much Less Effective Against the Delta Variant Than Moderna’s

There is now mounting evidence that mRNA-based vaccines such as Pfizer’s and Moderna’s lose potency over time and especially against the Delta variant, and that the Pfizer vaccine’s efficacy drop is significantly more dramatic. The Mayo Clinic study noted a wide shortfall in the mRNA vaccines’ ability to prevent infections among patients using the Mayo Clinic Health System for the month of July, when Delta variant cases made up more than 70% of new local infections in its home state of Minnesota, compared with earlier in the year.

One key issue raised by the study, which has yet to be published in a peer-reviewed medical journal, for the millions of Americans who received two doses of Pfizer’s treatment is whether or not a Pfizer booster dose—either of the currently available jab or a new and updated version—is necessary to keep up with mutations or prevent COVID-19 reinfection from older coronavirus strains.

FDA Clears Booster Shots for Vulnerable Patients

The agency authorized booster-shots amid evidence that vaccines are less effective protecting immunocompromised people from Covid-19 than they are in protecting the general population. Some public health experts and vaccine makers have also recommended boosters as necessary for broader swaths of the population to keep strong protection against newer variants of the coronavirus, and because some preliminary research indicates vaccines may lose effectiveness over time.

The Biden administration is expected to lay out a plan for boosters by early September.

Census Data Show US is Diversifying

The U.S. became more diverse and more urban over the past decade, the Census Bureau reported last week as it released a trove of demographic data that will be used to redraw the nation’s political maps. Americans continued to migrate to the South and West at the expense of the Midwest and Northeast, the figures showed. The share of the white population fell from 63.7% in 2010 to 57.8% in 2020.

Slightly more than half—51.1%—of the total U.S. population growth between 2010 and 2020 came from growth in the Hispanic or Latino population.
Those under age 18 totaled 73.1 million, or 22.1% of the U.S. population in 2020, a 1.4% decrease from 74.2 million in 2010.
The multiracial U.S. population was recorded at nine million in 2010 and is now 33.8 million. The Census Bureau cautioned that changes in how it processed answers were adjusted in 2020.
As many cities and suburbs expanded, the bureau said, the trend toward rural depopulation continued during the decade.
Twenty-three congressional districts mostly concentrated in the suburbs and exurbs of Sunbelt cities grew by more than 20% since 2010.

State Borrowed $10B for Pandemic Unemployment Claims: Now it Must be Repaid

The sharp jump in unemployment insurance claims during the height of the COVID-19 pandemic emptied out the state’s dedicated fund for paying unemployment insurance, forcing New York to borrow $10 billion from the federal Department of Labor.

Going forward, the state will have to pay that back with the money coming from employers who are already seeing sharply higher unemployment insurance rates. “We know it’s a $10 billion tax on businesses over time that has to be paid back,” said Ken Pokalsky, vice president of the Business Council of New York State.

New York Attorney General Calls on Congress to Pass PRO Act, Reverse Right To Work Law

New York Attorney General Letitia James, as part of a coalition of 17 attorneys general, has called on the U.S. Senate to pass the Protecting the Right to Organize Act of 2021 (PRO Act). In a letter to Congress, the multistate coalition of Attorneys General highlights the urgent need to pass the PRO Act and urges the U.S. Senate to act to “improve the lives of America’s working families.”

The PRO Act provides protections for workers trying to organize by overhauling the National Labor Relations Act (NLRA), providing the rights to organize, unionize, and bargain collectively. The NAM and other Business organizations strongly oppose this legislation.

Business Groups Will Fight Tax Hikes in Budget Bill

Business groups, which celebrated the bipartisan $1 trillion infrastructure bill passed by the Senate on Tuesday, are preparing to aggressively lobby against Democrats’ broader $3.5 trillion spending package even as House leaders say they will not pass one bill without the other. The largest business groups, including the Chamber, National Association of Manufacturers and the Business Roundtable, praised the bipartisan infrastructure bill Tuesday as it passed the Senate and urged the House to swiftly vote on the spending package.

“Since I don’t believe there are 50 votes in the Senate to raise taxes right now, I think President Biden, who very much wants and needs a bipartisan win right now, will ultimately prevail against Pelosi and the progressives if they try to hold up the bipartisan package,” said Alex Vogel, CEO of lobbying firm The Vogel Group and a former Senate GOP aide.

Another 375,000 Filed New Unemployment Claims Last Week

New weekly jobless claims took another step lower last week, with the labor market’s recovery still making headway despite the lingering threat of the Delta variant. Continuing claims also dipped to a fresh pandemic-era low below 3 million, pacing back toward pre-virus levels.

Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

Initial unemployment claims, week ended August 7: 375,000 vs. 375,000 expected and a revised 387,000 during prior week
Continuing claims, week ended July 31: 2.866 million vs. 2.900 million expected and a revised 2.980 million during prior week

JPMorgan Chase Global PMI Eases, Still Strong

The global economic upturn remained solid at the start of the third quarter, with output growth especially robust in the euro area and US.

The services sector outperformed its manufacturing counterpart for the fourth successive month. The J.P.Morgan Global Composite Output Index – produced by J.P.Morgan and IHS Markit in association with ISM and IFPSM – slipped to a four-month low of 55.7 in July, down from 56.6 in June, remaining above its long-run average of 53.4.

The headline index has signaled expansion in each of the past 13 months.

The Economist: Most COVID-19 Travel Restrictions Should be Scrapped

Today’s travel restrictions are supposed to protect natives from imported covid. Yet they do a poor job of it. A few countries, mostly islands and dictatorships, have managed to keep out the virus through truly draconian restrictions. Even this has come at a cost in terms of reducing pressure to be vaccinated quickly.

There is a better way of regulating global travel. The first principle is to default to open borders. The second is for all countries to accept vaccines approved by the World Health Organisation. The third is to ensure that rules are transparent and universal. Too often, political expediency trumps science.

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