About 37% of small businesses, which between them employ almost half of all Americans working in the private sector, were unable to pay their rent in full in October. That’s according to a survey from Boston-based Alignable, a network of 7 million small business members. It’s up seven percentage points from last month and is now at the highest pace this year, the survey showed.
For up-to-date workplace and worker information visit: https://saferatwork.covid19.ca.gov/
For vaccination information, including scheduling visit https://covid19.ca.gov/vaccines/
COVID-19 Update for February 6, 2023-Biden Administration to End COVID Emergency Declaration, Cases, the Economy, LA County Grant and More
From The New York Times: The Biden administration plans to let the coronavirus public health emergency expire in May, the White House said on Monday, January 30th, a sign that federal officials believe the pandemic has moved into a new, less dire phase.
The White House wants to keep the emergency in place for several more months so hospitals, health providers and health officials can prepare for a host of changes that will come when it ends, officials said. Millions of Americans have received free Covid tests, treatments and vaccines during the pandemic, and not all of that will continue to be free once the emergency is declared over.
The White House said on Monday that the nation needed an orderly transition out of the public health emergency. The administration said it also intended to allow a separate declaration of a national emergency to expire in May.
The Biden administration has renewed the public health emergency every 90 days, and it had pledged to alert states 60 days before ending it. It last renewed the public health emergency this month, and the declaration is set to expire in mid-April. The administration now plans to extend it for an additional month before allowing it to lapse in May.
California's coronavirus emergency declaration will expire on Feb. 28, almost three years after it began. It gave Gov. Gavin Newsom broad power to issue mandates intended to slow the spread of the virus, as well as to bypass certain state laws. He announced in October that he would end the emergency in February, and a spokesperson from his office confirmed on Wednesday that that’s still his plan.
Barbara Ferrer, the Los Angeles County public health director, recently said that she had started eating indoors at restaurants — for the first time since the pandemic began.
The coronavirus is unlikely to burn out altogether, and it’s possible that the emergence of new variants could lead to another big surge, Brewer told me. But for now, he said, the virus seems likely to follow a pattern similar to influenza — circulating year-round and peaking in the colder months.
As for the statewide emergency declaration, Newsom’s administration said it would seek legislative approval to make two of the emergency provisions permanent: allowing nurses to continue to dispense Covid medications like Paxlovid, and allowing lab workers to process Covid-19 tests on their own.
The latest sign that California is easing out of the pandemic and into the endemic phase: The state has dropped its plan to require the COVID-19 vaccination for K-12 students as the state of emergency comes to an end Feb. 28, after nearly three years.
Pasadena Public Health reported 12 new COVID-19 cases on February 2nd. There were no reported fatalities.
Los Angeles County reported 1,321 new cases on Groundhog Day (2/2) and 14 deaths related to COVID-19.
Three years into the pandemic, it has become evident that Covid-19 isn’t going anywhere, and neither are vaccine boosters. Last week, an advisory committee to the Food and Drug Administration unanimously agreed that the vaccine and booster process for Covid-19 needs to be simplified in terms of which version of the shot is offered and when and how often people should receive it. There was less consensus about what that simplified process will look like.
When the bivalent booster, which targets both the original coronavirus strain and the BA.4/BA.5 Omicron subvariants, was rolled out in September 2022, there was little data about how well it would work. But the basis for the decision was relatively clear: The virus is evolving, and so should the vaccine. Over the past few months, as the results of initial studies have come in, the picture has gotten murkier.
The good news is the bivalent booster does appear to provide protection against severe infection, which is critical for high-risk individuals. It “is doing a much better job of protection, both for symptomatic infections” and hospitalizations, said Dr. Eric Topol, executive vice president of Scripps Research.
For people who are high-risk — namely adults age 50 and older and people who are immunocompromised or have an underlying condition — the evidence is straightforward: If you haven’t gotten the bivalent booster, you should. Just make sure it’s been at least three months since your last shot or Covid infection.
Supporting this recommendation is data presented by Pfizer and Moderna at the F.D.A. meeting, along with four studies published in January in The New England Journal of Medicine. That research found that people who received the bivalent booster had an increase in antibody levels. This suggests it improved immune defenses against the virus, but it didn’t protect against the new strains as well as it did against the old ones.
