Daily Briefing – 417

Post: Dec. 1, 2021

Manufacturers Facing Supply Headaches as Omicron Risks Emerge

Global factory activity accelerated in November although crippling supply bottlenecks remained, putting a cap on output and driving up the cost of raw materials, according to surveys published on Wednesday. The November surveys likely did not reflect the spread of the Omicron variant, which could add further pressure on pandemic-disrupted supply chains, with many countries imposing fresh border controls to seal themselves off.

IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) for the euro zone nudged up to 58.4 in November from October’s 58.3, shy of an initial 58.6 “flash” estimate but still comfortably above the 50 mark separating growth from contraction. In Britain, outside the European Union and euro zone, more manufacturers than at any point in the last 30 years reported rising costs last month, underlining pressure on the Bank of England to raise interest rates.

Consumer Confidence Sinks to 9-Month Low on Inflation and COVID Worries

Consumer confidence fell in November to the lowest level in nine months because of worries about high inflation — and optimism could dip again if a new strain of the coronavirus said to be more resistant to vaccines keeps spreading. The index of consumer confidence dropped to 109.5 from 111.6 in October, the privately run Conference Board said Tuesday. It was the fourth decline in the past five months.

Some 58% of consumers said jobs are “plentiful,” an usually high number. Companies have more than 10 million job openings and many are raising wages and benefits to attract workers. Only 11.1% of those polled said jobs are hard to find. Americans are somewhat less optimistic about the economy right now as the present situation index slipped to 142.5 from 145.5. That’s the lowest level since April.

OECD Warns Inflation Surge and Omicron Could Undermine Global Recovery

In its latest economic outlook, the Paris-based group warned that the rebound from last year’s pandemic slump is losing some momentum as the surge in demand for goods has led to bottlenecks in production chains. This could worsen, if central banks are forced to act to fight inflation. Inflation pressures have emerged in all economies, it says, with rising food and energy prices hitting low-income households in particular.

The main risk, The OECD predicts, is that inflation continues to surprise on the upside, forcing the major central banks to tighten monetary policy earlier and to a greater extent than projected. Such an outcome could stem from a number of possible factors, including prolonged supply disruptions, an upward shift in inflation expectations, labor market pressures, or if prices for a wider range of goods and services start to rise substantially.

U.S. Moving to Toughen COVID Rules for International Arrivals, More Testing and self-Quarantine Likely

The Centers for Disease Control and Prevention said in a Tuesday statement that it was working toward requiring that all air travelers to the U.S. be tested for COVID-19 within a day before boarding their flight. Currently those who are fully vaccinated may present a test taken within three days of boarding.

“CDC is working to modify the current Global Testing Order for travel as we learn more about the Omicron variant; a revised order would shorten the timeline for required testing for all international air travelers to one day before departure to the United States,” the agency said. The precise testing protocols were still being finalized ahead of a speech by President Joe Biden planned for Thursday on the nation’s plans to control the COVID-19 pandemic during the winter season.

US COVID Update – First US Omicron Case Detected in California

The U.S. has detected the nation’s first case of the omicron variant of the coronavirus in California, the Centers for Disease Control and Prevention (CDC) said Wednesday. The individual was a fully vaccinated traveler who returned from South Africa on November 22, the CDC said. The person had mild symptoms that are improving, and is self-quarantining. The person has since tested negative, and all close contacts have also tested negative, the CDC added.

It was widely expected that the variant would be detected in the U.S. It has already been identified in other countries, including the U.K. and Canada, even after countries moved to restrict travel from southern African countries, where the first known case was discovered, at the end of last week.

NYS Vaccine and COVID Update

Vaccine Stats as of Wednesday December 1:

One Vaccine Dose

78.2 of all New Yorkers – 14,929,848 (plus 20,536 from a day earlier).
In the Hudson Valley 1,567,118 (plus 2,307).

Fully Vaccinated

68.5% of all New Yorkers – 13,314,993 (plus 23,014).
In the Hudson Valley – 1,3668,481 (plus 2,170).

The Governor updated COVID data through Tuesday November 30. There were 45 COVID related deaths for a total of 59,280.

Hospitalizations:

Patients Currently in Hospital statewide: 3,022.

7 Day Average Positivity Rate – 7-day average of cases per 100K population

Statewide 4.37% – 27.75 positive cases per 100,00 population
Mid-Hudson: 3.73% – 33.98 positive cases per 100,00 population

Useful Websites:

Nationwide Preliminary Injunction on Centers for Medicare & Medicaid Enforcing COVID-19 Vaccine Rule

The U.S. District Court for the Western District of Louisiana has granted a preliminary injunction enjoining the Centers for Medicare and Medicaid (CMS) from enforcing its COVID-19 vaccine mandate nationwide. Louisiana et al. v. Becerra et al., No. 3:12-CV-03970 (W.D. La. Nov. 30, 2021). This injunction takes immediate effect.

Jackson Lewis Attorneys suggest several paths employers affected by the CMS mandate may consider in light of the nationwide preliminary injunction.

