Daily Briefing – 392

Post: Oct. 17, 2021

Empire State Manufacturing Survey – Delivery Times, Prices Paid at All time Highs

Manufacturing activity continued to grow at a solid clip in New York State, according to the October survey.

The new orders index declined nine points to 24.3, and the shipments index moved down eighteen points to 8.9, indicating that growth slowed in both orders and shipments.
The delivery times index inched up to a record high of 38.0, indicating significantly longer delivery times. Inventories increased modestly.
The prices paid index rose three points to 78.7 and the prices received index fell four points to 43.5, with both indexes holding near record highs.
The index for number of employees came in at 17.1 and the average workweek index declined nine points to 15.3, pointing to ongoing gains in employment and hours worked.
Both capital spending and technology spending increased significantly.

Looking a head the index for future business conditions increased four points to 52.0, indicating continuing optimism about the six-month outlook. New orders and shipments are both expected to increase strongly in the months ahead. Substantial increases in employment and prices are also expected.

Policymakers Now Confront a “COVID – Green” Global Energy Crunch

Last week, the price for West Texas Intermediate (WTI) crude oil reached $82, its highest level since 2014. And Goldman Sachs is predicting further increases to $90 by the end of this year. Meanwhile, prices for natural gas, coal and electricity have climbed to record highs because of shortages in Asia, Europe and the United States. So, what are the sources of these price pressures? And what, if anything, can policymakers do to alleviate them?

J.P. Morgan researchers call it the “COVID-green” energy crisis. Possible policy changes include raising interest rates, encouraging the production of oil and natural gas or – and this is most likely, let the market run its course.

Fed Minutes: Tapering Could Begin in Mid-November or Mid-December

Federal Reserve officials discussed a plan to start to slow the $120 billion per month in purchases of Treasury and mortgage-backed securities that has been underway since June 2020 in either mid-November or mid-December at their Sept. 21-22 policy meeting, according to minutes of the gathering released Wednesday.

The minutes show officials discussed “an illustrative plan” to reduce the asset purchases by $15 billion per month – specifically cutting purchases of Treasuries by $10 billion and MBS purchases by $5 billion. No decision was made but “participants generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate,” the minutes said.

China’s Record Factory Inflation Poses Another Threat to Supply Chains

The cost of goods leaving China’s factories is surging by the highest rate on record, stoking fears about stagflation in the world’s second largest economy at a time when it is already grappling with an extreme power crunch and deepening debt woes. The producer price index — which measures the cost of goods sold to businesses — soared 10.7% in September from a year ago, according to government data released Thursday. That is the fastest increase since 1996, when the government began releasing such data, according to Eikon Refinitiv data.

The spike can be attributed to “higher prices in coal and products from energy-intensive sectors,” Dong Lijuan, senior statistician at China’s National Bureau of Statistics, said in a statement. Coal prices are at record highs in the country as supplies struggle to keep pace with demand from power stations.

US COVID – Cases, Mortality and Vaccination Rates are all Declining

The US CDC reports 44.5 million cumulative COVID-19 cases and 716,370 deaths. The US has passed a peak in terms of daily incidence. The most recent high was 161,711 new cases per day on September 1, and the trend began to decline slightly before the Labor Day holiday weekend. The current average is approximately 86,181 new cases per day and appears to be decreasing. Daily mortality also appears to have passed a peak, down from a recent high of 1,815 on September 15 to 1,252 on October 12.

The US has administered 404 million cumulative doses of vaccines. The daily vaccination trend rose briefly following authorization of booster doses of the Pfizer-BioNTech vaccine for some populations on September 22 but is now declining after a recent peak on October 1. There are 217.6 million individuals who have received at least 1 dose, equivalent to 65.6% of the entire US population. Among adults, 78.5% have received at least 1 dose. A total of 187.9 million individuals are fully vaccinated, which corresponds to approximately 68% of adults are fully vaccinated.