The biggest jump was in antibodies that target the original strain of the coronavirus (although that version is no longer circulating, so it’s unclear how helpful those antibodies are). Antibodies that target BA.5, which was the dominant strain last summer and fall, also increased substantially. The smallest boost was seen for antibodies that defend against some of the newer Omicron subvariants that have more antibody-evading mutations, such as BQ.1.1 and XBB (the current dominant strain, XBB.1.5, wasn’t circulating when the experiments were conducted).
When it comes to protecting against severe disease, the bivalent booster fares well in the real world, research from the Centers for Disease Control and Prevention shows. One study found that it was at least 38 percent effective at preventing hospitalization for Covid-19, and the more time that had passed since someone’s previous vaccine dose, the more the bivalent booster helped. Similarly, a second study, focusing on adults 65 and older, found that people who had received the bivalent booster an average of 30 days prior were 73 percent less likely to be hospitalized than those who’d received only the original vaccine or the vaccine plus the initial single-strain (or monovalent) booster an average of nearly a year prior.
The boosters also appear to be safe in an overwhelming majority of cases. Last month, the F.D.A. and C.D.C. issued a joint statement that said there was preliminary evidence the bivalent booster may raise the risk of stroke in adults over the age of 65. However, updated data revealed that it was because the comparison group had fewer strokes than normal, not because the recently boosted group had more.
If you’re low-risk, recommendations are less clear
For people who are under 50 and don’t have an increased risk of severe disease, there’s more of a debate about whether another shot is worth it. The booster is still effective, but getting it is less critical.
Los Angeles Country announced the launch of a new Economic Opportunity Grant (EOG) program, which will distribute more than $54 million across 6,800 grants to small and microbusinesses and nonprofit agencies, prioritizing the most COVID-impacted and highest-need communities and organizations in LA County. Phase One, now accepting applications, targets microbusinesses with under $50k in revenue and will award grants of $2,500 per grant, funded by the California Office of the Small Business Advocate.
Interested applicants can visit grants.lacounty.gov today.
Stay tuned for launch of Phase Two in February 2023. Grants in Phase 2, funded by the American Rescue Plan Act (ARPA) will award $15,000 or $20,000 per grant for small businesses, and $20,000 or $25,000 per grant for non-profits. EOG will run through May 2023 or when available funds are expended.
US unexpectedly adds 517,000 jobs in January: US jobs growth unexpectedly rebounded in January, underscoring the momentum in the economy despite the Federal Reserve’s efforts to damp demand.
The US Federal Reserve increased its benchmark rate by a quarter of a percentage point on Wednesday, marking a return to slower, more orthodox rate rises after it ratcheted up the cost of borrowing last year.
The European Central Bank raised interest rates by half a percentage point on Thursday, in a sign of its concern that inflation will remain high despite the recent fall in energy prices.
The Bank of England has increased interest rates by half a percentage point to a 15-year high of 4 per cent, even as it signalled that further rises would depend on economic data.
From PasadenaNOW and CalMatters: Last year was a strong one for California’s $3.4 trillion economy.
The state added 621,400 jobs, finally regaining the nearly 3 million that were initially lost during the COVID-19 pandemic as Gov. Gavin Newsom shut down major economic sectors. The year ended with a near record-low 4.1% unemployment.
All good. In fact, some economists believe that California’s job growth is so strong that only a shortage of workers – due to a decline in the number of Californians seeking work – is a major impediment to expansion.
That’s the economic upside.
The downside is that no one seems to know whether the good times will continue or the state will experience one of its periodic recessions, which tend to hit about once a decade.
It’s not yet clear whether the system’s efforts will work as planned and economists are mixed in their projections of what lies ahead economically for the nation, not only because of the Federal Reserve’s actions but other factors, such as the war in the Ukraine.
Newsom’s proposed 2023-24 budget reflects that uncertainty.
“The biggest economic threat is continued inflation,” an analysis by the Public Policy Institute of California contends. “While December consumer data marked six straight months of slowing inflation, prices have not yet abated enough. Until that happens, the Federal Reserve will likely continue to take steps to slow the economy, increasing the risk of a recession.”
The most powerful engine of California’s economy, and therefore of the state’s revenue stream, is the Bay Area-centered technology industry, whose major firms are sharply reducing payrolls through layoffs after expanding during the pandemic to serve the shift to work-at-home employment.
Despite the layoffs, the region was still adding jobs during December – in fact 84% of the jobs California gained during the month, which attests to the mixed economic signals the state is experiencing.
