Durable Goods Orders Virtually Unchanged at $273.5 Billion in July
New orders for manufactured durable goods orders in the US stayed virtually unchanged at $273.5 billion in July, the US Census Bureau reported on Wednesday. This reading followed June’s 2.2% expansion and came in worse than the market expectation for an increase of 0.6%. Overall orders for durable goods—which include factory equipment, computers and washing machines—increased in nine of the past 12 months through July.
“Excluding transportation, new orders increased 0.3%,” the publication further read. “Excluding defense, new orders increased 1.2%. Transportation equipment, down following three consecutive monthly increases, drove the decrease, $0.6 billion or 0.7% to $93.0 billion.” The figures reflect continued demand from businesses and consumers—and rising prices. Orders figures aren’t adjusted for inflation, which ran near a four-decade high last month.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – The Guardian
- Defiant Ukraine Marks Independence Day Six Months After Invasion – Yahoo
- UK’s Boris Johnson, in Kyiv, Warns Against ‘flimsy’ Plan for Talks With Russia – Reuters
- Biden Pledges $3B Weapons Package to Ukraine to Mark Kyiv’s Independence Day – The Hill
- Ukraine Says Missile Strike Kills 15 as Country Marked Subdued Independence Day – WSJ
- ‘All of it is a Lie’: Russian Paratrooper Condemns his Country’s War in Ukraine – CNN
- How the Ukraine-Russia War Rattled Global Financial Markets – Reuters
- Ukraine Marks Subdued Independence Day With Charred Russian Vehicles – WSJ
- Video: Ex-CIA Director Predicts What’s Next in Russia-Ukraine War – CNN
- Sanctions-Hit Russia Sending Fuel Oil to Asia, Ship-to-Ship Terminals – Reuters
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Biden Announces $10K in Student Loan Debt will be Canceled for Borrowers Making Under $125K
President Biden on Wednesday announced he’s canceling $10,000 in student debt for Americans making under $125,000 a year. According to the details of the plan borrowers will have to pay no more than 5% of their discretionary income monthly on undergraduate loans, down from 10%, and will have their unpaid monthly interest covered as long as they’re making payments. It will also forgive loan balances after 10 years of payment for those with balances of $12,000 or less, down from 20 years. While the individual cap is $125,000, households earning under $250,000 will also be eligible.
The plan has faced criticism from Republicans, who have said it’s unfair to those who paid off their loans and is potentially dangerous to inflation, although student loan payments have been paused since early 2020. The Republican National Committee was already attacking the plan as a “handout to the rich” earlier this week.
Hochul: COVID Rules for Schools Will Ease this Fall
Officials plan to align New York’s pandemic rules for schools and other areas with updated guidelines released earlier this month by the Centers for Disease Control and Prevention. The development means students will no longer have to “test to stay” if exposed to COVID-19. Classrooms with COVID exposure will not be sent home. Students with COVID symptoms will still be advised to test and wear a mask.
Officials also do not expect the state to require masking indoors when schools reopen. Hochul, at a news conference Monday, acknowledged the toll of remote learning on students, especially lower-income kids, during the pandemic and that it is something officials do not want to repeat. “We are no longer keeping kids from essential of being together in a classroom because we are still dealing with the fallout,” Hochul said. “There was concern in classroom but we now have two years of experience. we know kids are safe in classroom and when traditional learning stops it can be devastating for the well being of those children.”
U.S. COVID – First Two Years of the Pandemic Caused 1.2 Million Excess Deaths in the US
In a recent study posted to the medRxiv pre-print server, researchers used seasonal autoregressive integrated moving averages to estimate excess mortality, defined as the difference between the number of observed and expected deaths in the US. The scientists calculated excess mortality stratified by age, region, gender, and ethnicity during the first two years of the coronavirus disease 2019 (COVID-19) pandemic.
The study results showed a more than 20% increase in all-cause deaths in the United States, resulting in nearly 1.2 million more deaths than expected in the first two years of the COVID-19 pandemic. Some age and ethnic groups suffered disproportionately; for instance, the young people, non-Hispanic Black and Hispanic people, and those living in the South showed a higher deviation in all-cause deaths relative to the historic US standards.
NYS COVID Update
The Governor updated COVID data through August 12.
