Daily Briefing – 391

Post: Oct. 13, 2021

CPI Edges Higher to 5.4% in September

U.S. consumer prices increased solidly in September as Americans paid more for food, rent and a range of other goods, putting pressure on the Biden administration to urgently resolve strained supply chains, which are hampering economic growth.

Inflation in the US, as measured by the Consumer Price Index (CPI), rose to 5.4% on a yearly basis in September from 5.3% in August, the US Bureau of Labor Statistics reported on Wednesday. This reading came in line with analysts’ estimates. On a monthly basis, the CPI edged higher to 0.4% from 0.3%. Annual Core CPI, which excludes volatile food and energy prices, stayed unchanged at 4% as expected.

IMF Cuts Global Growth Forecast Amid Supply-Chain Disruptions, Pandemic Pressures

The IMF cut its global growth forecast for 2021 to 5.9% from 6% in its July report, a result of a reduction in its projection for advanced economies to 5.2% from 5.6%. The reduction mostly reflected problems with a global supply chain that caused a mismatch between supply and demand. The group maintained its view that the global growth will moderate to 4.9% in 2022.

For emerging markets and developing economies, the outlook improved. Growth in these economies is pegged at 6.4% for 2021, up from an estimate of 6.3% in July. The uptick reflected stronger performances by some commodity-exporting countries amid rising energy prices.

L.A. Port to Operate Around the Clock to Ease Cargo Logjams

The White House on Wednesday announced Wednesday that one of the country’s busiest ports will operate around the clock, a move aimed at easing cargo bottlenecks that have led to goods shortages and higher consumer costs. Expanded operations at the Port of Los Angeles would nearly double the hours that cargo can move, according to the White House. It said the extra shifts have been agreed to by the International Longshore and Warehouse Union, which represents dock workers.

By going to 24/7, the Port of Los Angeles will join the neighboring Port of Long Beach, Calif., which started doing the same thing last month. Major ports in Asia and Europe have operated around the clock for years.

Manufacturing Job Openings Slip Slightly

The number of job openings in manufacturing decreased somewhat from July to August, but remained high, according to the Bureau of Labor Statistics. Job openings came in at 897,000, down from 906,000 in July, August was the fifth straight month with job postings that exceeded 800,000.

August saw an all-time high for job openings at nondurable goods firms, up from 388,000 to 393,000.
All nonfarm job openings decreased from a record of more than 11 million in July to about 10.4 million in August. There were more than 8 million unemployed Americans in August. The number of unemployed decreased again in September, down to approximately 7.67 million.

US COVID Update – Is a ‘Twindemic’ of Flu and COVID-19 About to Hit the U.S.?

U.S., experts are once again warning that the ongoing COVID-19 pandemic is about to collide with cold and flu season. And this year, the flu season may be worse than average in part because last year’s was shockingly mild.

To get a preview of the upcoming flu season for the U.S., experts look at cases in the Southern Hemisphere that occur from May to October—the winter months in New Zealand, Australia, and parts of Asia. “So far, they’ve had another historically light flu season,” says Richard Webby, director of the World Health Organization Collaborating Center for Studies on the Ecology of Influenza in Animals and Birds. Flu activity in the U.S. is also currently low, according to the CDC, although it’s still early in the season. And unfortunately, a combination of other factors suggest that influenza may yet come roaring back.

NYS Vaccine and COVID Update

Vaccine Stats as of Wednesday October 13th:

One Vaccine Dose

72.2 of all New Yorkers – 14,069,198 (plus 16,908 from a day earlier)
In the Hudson Valley 1,474,504 (plus 1,664)

Fully Vaccinated

64.5% of all New Yorkers – 12,647,455 (plus 19,651).
In the Hudson Valley – 1,310,686 (plus 1,673).

The Governor updated COVID data through Tuesday October 12th. There were 32 COVID related deaths for a total of 57,279.

Hospitalizations:

Patients Currently in Hospital statewide: 2,109.

Seven Day Average Positivity Rate:

Statewide 2.53%
Mid-Hudson: 2.55%

Useful Websites:

IEA: Gas and Coal Prices Have Jumped to All-Time Highs, Taking Electricity Prices With Them

The historic plunge in global energy consumption in the early months of the Covid-19 crisis last year drove the prices of many fuels to their lowest levels in decades. But since then, they have rebounded strongly, mainly as a result of an exceptionally rapid global economic recovery (this year is on track for the fastest post-recession growth in 80 years), a cold and long winter in the Northern Hemisphere, and a weaker-than-expected increase in supply.

Natural gas prices have seen the biggest increase, with European and Asian benchmark prices hitting an all-time record last week – around ten times their level a year ago. US month-ahead natural gas prices have more than tripled since October 2020 to reach their highest level since 2008. International coal prices are around five times their level a year ago, and coal power plants in China and India, the world’s two largest coal consumers, have very low stocks ahead of the winter season.

