Daily Briefing – 451
U.S. Wages, Benefits Rose at Two-Decade High as Inflation Picked Up
The U.S. employment-cost index—a quarterly measure of wages and benefits paid by employers—showed that costs continued to rise at the highest rate in two decades. The fourth-quarter gain, compared with a year ago, was 4% on a non-seasonally adjusted basis, the Labor Department said Friday. However, the figures offered a sign that labor-cost increases could be easing, with the Labor Department reporting a seasonally adjusted 1% rise in compensation for the fourth quarter, down from with a 1.2% increase the previous three months.
Rising pay and benefits are putting more money in workers’ pockets—average hourly wages rose 4.7% in December from a year earlier—but not enough to keep pace with rising prices. Inflation recently hit its fastest pace in nearly four decades amid supply and demand imbalances for both goods and labor related to the Covid-19 pandemic.
Moderna’s Covid-19 Vaccine Receives Full FDA Approval
Moderna’s Covid-19 vaccine has received full approval from the US Food and Drug Administration, according to news releases from the FDA and Moderna. The vaccine, named Spikevax, is now approved for use in people ages 18 and older. It is not approved or authorized for use in younger individuals. There’s no difference between the approved vaccine and the vaccine previously available through emergency use authorization.
Moderna’s is the second Covid-19 vaccine to receive full approval from the FDA. Pfizer’s Covid-19 vaccine, Comirnaty, was approved for use in people age 16 and older in August. The Pfizer vaccine is also authorized for use in individuals ages 5 to 15.
Oil Rises Above $90 per Barrel on Geopolitical Risks, Supply Shortage
Oil rose on Monday as a supply shortage and political tensions in Eastern Europe and the Middle East put prices on track for their biggest monthly gain in almost a year. Brent crude had risen 87 cents, or 1%, to $90.90 a barrel by 1228 GMT. The front-month contract for March delivery expires later in the day. The most-active Brent contract, for April delivery , was trading at $89.03, up 51 cents, or 0.6%. U.S. West Texas Intermediate crude rose 47 cents, or 0.5%, to $87.29 a barrel.
UBS analyst Giovanni Staunovo said “ongoing geopolitical tensions, more European countries planning to lift Covid related restrictions and renewed supply disruptions in Ecuador are supporting oil prices at the start of the week.”
Natural Gas Prices Surge Higher on LNG Flows
Natural gas prices continued to surge higher as LNG flows hit a record. Traders in the Gulf were purchasing spot gas to use for LNG for the energy needs of the Europeans. The weather is expected to be much colder than normal in the South during the next 6-10 days. Over the next 8-14 days, the weather throughout most of the mid-West and East Coast are expected to be colder than normal.
Natural gas flows to Cheniere Energy’s Sabine Pass liquefied natural gas export terminal in Louisiana is setting record volumes. These flows have been fueled by purchases at Henry Hub, which is where the natural gas contract is settled. U.S. gas cargoes are going to energy-starved Europe. Gas flows to the plant hit a record 5.1B Bcf per day on both Thursday and Friday last week.
US COVID – Poll Finds Majority Ready to Accept COVID-19 as Part of Life
70 percent of Americans agree that “it’s time we accept that COVID is here to stay and we just need to get on with our lives,” a new poll showed. The survey from Monmouth University released on Monday showed that while Americans are still concerned about the pandemic, the overwhelming majority think it is time to continue on with the virus being a part of normal life.
The poll showed a definite partisan split, with 89 percent of Republicans saying it is time to move forward compared to 47 percent of Democrats. Seventy-one percent of independents say it is time to move forward, according to the survey.
NYS Vaccine and COVID Update – Hospitalizations Continue to Drop
Vaccine Stats as of January 31:
One Vaccine Dose
- 87.6% of all New Yorkers – 16,187,597 (plus 4,416 from a day earlier).
- In the Hudson Valley 1,681,607 (plus 650).
Fully Vaccinated
- 74.1% of all New Yorkers – 14,380,208 (plus 4,803).