- Daily: 20
- Total Reported to CDC: 73,214
- Patients Currently in Hospital statewide: 2,447
- Patients Currently in ICU Statewide: 239
7 Day Average Positivity Rate – Cases per 100K population
- Statewide 7.08% – 27.54 positive cases per 100,00 population
- Mid-Hudson: 5.71% – 26.88 positive cases per 100,00 population
Covid-19 Booster Campaign Is Expected to Launch Next Month
The Biden administration has completed plans for a fall Covid-19 booster campaign that would launch in September with 175 million updated vaccine doses provided to states, pharmacies and other vaccination sites. Administration officials have expressed hope that the boosters would help head off a wave of serious illnesses and deaths in the fall and winter, when cases often increase as more people gather indoors. Yet the campaign is expected to face challenges, including waning public interest in booster shots and a mutating virus that risks making even the tweaked boosters less effective.
The administration is procuring the doses, which drugmakers are updating to target the newest versions of the virus. The administration has also informed states, pharmacies and other entities they can begin preordering now through the end of August, according to the administration’s fall vaccination planning guide. Vaccines would be shipped immediately following an expected authorization by federal drug regulators.
Jerome Powell’s Jackson Hole Dilemma: What if the Drivers of Inflation Are Here to Stay?
Inflation talk is expected to dominate the Federal Reserve’s annual summer gathering in Jackson Hole, Wyoming, that starts today and runs until Saturday. The title of this year’s symposium is “Reassessing Constraints on the Economy and Policy.” Inflation is certain to be the hottest, although not the only topic discussed, and nearly every word published or spoken will be painstakingly parsed by traders and analysts for any hint of what it might indicate about the central bank’s policy trajectory.
“It’s interesting how this August speech of the Fed chair at Jackson Hole has become such an important platform for the Fed to influence market expectations about policy. It becomes a self-fulfilling prophecy,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution. Of particular interest to market participants is Fed Chair Jerome Powell’s keynote speech on Friday morning.
Releasing Employers’ 2016-2020 EEO-1 Reports…Unless You Object
The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) received a Freedom of Information Act (FOIA) request for detailed EEO-1 Report employee demographic information that thousands of U.S. employers submitted from 2016 through 2020. Unless these employers submit objections by September 19, OFCCP plans to release their currently non-public demographic employee data in response to the request.
While the FOIA request seeks only disclosure of EEO-1 Reports for federal contractors and first-tier subcontractors, OFCCP has not identified which specific employers it believes the request covers. As a result, employers that may not believe they are federal contractors, and do not consent to this disclosure, may consider objecting. According to OFCCP’s notice, any objection should also include answers to these questions to evaluate the application of FOIA Exemption 4
How Much Did Supply Constraints Boost U.S. Inflation?
What factors are behind the recent inflation surge has been a huge topic of debate amongst academics and policymakers. We know that pandemic-related supply constraints such as labor shortages and supply chain bottlenecks have been key factors pushing inflation higher. These bottlenecks started with the pandemic (lockdowns, sick workers) and were made worse by the push arising from increased demand caused by very expansionary fiscal and monetary policy.
Our analysis of the relative importance of supply-side versus demand-side factors finds 60 percent of U.S. inflation over the 2019-21 period was due to the jump in demand for goods while 40 percent owed to supply-side issues that magnified the impact of this higher demand.
The Great Resignation is Starting to Slow Down
The Great Resignation slowed this summer, with the number of U.S. workers leaving their employer dropping to 4.1% in July, down from 5.9% a year ago. But while the number of workers actually moving to new jobs sunk, that hasn’t stopped Americans from continuing to look around for a better job. The number of survey respondents who say they are actively searching for a new job in the past four weeks increased to 24.7% from 24.0% in July 2021, driven largely by workers under 45 and those with a college degree.
July’s churn rate, while down year over year, is still a slight increase over spring data that showed 3.4% of workers moved to a new employer in March, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data July 2022 SCE Labor Market Survey, which every four months surveys consumers’ experiences and expectations regarding the labor market. The overall quit rate has trended slightly down in recent months from the recent high in December 2021, according to the Bureau of Labor Statistics.
A Staggering Number of People are now Afraid of Losing Their Jobs
Accelerating layoffs and fears of an upcoming recession are causing employee anxiety about job security, new data finds. According to Lemon.io, a marketplace of vetted software developers, searches for “Will I lose my job in a recession?” are up a staggering 9,900% in the past 12 months. For the data, Lemon.io analyzed Google search trends to see how people were coping.