“We don’t see anything catastrophic happening with tech,” Patrick Kallerman, vice president of research with the Bay Area Council Economic Institute, said. “I don’t see the tech industry collapsing.”
While economists debate over the economic future and Capitol politicians dicker over how to deal with the projected deficit, their constituents are turning sour.
A November poll by the Public Policy Institute of California found high pessimism about the economy with 69% of Californians surveyed saying they expect bad times in the next year and 62% expecting periods of higher unemployment during the next five years.
The eurozone looks set to avoid a recession after its economy grew unexpectedly during the final quarter of 2022, despite soaring energy prices, rising borrowing costs and record high inflation.
The International Monetary Fund said on Monday that it expected the global economy to slow this year as central banks continued to raise interest rates to tame inflation, but it also suggested that output would be more resilient than previously anticipated and that a global recession would probably be avoided.
The I.M.F. upgraded its economic growth projections for 2023 and 2024 in its closely watched World Economic Outlook report, pointing to resilient consumers and the reopening of China’s economy as among the reasons for a more optimistic outlook.
The fund warned, however, that the fight against inflation was not over and urged central banks to avoid the temptation to change course.
Global output is projected to slow to 2.9 percent in 2023, from 3.4 percent last year, before rebounding to 3.1 percent in 2024. Inflation is expected to decline to 6.6 percent this year from 8.8 percent in 2022 and then to fall to 4.3 percent next year.
After a succession of downgrades in recent years as the pandemic worsened and Russia’s war in Ukraine intensified, the I.M.F.’s latest forecasts were rosier than those the fund released in October.
COVID-19 Update for January 30, 2023-Cases Waning? The Economy and MoreCASES: from PasadenaNOW: On the third anniversary of the first confirmed COVID-19 infection in Los Angeles County, the public health director reported declining overall infection statistics, while continuing to preach vigilance to avoid spreading the virus to vulnerable populations.
Barbara Ferrer told reporters Thursday during a briefing that the county over the past week averaged 960 new COVID infections per day, a dramatic drop from the beginning of the month, when 2,400 new cases were being reported.
She again warned however, that “with home testing and with people not testing … many cases go uncounted,” meaning there are more infections in the community than the official numbers reflect.
COVID-related hospitalizations also continue to fall, with the county averaging 104 new admissions per day aver the past week, a roughly 50% drop from 211 per day in early January. One number that remains elevated, however, are daily virus-related deaths. The county is averaging 19 deaths per day, according to Ferrer, who said the number has hovered around 20 per day for nearly a month. She has stressed that older residents, particularly those 80 and over, remain vulnerable to severe illness and death from the virus. She urged people to continue exercising caution around vulnerable populations, including wearing masks.
With the county moving into the “low” virus-activity level, as defined by the U.S. Centers for Disease Control and Prevention, wearing masks indoors is now a matter of personal preference.
Masks are still required indoors at health-care and congregate-care facilities in the county, and for anyone exposed to the virus in the past 10 days, and at businesses where they are required by the owner. Ferrer said masks are highly recommended for high-risk individuals, and for people riding public transit.
The county on Thursday reported 1,095 new COVID cases, lifting the cumulative official total from throughout the pandemic to 3,672,125.
The number of COVID-positive patients in county hospitals was 729 as of Thursday, down from 755 a day earlier. Of those patients, 90 were being treated in intensive care units.
The seven-day average daily rate of people testing positive for the virus was 5% on Thursday, holding roughly steady from the past week.
COVID numbers improve, spurring optimism-State is eluding winter wave of infections and hospitalizations, but caution is still urged. By Luke Money and Rong-Gong Lin II for the LA Times.
In the first two years of the COVID-19 pandemic, winter holidays were marred by a pair of devastating waves that ripped through California, sending case counts soaring, residents to the hospital in droves and, ultimately, leaving thousands dead.
But the third winter seems to have escaped that fate. A late autumn upswing in transmission, which picked up steam after Thanksgiving, began to dissipate in mid- to late December instead of becoming the runaway train public health officials had feared. And in a stark departure from previous years, COVID-19 metrics have continued to improve in the weeks since.
Officials emphasize that the danger is not past — especially for those at higher risk of developing severe illness. There’s also a chance another problematic variant could emerge. Officials are keeping a close eye on XBB.1.5, which has been described as the most infectious edition of the virus yet.