- In the Hudson Valley – 1,465,577 (plus 552).
Boosters Given
- All New Yorkers – 5,903,885
- In the Hudson Valley – 705,639
The Governor updated COVID data through January 31. There were 87 COVID related deaths for a total reported of 66,074.
Hospitalizations:
- Patients Currently in Hospital statewide: 7,191.
7 Day Average Positivity Rate – Cases per 100K population
- Statewide 6.64% – 62.96 positive cases per 100,00 population
- Mid-Hudson: 6.23% – 56.53 positive cases per 100,00 population
Useful Websites:
Woodstock Apothecary Secures Contracts with Insurers to Provide At-Home COVID-19 Test Kits, Available to Council Members
Woodstock Apothecary, leaders in the local efforts to contain COVID-19, were able to source numerous at-home test kits and secure contracts with a number of the insurances to get these to folks at no charge as part of the Federal response to Omicron.
If you would like to learn how you might be able to secure up to 8 tests per month per covered family member of the FlowFlex brand, contact Neal Smoller neal@drnealsmoller.com. Test kits are also available for purchase for those without coverage.
Email Dr. Smoller for more information
How is Omicron Affecting the Global Economic Recovery?
Late November almost began to feel like the early days of the pandemic all over again. Global stock markets fell as news of what would come to be known as the Omicron variant filtered out and investors feared either another round of restrictions, or that people would shut themselves away. Two months on, Omicron’s impact is slowly coming into focus.
So far it is, largely, better than feared. Markets are skittish, but because of the prospect of higher interest rates, rather than covid-19. Goldman Sachs, a bank, has constructed a share-price index of European firms, such as airlines and hotels, that thrive when people are able and willing to be in public spaces. The index, a proxy for anxiety about the virus, has surged relative to wider stock markets in recent weeks.
Manufacturers Institute Survey Invitation: Compensation and Labor Market Competitiveness (Due 2/4)
The labor market is very tight right now. For every 100 job openings in the economy, there are just 65 people actively looking for work, and manufacturers continue citing difficulties in attracting and retaining employees as one of their top challenges. The Manufacturing Institute has partnered with Colonial Life to learn more about what manufacturers are doing to increase their competitiveness in the labor market.
For many, that likely means higher compensation, including pay and benefits, while for others, that might include increased flexibility and promoting the long-term career prospects at the company and in the manufacturing sector. This research is the first in a new series of Best Practices papers. Please take a moment to complete this short survey. All responses will be kept confidential, and the results will be posted online. Responses are due on Friday, February 4, at 5:00 pm EST.
Hochul’s Budget Proposal Calls for Packaging EPR by 2026
New York Gov. Kathy Hochul has made extended producer responsibility (EPR) for packaging a priority for her first term by including a provision in her executive budget and calling for the program to start as early as 2026. Her first State of the State report last week called the effort a “landmark proposal” that would help raise recycling rates and divert material from landfills.
The proposal calls for producers to either comply with the EPR law individually or join a producer responsibility organization, and producers would need to come up with the details of how to cover the costs of the program and reimburse municipalities or other participating service providers. An advisory committee of stakeholders would consult on more specific details of the plan. Hochul also called for eliminating PFAS in food packaging by Dec. 31, 2022, and other packaging by Dec. 31, 2024, in amounts exceeding 100 parts per million by weight.
Atlanta Fed’s President Bostic: Central Bank Could Hike Rates by a Half-Point if Needed
The Federal Reserve isn’t ruling out raising interest rates by half of a percent instead of the typical quarter-point move if inflation remains high, Atlanta Fed President Raphael Bostic said in an interview with the Financial Times. It’s largely believed that those hikes will be in quarter-point increments though some in the market, including Bill Ackman, believe a half-point hike is needed to tame inflation cause the Fed is behind the curve. The Fed last raised rates by half of a point in May 2000.