Boeing to Require Worker Vaccination by December 8

Boeing will require all of its employees to receive COVID-19 vaccinations by December 8 or face possible termination, the Seattle Times reported October 12. Boeing said the mandate is necessary for the company to comply with September’s vaccinate-or-test OSHA rule, which requires private businesses with more than 100 employees to ensure their workers are either vaccinated or tested weekly for the pandemic virus.

Boeing, a federal contractor, leaves the option to get tested weekly open only to those with relevant disabilities or a “sincerely held religious belief.” Any employee who gets such an exemption will have to be able to provide a recent negative COVID-19 test result on request.

US Will Re-Open Canadian and Mexican Borders to Fully Vaccinated Visitors

The new rules, which are similar to those announced for international air passengers, will be rolled out in a phased approach. The first phase, kicking off in early November, will allow fully vaccinated visitors traveling for nonessential reasons, like visiting friends or for tourism, to cross US land borders. The second phase, starting in early January 2022, will apply the vaccination requirement to all inbound foreign travelers, whether traveling for essential or nonessential reasons.

The US has been limiting nonessential travel on the ground along its borders with Canada and Mexico since the start of the Covid-19 pandemic and extending those restrictions on a monthly basis. Air travel between the US and those countries has been possible. The restrictions don’t apply to cross-border trade, US citizens and lawful permanent residents, as well as people traveling for medical purposes or to attend school, among others.

Europe’s Carmakers Face Raw Material Bottleneck for EV Batteries

Major carmakers like Volkswagen, Daimler and Stellantis have been racing to secure battery cell supplies in Europe, but may face a bigger challenge as they seek to go electric – finding enough battery raw materials. Failure to obtain adequate supplies of lithium, nickel, manganese or cobalt could slow the shift to electric vehicles (EVs), make those vehicles more expensive and threaten carmakers’ profit margins.

“There is a serious question as to whether supply can keep up with demand across the battery supply chain,” says Daniel Harrison, an auto analyst at Ultima Media. Recently, battery cell factory announcements have come thick and fast, and EIT InnoEnergy now lists almost 50 planned projects in the EU.

Virtual and Augmented Reality in Manufacturing

For many manufacturers, it can take years to fully train workers in some roles. The adoption of virtual and augmented reality technologies promises to help train employees faster and open new positions to the possibility of remote work. However, any widespread adoption of such technologies will present its own challenges.

According to an industry survey conducted by PwC, virtual and augmented reality technologies can be used to train workers up to four times more quickly than conventional training methods. For manufacturers seeking to attract a new generation of workers, changing perceptions about the manufacturing industry remains a priority. Now that VR technology is readily available to consumers, it can be used to showcase the often brightly lit, pleasant environments afforded by modern manufacturing operations.

Machine-Tool Orders Surge

New orders for machine tools by U.S. machine shops and other manufacturers rose to $560 million during August, up more than 19.0% from July and 89.0% higher than the August 2020 new-order total. It was the fifth month-to-month rise in U.S. Manufacturing Technology Orders during 2021 and brings the eight-month total for new orders in 2021 to $3.55 billion, 53.5% higher than the January-August 2020 total.

“The August numbers highlight the dramatic rebound from sales in 2020,” stated Douglas K. Woods, president of AMT – the Assn. for Manufacturing Technology, which issues the monthly USMTO report. “It was the highest level of orders since September 2018 and the sixth-highest in the history of USMTO,” Woods continued.

“Get Used to it” – Kraft Heinz Says Higher Food Prices Will Persist

Miguel Patricio said the international food giant, which makes tomato sauce and baked beans, was putting up prices in several countries. Unlike in previous years, he said, inflation was “across the board”.

The cost of ingredients such as cereals and oils has pushed global food prices to a 10-year high, according to the UN Food and Agriculture Organisation. Kraft Heinz has increased prices on more than half its products in the US, its home market, and Mr Patricio admitted that is happening elsewhere too. “We are raising prices, where necessary, around the world,” he said.

Manufacturers Try New Approach to Attract, Retain Employees

Manufacturers are using new benefits, flexible work arrangements, better pay and the elimination of degree requirements to find and retain workers. Efforts in Washington state include a weeklong bus tour to highlight potential careers for students.

“We don’t have the luxury any more to weed people out by things such as degrees because they’re going to come in and they won’t have it and you’re going to rule out good people. Instead, you have to say what’s the baseline capabilities. Let’s bring them in. If they can meet the baseline capabilities, we can train them on these other things,” he said.

LG to Reimburse GM $1.9 Billion Over Chevy Bolt Recall

General Motors announced Tuesday that it reached an agreement with supplier LG to be reimbursed for $1.9 billion in costs connected with the recall of the Chevrolet Bolt. LG Electronics will repay GM for the cost of addressing defects that necessitated the recall of more than 140,000 Bolts due to fire risk.

GM announced recalls of the vehicles over the past few months following a series of car fires. The automaker also urged Bolt owners to park their cars outside and away from homes and to not let the charge dip below 70 miles of available range. The Detroit automaker is building jointly-owned battery plants with LG in the United States and indicated Tuesday it views the South Korean company as a long-time partner in its EV push.

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