But the fact that California navigated what was, for many, the closest thing to a normal holiday season since 2019, without a record-setting spike in infections or surge in hospitalizations, is cause for optimism — and it underscores the power of the tools at our disposal, experts say.
How did this happen?
Many residents probably enjoyed some degree of protection against the coronavirus because they have been vaccinated, previously infected or both. This means some were able to avoid being infected, while others’ immune systems were better primed to ward off severe illness.
Anti-COVID drugs — including Paxlovid and another oral medication known as molnupiravir — also probably helped by keeping higher-risk individuals from falling seriously ill.
Bivalent boosters, formulated specifically to help protect against the Omicron subvariants that have dominated in the last year, also became available in September. Uptake has been too slow for some officials’ liking, but almost 24% of eligible Californians have received the updated dose.
What do numbers show?
Case counts across California have dropped steadily since the first week of December, and so have coronavirus levels in wastewater.
In L.A. County, wastewater levels began declining in early December, although in recent weeks, they have plateaued at about 70% of last summer’s peak — still a high level of concern, as defined by health officials.
Other metrics also lend credence to the concept that coronavirus activity has slowed.
Modeling from the California Department of Public Health estimates that the spread of COVID-19 is probably decreasing statewide and has been trending downward or stable for the last month.
What about hospitals?
Though many infected with the coronavirus experience mild symptoms, or none at all, any pronounced uptick in transmission threatens to send a new wave of patients to hospitals. In 2020–21 and 2021–22, these deluges were massive and put immense pressure on healthcare systems across the state.
Although California did see a pronounced uptick in coronavirus-positive hospitalizations starting in late October and continuing through mid-December, that census has since plummeted.
On Thursday, 3,168 such patients were hospitalized statewide — a 29% drop in the last two weeks.
That figure includes those hospitalized with COVID-19-related illnesses and those who test positive incidentally after seeking care for some other reason.
With last week’s update, 71% of Californians now live in counties with a low COVID-19 community level, up from 28% the prior week.
Deaths remain a concern- As of Jan. 10, California was reporting 355 COVID-19 deaths per week.
Although that has increased lately, it remains below the summer peak of 396 and far below last winter’s peak, when 1,827 deaths were recorded for the week ending Feb. 27. More than 98,000 Californians have died from COVID-19, a toll that exceeds the entire population of cities such as Santa Monica, Mission Viejo and Redding.
Nationally, COVID-19 is responsible for far more deaths than flu. The CDC has reported more than 44,000 COVID-19 deaths since the start of October, more than double the estimated 17,000 from flu .
The Economy: US growth slowed less than expected in fourth quarter-US growth slowed marginally to 2.9 per cent on an annualised basis in the last quarter of 2022, as the country’s economy proved more resilient than expected after interest rate rises.
For more than a year now, the U.S. economy has faced two fundamental, interwoven challenges: Consumers wouldn’t stop spending, and prices wouldn’t stop rising.
Both trends are now showing early signs of reversing.
Consumer spending fell in both November and December, the Commerce Department said on Friday, as shoppers pulled back amid rising prices, dwindling savings and warnings of a looming recession.
Inflation is also easing: Consumer prices rose 5 percent in the year through December, according to the Federal Reserve’s preferred measure. While still much more rapid than normal, that was the slowest pace in more than a year.
Taken together, the figures paint a picture of an economy that is, at long last, coming off the boil. From the Fed’s perspective, that is good news: The central bank has spent the past year aggressively raising interest rates in an effort to force consumers and businesses alike to pull back their spending, which should result in slower price increases. Now there is mounting evidence those efforts are bearing fruit.
COVID-19 Update for January 23, 2023-Cases, The Economy and MoreCases: Pasadena reported 12 new COVID cases on January 19th. There were no new fatalities. To date, Pasadena has seen 39,063 cases among our population of about 142,000 and 440 deaths due to the disease.
On January 19th, Los Angeles County reported 1,502 new cases and 31 deaths due to COVID.
In positive sign, L.A. avoids spike in COVID cases-Unlike previous two winters, post-holiday wave of infections does not materialize. By Luke Money and Rong-Gong Lin II for the LA Times.
In a continuing sign of improvements in coronavirus case counts and hospitalizations, Los Angeles County on Thursday officially entered the low COVID-19 community level, indicating that the pandemic is not exerting undue stress on the local healthcare system.
