Daily Briefing – 410
Empire State Survey Supplemental Questions on Supply Disruptions and Workforce
Supplementary questions in the November 2021 Empire State Manufacturing Survey focused on supply disruptions, expected changes in firms’ workforces, factors underlying the changes and recent trends in wages. With respect to supply disruptions, almost no respondents said that conditions had improved,
whereas nearly two-thirds of manufacturers said they had worsened. Responses about the near-term
outlook were only slightly less negative: just over half of manufacturers said they expect the availability of supplies to worsen further.
With respect to employment and hiring plans, a majority — 56 percent of manufacturers—said they expected their workforce to increase over the next twelve months. Fewer than 10 percent of businesses anticipated declines in staffing levels. These balances are substantially more positive than those in the November 2020 survey, conducted in the midst of the pandemic, but are also a good deal more favorable than those in the November 2019 survey. A sizable majority of firms—60 percent of manufacturers—reported difficulty in filling positions.
U.S. Industrial Output Surges in October After Stumbling from Hurricane Ida
Industrial production rose 1.6% in October, the Federal Reserve reported Tuesday, recovering all of the 1.3% decline experienced in the prior month. Capacity utilization rebounded to 76.4% in October from 75.2 in the prior month. The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities. Economists had forecast a 75.8% rate.
About half the gain in October reflected a recovery from the effects of Hurricane Ida which hit the U.S. Gulf Coast in late August and wrought damage in the Northeast in early September. There was also a strong gain in autos. Overall, the manufacturing sector is struggling to meet high demand because of supply chain woes.
Manchin Skeptical Biden Spending Plan Will Address Inflation
Centrist Sen. Joe Manchin (D-W.Va.) on Tuesday said that he remains worried about inflation and he’s not yet buying the argument from other Democrats that President Biden’s Build Back Better will lower everyday costs. Manchin said he’s hearing complaints about inflation from constituents at home.
Asked whether he’s buying the argument from the White House that the Build Back Better Act, which would inject another $1.75 trillion into the economy, will lower inflation, Manchin expressed uncertainty about whether it makes sense. “They say it’s going to lower [inflation]? I’ll have to check on that one,” he replied.
Biden, Xi Cool Down Hostilities in Virtual Meeting
President Biden and Chinese President Xi Jinping used a virtual meeting Monday evening to cool tensions between the two powers as the leaders seek to manage issues they disagree on and identify ways to communicate to avert conflict. The discussion didn’t produce any major resolutions, officials said.
During a meeting that lasted more than three hours, both sides sought to tamp down hostilities that have marked the relationship since Mr. Biden took office in January. The White House said the two discussed a range of topics including Afghanistan, North Korea and Iran, as well as human rights, climate change and concerns over Taiwan. On trade and economic issues, Mr. Biden called on China during the meeting to fulfill its commitments under a trade deal signed early last year, according to the White House readout.
US COVID Update – Why Delta Variant is Spiking in New England
New COVID-19 cases are climbing in New England as the highly contagious delta variant continues to hit unvaccinated populations amid seasonal changes, forcing residents to move indoors. Vermont, which has one of the lowest case rates and is one of the most vaccinated states, is averaging 369 daily COVID-19 cases.
Hospitalizations are also up in Vermont, as well as in New Hampshire and Maine. Aalok Khole, an infectious disease physician at Cheshire Medical Center in Keene, New Hampshire told NBC many of the cases requiring intensive care are occurring in younger individuals. “Most recently we’ve seen some folks in the [intensive care unit] who are in the age groups of anywhere from 45 and 60, and I can definitely tell you these are unvaccinated individuals,” Khole said. “People between ages 12 and 35 dominate new cases right now. And a lot of this population has not been vaccinated by a single dose.” Khole added.
NYS Vaccine and COVID Update
Vaccine Stats as of Tuesday November 16th:
One Vaccine Dose
- 76.0 of all New Yorkers – 14,628,938 (plus 23,225 from a day earlier).
- In the Hudson Valley 1,534,686 (plus 2,356).
Fully Vaccinated
- 67.7% of all New Yorkers – 13,144,690 (plus 11,505).
- In the Hudson Valley – 1,353,780 (plus 1,469).
The Governor updated COVID data through Monday November 15th. There were 30 COVID related deaths for a total of 58,635.
Hospitalizations:
- Patients Currently in Hospital statewide: 2,051.
Seven Day Average Positivity Rate:
- Statewide 3.40%
- Mid-Hudson: 2.70%
Useful Websites:
Pfizer Agrees to Let Other Companies Make its COVID-19 Pill
Drugmaker Pfizer Inc. has signed a deal with a U.N.-backed group to allow other manufacturers to make its experimental COVID-19 pill, a move that could make the treatment available to more than half of the world’s population. Pfizer said it would grant a license for the antiviral pill to the Geneva-based Medicines Patent Pool, which would let generic drug companies produce the pill for use in 95 countries, making up about 53% of the world’s population.