Bostic reiterated to the news outlet his call for three quarter-point interest rate increases in 2022, starting in March. But he didn’t rule out that a more aggressive approach was possible if the data evolves. Bostic said he would be watching for a deceleration in monthly consumer price gains and whether higher wages are meaningfully boosting prices. After more aggressive inflation fighting comments from Fed Chair Jerome Powell this past week, the market now expects the central bank to raise rates at least five times this year, up from four previously.
Report: Penalties for Unvaccinated Workers Gain Favor
47% of respondents in an Eagle Hill Consulting survey conducted in early January said unvaccinated employees should pay higher insurance rates. Gen Z workers were the least supportive of higher insurance rates (33% of respondents agreed), while Baby Boomers were significantly more supportive (53% of respondents agreed). The number is up from 41% in August 2020.
While insurance surcharges for tobacco users have paved the way and set a kind of precedent in this area, crafting insurance rate policies around vaccination status could require a higher compliance threshold. Furthermore, HIPAA and the Affordable Care Act generally prohibit group health plans from charging similarly situated individuals more for coverage (different premiums or contributions, or imposing different deductibles, copayments or other cost-sharing requirements) based on any health factor.
NYS Assembly Minority Task Force on Learning for Work Releases Final Report
In advance of the Joint Legislative Budget Hearing on Workforce Development yesterday, the Assembly Minority Task Force on Learning for Work released its final report after collecting feedback and data from stakeholders across New York. The report addresses mitigating the critical “middle-skills gap” hampering the labor force. Among the solutions and recommendations detailed in the report on how to best educate and prepare a workforce for the modern economy include, but are not limited to:
- Rebranding BOCES as Career Prep Centers and providing funding for marketing and signage replacement (A.8320, Barclay);
- Increasing the aidable salaries of CTE teachers, supervisors and other employees of a BOCES program that is an approved state expense for State School Aid;
- Enacting the Community College Merit and Mobility Scholarship program to incentivize attendance at state community colleges; and
- Providing additional transportation options for students interested in BOCES, including expanding programs within a student’s own school to ensure greater access to work-based learning programs.
Public Sector Unions Continue to Face Declines in Membership
Buffeted by Covid-induced economic lockdowns and a Supreme Court ruling that lets government workers decline to join or pay a fee to a union, membership in government labor groups plunged last year. Continuing a trend that began after the 2008–2009 recession, public-sector unions lost 191,000 members in 2021, according to Bureau of Labor Statistics data. The number of government workers enrolled in a union has now fallen below 7 million for the first time since 1998, and 33.9 percent of all government workers are now unionized, down from a high of 38.7 percent in 1994.
Government unions have lost members in eight of 12 years since the 2008–2009 recession, and total membership has declined by some 915,000 workers.
More Than 50 Starbucks Stores Now Petitioning to Unionize
Employees at more than 50 Starbucks locations have petitioned to unionize shortly after workers at a Buffalo, N.Y., store first voted to do so last month. Workers United, an affiliate of the Service Employees International Union that is organizing the Starbucks push, said Monday that an additional 15 locations filed for union elections with the National Labor Relations Board.
With the most recent announcement, 54 Starbucks locations in 19 states have petitioned to unionize, indicating that the organizing effort is spreading rapidly.
The Economist’s Excess Deaths Tracker
As covid-19 has spread around the world, people have become grimly familiar with the death tolls that their governments publish each day. Unfortunately, the total number of fatalities caused by the pandemic may be even higher, for several reasons. First, the official statistics in many countries exclude victims who did not test positive for coronavirus before dying—which can be a substantial majority in places with little capacity for testing. Second, hospitals and civil registries may not process death certificates for several days, or even weeks, which creates lags in the data. And third, the pandemic has made it harder for doctors to treat other conditions and discouraged people from going to hospital, which may have indirectly caused an increase in fatalities from diseases other than covid-19.
One way to account for these methodological problems is to use a simpler measure, known as “excess deaths”: take the number of people who die from any cause in a given region and period, and then compare it with a historical baseline from recent years. We have used statistical models to create our baselines, by predicting the number of deaths each region would normally have recorded in 2020 and 2021.
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