It’s undoubtedly been an employee-driven market in recent months, with scores of workers leaving their jobs in a phenomenon dubbed the Great Resignation. But as the economic climate shifts—inflation has been at a 40-year high, for instance—employee confidence is starting to shift too. A staggering number of employees are afraid of losing their jobs if a recession occurs, new data finds. That’s causing increased amounts of employee anxiety, says Aleksandr Volodarsky, CEO at Lemon.io.
The Surprise in a Faltering Economy: Laid-Off Workers Quickly Find Jobs
Companies in a broadening array of industries are announcing layoffs as they struggle with declining business activity, rising interest rates, high inflation and shifting consumer-spending habits. Ford Motor Co. confirmed Monday it is laying off roughly 3,000 white-collar and contract employees, and furniture company Wayfair Inc. recently said it was laying off 5% of its global workforce.
But one characteristic of today’s economy is that job cuts at small startups and large companies have yet to dent the overall labor market. Labor demand is still historically strong, offering only faint signs of cooling. There are nearly two job openings for every unemployed person seeking work. That means many workers who are losing their jobs are quickly landing jobs. Some are even weighing multiple offers and accepting positions that pay more and better align with their skills.
Japan Turns Back to Nuclear Power in Significant Policy Shift as Fuel Prices Soar
Prime Minister Fumio Kishida said Wednesday Japan will restart idled nuclear plants and consider developing next-generation reactors, in a policy reversal that will see the nation turn back toward atomic energy as fuel prices soar worldwide. Kishida told reporters he had instructed officials to come up with concrete measures by the end of the year.
The move is a significant shift for Japan, which has dialed back its use of nuclear power since 2011, when a tsunami triggered by a massive earthquake sent water crashing into the Fukushima Daiichi power plant — leading to the world’s worst nuclear disaster since Chernobyl in 1986. Since then, the public has been skeptical about nuclear power and Japan has made strict safety updates at plants throughout the country. In recent years the country has also imported greater amounts of natural gas and coal to meet its energy needs.
Department of Labor Accuses Second Alabama Hyundai Supplier of Employing Minors
Reuters reported Monday that the Department of Labor has accused a second Alabaman parts supplier with using child labor. The target of the lawsuit, SL Alabama LLC, is a U.S. supplier for Hyundai Motor Co., and the second Alabama-based Hyundai supplier in as many months to be accused of violating child labor practices.
According to the Department of Labor lawsuit, SL Alabama employed “minors under the age of 16” and engaged in “oppressive child labor,” which can refer either to employing children under 16 or children under 18 in notably hazardous environments like factories or mines. In a statement to the news organization Reuters, which broke the story, SL Alabama admitted to employing children at its Alexander City, Alabama factory but blamed the hires on an unidentified labor recruitment firm.
Honda Considering Decoupling Supply Chain from China, Report Says
Honda Motor Co. is considering building a separate supply chain that would reduce its dependence on China, the Sankei newspaper reported on Wednesday, in what would be a high profile move with global implications by a major Japanese manufacturer. Many big Japanese companies have built extensive production hubs in China but have recently seen output snarled by COVID-19-related lockdowns. There are also deepening worries about the impact of political tensions between the U.S. and China.
A Honda spokesperson said the Sankei report is not something announced by the company, adding it has been working on reviewing and risk-hedging its supply chain in general. Nearly 40 percent of Honda’s automobile production took place in China in the last financial year.
Against Expectations, Global Food Prices Have Tumbled
Last week wheat futures in Chicago, for delivery in December, dropped to $7.70 per bushel, far below the $12.79 they reached three months earlier and back to their level in February. Corn is also back to its pre-war price. Meanwhile, palm oil, found in thousands of dishes from ice cream to instant noodles, has dropped not only back to its pre-war price, but to below it.
The recent deal brokered by the United Nations, allowing Ukrainian grain exports to leave the port of Odessa, can only explain a fraction of the shift: it was inked in late July, after most of the decline in prices. More can be credited to the strength of Russian wheat exports. America’s agriculture department suggests that Russian farms, far from being disrupted, will export a record 38m tonnes in 2022-23, some 2m tonnes more than they managed the previous year. A bumper harvest is under way, in part due to good weather earlier in the year, and there is strong demand from traditional importers in north Africa, the Middle East and Asia.