NYS Vaccine and COVID Update

Vaccine Stats as of Sunday October 17th:

One Vaccine Dose

72.9 of all New Yorkers – 14,129,105 (plus 13,222 from a day earlier)
In the Hudson Valley 1,479,345 (plus 992)

Fully Vaccinated

65.4% of all New Yorkers – 12,728,745 (plus 18,567).
In the Hudson Valley – 1,317,017 (plus 1,219).

The Governor updated COVID data through Saturday October 16th. There were 36 COVID related deaths for a total of 57,288.

Hospitalizations:

Patients Currently in Hospital statewide: 2,086.

Seven Day Average Positivity Rate:

Statewide 2.45%
Mid-Hudson: 2.24%

Useful Websites:

FDA Advisers Recommend Second Shot of J&J Vaccine

Outside advisers to the U.S. Food and Drug Administration on Friday voted unanimously to recommend regulators authorize a second shot of Johnson & Johnson’s (JNJ.N) COVID-19 vaccine to better protect Americans who received the one-dose vaccine. The FDA is not bound to follow the advisory panel recommendations, but typically does.

The FDA’s Vaccines and Related Biological Products Advisory Committee backed the shots for all J&J recipients aged 18 and older at least two months after their first dose.

FDA Delays Moderna Covid-19 Vaccine for Adolescents

The Food and Drug Administration is delaying a decision on authorizing Moderna Inc.’s MRNA -2.31% Covid-19 vaccine for adolescents to assess whether the shot may lead to heightened risk of a rare inflammatory heart condition, according to people familiar with the matter. The agency plans to further review data before deciding on whether to extend the vaccine’s eligibility to younger people, the people said.

So far, the regulators haven’t determined whether there is an elevated risk, the people said. The delay could be several weeks, but the timing is unclear, one of the people said.

Kaiser: COVID-19 Continues to be a Leading Cause of Death in the U.S. in September 2021

An updated issue brief examines COVID-19’s effect on mortality rates, and estimates that in September 2021, COVID-19 was the number two on the list of the top ten leading causes of death in the U.S. As recently as January 2021, COVID was the number one leading cause of death, though COVID rank had briefly dropped to the 8th leading cause of death in July 2021 before the delta variant, relaxed social distancing and inadequate vaccinations led to a surge in new cases and deaths.

The analysis also estimates that nationally more than 90,000 deaths from COVID-19 since June could have been prevented with vaccines. More than half of those preventable deaths occurred in September.

BLS JOLTS: Record 4.3 Million Workers Quit Their Jobs in August

Quits hit a new series high, as 4.3 million workers left their jobs. The quits rate rose to 2.9%, an increase of 242,000 from the previous month, which saw a rate of 2.7%, according to the department’s Job Openings and Labor Turnover Survey. The rate, which is measured against total employment, is the highest in a data series that goes back to December 2000.

Employment vacancies fell to 10.44 million during the month, a drop of 659,000 from July’s upwardly revised 11.1 million, according to the department’s Job Openings and Labor Turnover Survey. Federal Reserve officials watch the JOLTS report closely for signs of slack in the labor market.

Boeing Deals with New Dreamliner Defect Amid Production Problems

The new problem involves certain titanium parts that are weaker than they should be on 787s built over the past three years, people familiar with the matter said. The discovery is among other Dreamliner snafus that have left Boeing stuck with more than $25 billion of the jets in its inventory.

The finding is fresh evidence that the plane maker is still trying to fix its manufacturing operations, despite a nearly two-year push by Chief Executive David Calhoun to restore Boeing’s reputation for building quality jets. In addition, the Federal Aviation Administration is investigating Boeing’s quality controls.

US Will Lift Curbs Nov. 8 for Vaccinated Foreign Travelers

Starting Nov. 8, the United States will admit fully vaccinated foreign air travelers from the 26 so-called Schengen countries in Europe, including France, Germany, Italy, Spain, Switzerland and Greece, as well as Britain, Ireland, China, India, South Africa, Iran and Brazil. The unprecedented U.S. restrictions have barred non-U.S. citizens who were in those countries within the past 14 days.