Survey: 35% of Hiring Managers Will Automatically Reject Candidates Who Don’t Provide Vaccine Status on Resumes

In an October survey conducted by ResumeOk of 1,379 hiring managers in the U.S., 35% will automatically reject candidates who do not write their COVID-19 vaccine status on their resumes. The survey also found other variations with 39% of hiring managers preferring to see the candidate’s vax status on their resume while 26% said that the status wasn’t part of their hiring decision. And 86% of hiring managers are more likely to call candidates who provide vaccine information.

73% of hiring managers said dealing with vaccination status is making hiring more difficult. Only 27% of hiring managers said that they have a large pool of candidates to choose from and that the mandate does not affect recruiting. Recruiters also said they had already seen a drop in applications in certain sectors due to the pandemic, and that the mandate has decreased the number of applications even further.

Federal Contractor Vaccine Mandate Temporarily Enjoined in Three States

A federal judge in the case of Commonwealth of Kentucky v. Biden has decided President Joe Biden likely overstepped his authority with Executive Order 14042 in requiring federal contractors to mandate COVID-19 vaccinations for their employees. Adding additional complexity and confusion to the already muddied landscape, the decision enjoins the Order for going into effect in Kentucky, Ohio and Tennessee -the three states that challenged the Executive Order in the lawsuit.

Federal contractors and subcontractors subject to EO 14042 and the implementing FAR Clause are relieved, at least temporarily, from implementing the requirements for employees in the three named states. This injunction throws a curve ball for Tennessee employers in particular.

Travel Rebounds… for Now

This year’s Thanksgiving travel picked up after last year’s COVID-19 lull. More than 2.4 million people were screened on Sunday as returning passengers, topping the figure of 1.2 million last year. Total travelers were about half a million shy of the Transportation Security Administration’s historic record of nearly 2.9 million passenger check-ins in 2019, but still hovered at 1.2 million more than 2020. “For the 10-day Thanksgiving travel rush that began Nov. 19, the TSA said it screened nearly 20.9 million passengers. That compares with 9.5 million a year ago and a record 23.5 million in 2019.”

Thanksgiving travel was punctuated by news about a new and concerning COVID-19 variant. First noted by South Africa’s scientists, the omicron variant has already been found in a range of countries and could spread worldwide by the end of the year. Travel restrictions are in place in many nations and may soon expand.

China Factory Activity Grows as Some Bottlenecks Ease

China’s factory activity unexpectedly picked up in November, growing for the first time in three months as the crippling surge in raw material prices and power rationing eased, taking some pressure off the manufacturing sector. The official manufacturing Purchasing Managers’ Index (PMI) rose to 50.1 in November from 49.2 in October, data from the National Bureau of Statistics (NBS) showed on Tuesday. Analysts expect the slowdown in gross domestic product (GDP) seen in the third-quarter to continue in the fourth with demand expected to remain soft.

The world’s second-largest economy, which staged an impressive rebound from last year’s pandemic slump, has lost momentum in the second half of this year as it grapples with slowing manufacturing, debt problems in the property market and COVID-19 outbreaks. A subindex for production rose to 52.0 in November from 48.4 in October while new orders fell at a slower pace, although November marked the fourth straight month of declines in customer demand.

After Plummeting, India’s GDP Grows at 8.4% in Q2

Few economies were battered by covid-19 as badly as India’s. In 2020 GDP shrank by 7.3%. Now the government is confident that the economy is roaring back—so much so that it claims India will be the fastest-growing economy in the world this year. Manufacturing posted a 5.5 per cent increase, reflecting both a recovery in domestic demand and buoyant exports.

These elevated growth rates largely reflect the depths to which the economy plunged last year. In absolute terms GDP is only expected to hit pre-pandemic levels by next quarter, suggesting that two years for growth have been lost. Even before the pandemic, India’s economy had been struggling with weak demand, limp investment and an ailing financial sector. As these problems fester and the threat of Omicron looms, the country is still some way from a full recovery.

Merck’s Covid-19 Pill Backed by FDA Advisers

An outside panel of scientific advisers to the Food and Drug Administration narrowly recommended the agency authorize the experimental Covid-19 oral antiviral from Merck and partner Ridgeback Biotherapeutics LP. The panel voted 13 to 10 in support of the FDA granting use. The recommendation is limited to high-risk people.

The panel’s blessing paves the way for the drug, called molnupiravir, to be available in the U.S. before the end of the year. Merck plans to study whether molnupiravir is effective against the worrisome Omicron variant and is working to collect samples of the new strain to do so, Nick Kartsonis, who oversees Merck’s vaccine clinical research, told the panel.

Keeping Older Workers Is a Boon to Manufacturers

Retaining older workers benefits manufacturers, and having multigenerational teams boosts company productivity, employee engagement and the bottom line, according to a new study by the MI’s Center for Manufacturing Research and AARP. “The labor market is challenged right now, with a historic number of resignations across the economy, including a significant number of retirees,” said MI Executive Director Carolyn Lee.

“As a result of the workforce challenges, manufacturers are finding that retaining older workers is not only a necessity but an asset,” said AARP Executive Vice President and Chief Advocacy & Engagement Officer Nancy LeaMond. “Research shows that age-diverse workforces have a positive effect on employee engagement, productivity and the bottom line. The expertise of older workers helps businesses and pays big dividends for the economy as a whole. Employers who embrace age diversity will be at an advantage.”

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