The deal excludes some large countries that have suffered devastating coronavirus outbreaks. For example, while a Brazilian drug company could get a license to make the pill for export to other countries, the medicine could not be made generically for use in Brazil. Still, health officials said the fact that the deal was struck even before Pfizer’s pill has been authorized anywhere, could help to end the pandemic quicker.
What’s Next for Vaccine Mandate Litigation?
In the fight over who has the authority to tell companies what to do when it comes to COVID-19 and workplace safety, a random drawing could play a big role in which side prevails. A lottery is expected to be held this week to determine which federal appeals court will hear the numerous challenges to the Occupational Safety and Health Administration’s emergency rule. Whatever happens next may not be the end of the road for the litigation. The case could very well end up at the Supreme Court.
While a majority of the lawsuits filed against the Biden administration seek to overturn the OSHA rule, several labor unions have sued saying the rule does not go far enough to protect workers from COVID-19. The union lawsuits were mostly filed in courts that either have a majority of judges appointed by Democratic presidents or are evenly split, automatically entering those courts into the lottery.
Fewer Adults Aged 25 to 54 Looking for Work
The number of adults between the ages of 25 and 54 who are looking for work has dropped by 1.4 million people since before the pandemic. The labor-force participation rate for “prime age workers” was 81.7% in October 2021, down from 82.9% in February 2020. Economists expected certain factors to send more people back into the labor market this fall—but the effects are either taking time to materialize or the incentives aren’t as powerful as they thought.
School re-openings haven’t brought large numbers of mothers back into the workforce. And the nationwide expiration of expanded unemployment benefits in September hasn’t widely spurred work searches. Another factor has been many workers’ new opinions on their work/life balance. Some workers may settle into a new lifestyle that involves part-time employment or more flexible hours, choosing never to return to the traditional workforce.
U.S. Retail Sales Accelerate in Strong Boost to Economy Spur Inflation Fears
U.S. retail sales surged in October, likely as Americans started their holiday shopping early to avoid empty shelves amid shortages of some goods because of the ongoing pandemic. Retail sales jumped 1.7% last month after increasing 0.8% in September. Sales have now risen for three straight months. Economists polled by Reuters had forecast retail sales advancing 1.4%. Sales soared 16.3% year-on-year in October.
The solid report from the Commerce Department on Tuesday suggested high inflation was not yet dampening spending, Even when adjusted for inflation, retail sales rose solidly last month, leaving the pace of growth in consumer spending above the meager 1.6% annualized rate logged in the third quarter. The fading headwind from a surge in coronavirus infections over the summer is reviving economic activity.
Auto Production Jumped 11% in October
Manufacturing output rose by 1.2 points to 99.8% of its 2012 average, the highest level it’s reached since March 2019, thanks to a remarkable recovery in the automotive sector. Motor vehicles and parts production, which fell in both September and August, rose to an annualized rate of 9.10 million trucks and cars from September’s 7.66 million annualized rate.
Auto producers made up the manufacturing sector with the largest recorded productivity boost, contributing 11 points to the industrial productivity index. Manufacturing productivity got an additional boost from the petroleum and chemicals industry, which added 5 points to the index.
Third Proposal Up for Vote in UAW’s Strike at Deere
Deere & Co. workers on strike at 12 plants in Iowa, Illinois and Kansas will vote Wednesday, November 17, on a third proposed contract, according to the United Auto Workers union. More than 10,000 UAW members have been on strike since October 14, following a decisive rejection of the first proposed agreement.
The company has not commented on the new proposal – though the union’s statement on the upcoming vote described it as Deere’s “last, best and final offer to the UAW negotiating team that includes modest modifications to the last (second) tentative agreement.”
Read more at Foundry Management & Technology
UK Economy Withstands End of Jobs Support, Easing BoE Worries
The number of people employed in Britain rose in October, despite the end of the government’s furlough scheme, which supported more than 1m jobs in its final weeks in September. Job-to-job moves were at a record high, driven by resignations rather than dismissals. Vacancies were also at a record high. A buoyant labor market increases the chances of an interest rate rise.
The Bank of England has been watching closely in case unemployment rose after the job-protecting furlough scheme expired at the end of September. “Now that today’s labor market data shows that hurdle has been cleared, we think the Bank of England has the green light for interest rate lift-off at their December meeting,” Ambrose Crofton, a global market strategist at J.P. Morgan Asset Management, said.