Non-U.S. air travelers will need to show proof of vaccination before boarding a flight, and will need to show proof of a recent negative COVID-19 test. Foreign visitors crossing a land border will not need to show proof of a recent negative COVID-19 test. The new rules do not require foreign visitors or Americans entering the country to go into quarantine.

293,000 Individuals Filed New Claims Last Week, Pandemic-Era Low

The latest jobless claims data reflected the smallest number of new filings since March 2020. New weekly jobless claims having been inching closer to their pre-pandemic levels over the past several months, reflecting a slowdown in firings, layoffs and separations as reopenings took place and demand for workers resurged.

Initial unemployment claims, week ended October 9: 293,000 vs. 320,000 expected and a revised 329,000 during prior week.
Continuing claims, week ended October 2: 2.593 million vs. 2.670 million expected and a revised 2.727 million during prior week.

Legal Matters: Mandatory Vaccinations

Jeffrey D. Buss, of Smith, Buss & Jacobs LLP writes that recently, a federal court upheld New York City’s mandatory Covid-19 vaccination requirements for the city’s school teachers in Maniscalco v. City of New York. Somewhat at odds with these decisions is a ruling by a federal judge this week enjoining New York state from enforcing mandatory vaccination rules for health care workers because the state’s vaccination requirement does not provide an exemption based on an employee’s religious beliefs.

As these decisions are clarified by the appellate courts, employers should adopt a policy that preserves public health and employee well-being, consistent with state and federal guidelines. That could include a mandatory vaccination requirement, with a limited, reasonable accommodation consistent with the needs of the employer, granted on a case-by-case basis for good cause. In determining what type of accommodation is required, an employer needs to consider whether they are operating in an environment with a vulnerable population — like a hospital, nursing home or school — and whether the employee can perform their job remotely.

Toyota Cuts Worldwide Production by 10%-15%

In a release dated October 15, Toyota Motors announced it would drop its November production targets from roughly 1 million units to between 900,000 and 850,000 units, a cut of between 10-15%. Toyota’s home operations in Japan will make roughly 50,000 fewer vehicles than initially planned, and it will make between 50,000 to 100,000 fewer cars and trucks overseas.

As previously, the production loss is due to the ongoing parts shortage plaguing auto manufacturers worldwide. Toyota said Friday it would implement anti-COVID-19 measures at its plants and suppliers, a response to parts shortages from Southeastern Asia caused by outbreaks of the pandemic there, and consider alternatives to scarce semiconductor computer chips.

DiNapoli Unveils Tracker to Monitor Federal COVID Funding

The Office of the State Comptroller created a new online tool to monitor spending of federal recovery aid and COVID-19 relief programs in the State, including funds for excluded workers, childcare providers, emergency rental and homeowner assistance, and small business recovery.

“My office is committed to full transparency in government spending,” State Comptroller DiNapoli said. “New York has received an historic level of federal funding to weather the COVID-19 pandemic. This has helped stabilize State and local government finances and allowed for greater investments in programs to assist New Yorkers in need. My office will follow the money to ensure federal funds are getting where they are supposed to go and being spent in smart and efficient ways to help New York’s recovery.”

Strike – Workers Everywhere from John Deere to Hollywood Have Brushed the Dust Bunnies off the Picket Line

The pandemic and its economics and social impacts have caused many people to reconfigure their ideas of work. After all, between layoffs, furloughs, and quarantine, the workers had two years to re-evaluate what place their jobs had in their lives, whether the transaction between their labor and their salaries was an equitable one, and to search for any power they could find to push back. And there, over in the corner, covered with dust bunnies, was the power to strike. And they pushed the starter button and the engine turned over on the first try.

In addition, the rise of the progressive movement within the Democratic Party has given the people on the picket lines some powerful allies.

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