Recent metrics illustrate a “very different January than expected,” a top health official said this week, with continued steady improvements in data instead of a feared post-holiday spike.
Though some figures may be affected by lags in data over the Martin Luther King Jr. holiday weekend, the county has seen marked improvement in its pandemic metrics. And with the winter holidays behind us, it’s increasingly apparent that a much-discussed double COVID wave fueled by gatherings and travel has not materialized.
There are a number of possible reasons. Some people who were infected may have had mild symptoms or none at all, so they didn’t test. Others may have used an at-home kit to confirm their infection, the results of which are not always reported.
It’s also likely many residents remain well-protected, either because they recently were vaccinated or recovered from a coronavirus infection.
Behavioral changes — such as moving gatherings outside, testing before events, wearing a mask in indoor public settings and doubling down on handwashing and other health hygiene efforts — also may have played a role.
L.A. County health officials urged residents returning to work or school post-holidays to mask up for at least 10 days in a bid to stunt potential spread. Ferrer has said she thinks expanded masking, even on a temporary basis, can play a pivotal role in tamping down transmission.
However it happened, it’s apparent this sustained downturn is not merely the byproduct of data haziness.
Even case counts have dropped. For the week that ended Thursday, L.A. County was reporting an average of 1,095 coronavirus cases a day. On a per capita basis, that’s 76 cases a week for every 100,000 residents — a rate that’s considered “substantial” but no longer “high.” It’s the first time since mid-November the case rate in L.A. County has dropped from the “high” rate.
The case rate has fallen 41% from the prior week, although it’s likely some of that dramatic decline is due to delayed reporting over the MLK weekend.
The low COVID-19 community level indicates that the burden of the pandemic on hospitals is relatively mild.
L.A. County was one of 14 California counties to transition into the low COVID-19 community level Thursday. In Southern California, Ventura County made the same transition, and elsewhere were Alameda, Contra Costa, Fresno, Kern, Sonoma, Marin, Butte, Madera, Kings, Humboldt, Tehama and Glenn counties.
Elsewhere in Southern California, San Diego, Orange and Imperial counties remained in the medium level, and Riverside, San Bernardino, Santa Barbara and San Luis Obispo counties remained in the low COVID-19 community level.
With this week’s update, 71% of Californians now live in counties with a low COVID-19 community level. For the prior week, 28% of Californians did so.
The number of coronavirus-positive patients hospitalized statewide has plummeted since the year began. As of Wednesday, 3,372 such patients were hospitalized statewide, the lowest since late November and a 26% decrease from two weeks ago. Figures include both those admitted specifically for COVID-19 and those who test positive incidentally after seeking care for another reason.
The peak number of coronavirus-positive hospitalizations this winter was 4,648 on Jan. 3. That’s a little less than the summer peak of 4,843, set July 26.
If there’s no significant resurgence of COVID-19 later this winter, it will be the first time since the pandemic began that a fall-and-winter wave was less severe than the preceding summer’s, in terms of hospitalizations.
Modeling from the California Department of Public Health also estimates that the spread of COVID-19 is probably decreasing statewide and has been trending downward or stable for the last month.
L.A. County mirrors the statewide trends. The 918 coronavirus-positive patients hospitalized as of Wednesday is down 29% from two weeks ago.
The county’s fall-and-winter hospitalization peak came Dec. 8, when 1,308 coronavirus-positive patients were in the hospital. That was also slightly less than the summer peak of 1,329.
The state of the virus from the New York Times: By Jonathan Wolfe-It’s a confusing time in the pandemic.
For those of us who track the virus, we’re used to looking at a bunch of signals and trying to discern where things are headed. But over time, those signals have gotten more complicated — especially as some states have begun reporting their Covid data less frequently or reliably.
One thing seems likely: This winter will not look like last year, when Omicron drove up cases, hospitalizations and deaths into the stratosphere — an anomaly that some experts say we may never see again. Instead, the winter of 2023 in the U.S. will likely be defined by the strength of XBB.1.5, a highly contagious and immune- evasive Omicron subvariant that’s gaining ground across the country.
Today, we’re taking a look at what the Covid data is telling us, and the forces that may shape the pandemic this winter.
Signs in the Northeast-Coming out of the holidays, the country saw a large uptick in cases, hospitalizations and deaths, and it looked like we were possibly headed for another deadly winter wave. But in recent days, cases and hospitalizations have begun to level off or come down nationally.
Consider the Northeast: The Omicron subvariant XBB.1.5 was first discovered in New York in the fall, and for the last month or so it has been driving up cases and hospitalizations in the region. The subvariant now makes up about 83 percent of cases in the Northeast, according to C.D.C. data.
But over the last 10 days or so, those trends have started to reverse. Wastewater data show cases in the region dropping, and hospitalizations have also begun to decline.
“In New York, I do think it’s reasonable to say that XBB.1.5 has peaked in terms of infections and hospitalizations,” said Dr. Ashish Jha, the White House coronavirus response coordinator. “That is all heartening and important, and I do think that it says that XBB.1.5 is certainly not leading to a major wave in the Northeast.”
While that might be positive news for the region, most of the rest of the country has yet to have its own turn with the new variant, and when it spreads it will likely lead to an increase in cases, hospitalizations and deaths.
“I think based on everything we know right now, I don’t think we’re expecting some major waves because, again, we didn’t see it in the Northeast,” Dr. Jha said.
The best estimates from the White House as to how many people are currently infected, Dr. Jha said, is at about the same level as during the BA.5 wave this summer, but with much less severe outcomes.
“What you’re seeing is a transition to ongoing transmission but much milder infections,” Dr. Céline Gounder, a senior fellow at the Kaiser Family Foundation, told my colleagues at The Morning.
Tracking hospitalizations, it looks as though the wintertime surge of 2022-23 is less severe than winter surges in the past two years.
Data is through Jan. 12, 2023; chart shows a seven-day daily average. | Source: U.S. Department of Health and Human Services
That said, our death rate is still way too high — we’re averaging about 540 deaths per day. Dr. Jha told me that many of those deaths are the result of the increase in infections during the holidays, and that “almost all of them are people who are either not up-to-date on their vaccines, or did not get treated, and often, both.”
While recent signs out of the Northeast are trending positive, there’s a new curveball that’s disrupting our understanding of the pandemic this year: viral interference.
It’s the theory that when we have multiple viruses during a season — as we did this year with R.S.V., the flu and Covid — they won’t peak at the same time.
“The idea is that you’re going to see viruses take turns, one after the other,” said my colleague Apoorva Mandavilli, a science reporter who tracks the virus. “That’s because when our bodies are exposed to one virus, our immune systems go on high alert, and we are better able to defend against viruses.”
This year, R.S.V. surged and peaked in mid-November. The flu peaked next, reaching highs in December. “So now with Covid we have to wait and see,” Apoorva said, “because last year, by this time, Omicron was blazing but that may all just be pushed out this year because R.S.V. and flu were there first.”
The Economy: From PasadenaNOW: Los Angeles County’s seasonally adjusted unemployment rate fell slightly to 4.7% in December, down from a revised 4.8% in November, according to figures released Friday by the state Employment Development Department. The 4.7% rate was below the 6.8% rate in December 2021.
In Orange County, where seasonally adjusted numbers were not available, the December unemployment rate was 2.5%, down from 3% in November.
Statewide, the seasonally adjusted unemployment rate was 4.1% in December, 4.1% in November and 5.8% in December 2021. The comparable figures for the nation were 3.5% in December, 3.6% in November and 3.9% in December 2021.
Total nonfarm employment in Los Angeles County decreased by 7,600 positions between November and December to reach more than 4.6 million.
The information sector showed the biggest dropoff, shedding 8,800 jobs, mostly in the motion picture and sound recording industries, according to the EDD.
December’s monthly decline in the consumer price index gets the Federal Reserve a step closer to beating inflation, though they’re highly unlikely to signal an easing of policy anytime soon. The key inflation gauge fell 0.1% for the month, in line with market expectations and was the biggest drop since April 2020.
Though the CPI for all items is still 6.5% ahead of where it was a year ago, the arc has been steadily lower — from its peak at around a 9% annual rate in June 2022 — amid a sharp drop in gas prices and some serious interest rate increases from the Fed.
The question now is how much more evidence policymakers will need to see before they take their foot off the brake.
Prices for wholesale goods and services fell sharply in December, providing another sign that inflation, while still high, is beginning to ease.
The producer price index, which measures final demand prices across hundreds of categories, declined 0.5% for the month, the Labor Department reported Wednesday. Economists surveyed by Dow Jones had been looking for a 0.1% decline. The decline was the biggest on a monthly basis since April 2020.
Excluding food and energy, the core PPI measure rose 0.1%, matching the estimate. For the year, headline PPI rose 6.2%, the lowest annual level since March 2021 and down considerably from the 10% annual increase in 2021. A sharp drop in energy prices helped bring the headline inflation reading down for the month. The PPI’s final demand energy index plunged 7.9% on the month. Within that category, wholesale gasoline prices fell 13.4%. The final demand food index also fell, declining 1.2%.
The U.S. unemployment rate declined overall in December, but rose for Black women and Hispanic men, according to the latest nonfarm payrolls report.
Black women saw unemployment increased to 5.5% last month, up 0.3 percentage points from 5.2% in November, data from the Labor Department showed Friday. Overall, Black employment held steady at 5.7%, while the unemployment rate for Black men actually declined to 5.1% from 5.4% last month.
Meanwhile, Latino men saw unemployment rise to 4% in December, an increase of 0.4 percentage points from 3.6% the prior month. The overall unemployment rate ticked up to 4.1% from 4.0%. Unemployment among Latino women also ticked up to 3.7% from 3.6%.
Those figures bucked the trend in the broader economy, which showed unemployment in the U.S. fall to 3.5% from 3.7%. It was 0.2 percentage points below consensus expectations from the Dow Jones.
A stronger-than-expected December jobs report continued to suggest a robust labor market, even as lighter-than-expected wage growth fanned some investor hopes that inflation may be coming down.
Nonfarm payrolls rose by 223,000 in December, more than the Dow Jones estimate of 200,000. Meanwhile, average hourly earnings rose 0.3% for the month and gained 4.6% from a year ago. These are compared to estimates of 0.4% and 5% increases.
Federal Reserve Chairman Jerome Powell has tested positive for Covid-19, the central bank announced Wednesday morning. Powell, 69, is “experiencing mild symptoms,” according to the announcement. “Chair Powell is up to date with COVID-19 vaccines and boosters. Following Centers for Disease Control and Prevention guidance, he is working remotely while isolating at home,” a news release said.
The clock is ticking for the U.S. to avoid a default on its debt, and some are sounding the alarm about potential disruptions to Social Security and Medicare. On Thursday, Jan. 19, the U.S. outstanding debt hit its statutory limit. The debt limit or debt ceiling is the total amount of money the U.S. can borrow to meet its legal obligations including Social Security and Medicare benefits, as well as military salaries, tax refunds, interest on the national debt and other payments.
On Thursday, the U.S. began taking “extraordinary measures” to avoid defaulting on its obligations, Yellen wrote in an updated letter to congressional leaders.
“We’re looking at as early as June for a train wreck on this issue,” said Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.
“The consequences are dire, because a default would not only disrupt Social Security and Medicare benefits, but also cause a global economic recession or worse,” he said.
How benefit payments could be delayed: If the U.S. were to default on its debt, it would be unprecedented. The big question is whether the Treasury Department would be able to prioritize what does and does not get paid if that occurs. Unlike a government shutdown, where Social Security and Medicare benefits continue to flow, that may not be the case with a default, according to Adcock.
“There’s a good chance that benefits for retirees and people with disabilities and survivors would be disrupted,” he said.
Even a short delay could interfere with beneficiaries’ ability to pay for health care, food, rent, utilities or other necessary expenses, the National Committee to Preserve Social Security and Medicare said in a statement on Thursday.
The World Bank slashed its global growth forecasts from projections it made in mid-2022 on the back of what it sees as broadly worsening economic conditions.
The international development institution downgraded almost all of its forecasts for advanced economies in the world, cutting its growth outlook for the global economy to 1.7% for 2023, it said in its latest report, Global Economic Prospects. The organization earlier projected the world economy to expand by 3% in 2023.
The adjustment was led by a significant downgrade to its prospects for the U.S. economy — it now forecasts 0.5% growth from an earlier projection of 2.4%.
The World Bank cut its growth outlook for China for 2023 from 5.2% to 4.3%, Japan from 1.3% to 1% , and Europe and Central Asia from 1.5% to 0.1%.
COVID-19 Update for January 2, 2023-Cases, COVID History, Health Orders, the Economy, Prognostications from Around the World and More
Yes, we are beginning 2023 and still reporting on COVID-19, its effects and impact on our economy three (!) years after the first likely cases in China (and perhaps in the US, too).
So, where have we come in the past three years?
An edited timeline:
- December 12, 2019-A cluster of patients in China’s Hubei Province, in the city of Wuhan, begin to experience the symptoms of an atypical pneumonia-like illness that does not respond well to standard treatments.
- December 31, 2019- The World Health Organization (WHO) Country Office in China is informed of several cases of a pneumonia of unknown etiology (cause) with symptoms including shortness of breath and fever occurring in Wuhan, China. All initial cases seem connected to the Huanan Seafood Wholesale Market.
- January1, 2020-The Huanan Seafood Wholesale Market in Wuhan is closed amid worries in China of a reprise of the 2002–2004 SARS (Severe Acute Respiratory Syndrome Coronavirus or SARS-CoV-1) outbreak.
- January 3, 2020- China informs WHO that they have identified over 40 cases of pneumonia of unknown etiology.
- January 5, 2020- As the disease spreads in Wuhan, Chinese public health officials share the genetic sequence of the atypical pneumonia virus, Wuhan-Hu-1, with the rest of the world through an online database.
- January 7, 2020-Public health officials in China identify a novel coronavirus as the causative agent of the outbreak.
- CDC establishes an incident management structure to guide their response to the novel coronavirus by following the preparedness plan for developing tests and managing cases made for Middle East Respiratory Syndrome Coronavirus (MERS-CoV).
- January 10, 2020-WHO announces that the outbreak in Wuhan, China is caused by the 2019 Novel Coronavirus (2019-nCoV).
- January 13, 2020-The Thailand Ministry of Public Health confirms the first laboratory-confirmed case of the SARS-CoV-2 virus outside of China.
- January 14, 2020-WHO finds evidence of possible human-to-human transmission of the SARS-CoV-2 virus, but WHO scientists say that human-to-human transmission is not surprising given our knowledge of respiratory pathogens.
- January 15, 2020-The Japanese Ministry of Health, Labor and Welfare reports an additional laboratory-confirmed case of the SARS-CoV-2 virus outside of China.
- January 17, 2020-CDC begins screening passengers for symptoms of the 2019 Novel Coronavirus on direct and connecting flights from Wuhan, China to San Francisco, California, New York City, New York, and Los Angeles, California and plans to expand screenings to other major airports in the U.S.
- January 19, 2020-Worldwide, 282 laboratory-confirmed cases of the 2019 Novel Coronavirus have been reported in four countries: China (278 cases), Thailand (2 cases), Japan (1 case) and the Republic of Korea (1 case).
- January 20, 2020-CDC reports the first laboratory-confirmed case of the 2019 Novel Coronavirus in the U.S. from samples taken on January 18 in Washington state and on the same day activates its Emergency Operations Center (EOC) to respond to the emerging outbreak.
- January 21, 2020-Chinese government officials confirm that human-to-human transmission is driving the spread of the SARS-CoV-2 virus in China.
- January 23, 2020-Wuhan, China— a city of 11 million people— is placed under lockdown due to the 2019 Novel Coronavirus outbreak.
- January 24, 2020-CDC confirms a travel-related infection of the SARS-CoV-2 virus in Illinois, bringing the total number of cases in the U.S. to two.
- January 26, 2020-CDC confirms additional travel-related infections of the SARS-CoV-2 virus in Arizona and California, bringing the total number of cases in the U.S. to five.
- January 27, 2020- The U.S. Food and Drug Administration (FDA) announces that it will take “critical actions to advance development of novel coronavirus medical countermeasures” with interagency partners, including CDC.
- January 28, 2020-CDC issues a Level 3 Travel Health Notice— advising travelers to avoid all non-essential travel to China due to the 2019 Novel Coronavirus outbreak.
- The U.S. government relocates U.S. citizens from Wuhan, China back to the U.S. due to the 2019 Novel Coronavirus (2019-nCoV).
- January 30, 2020-CDC confirms that the SARS-CoV-2 virus has now spread between two people in Illinois with no history of recent travel. This is the first recorded instance of person-to-person spread of the 2019 Novel Coronavirus in the U.S and brings the total number of cases up to seven.
- January 31, 2020-CDC issues 14-day federal quarantine orders to all 195 U.S. citizens who were repatriated back to the U.S. on January 29, 2020, from Wuhan, China.
- WHO’s International Health Regulation Emergency Committee reconvenes early to declare the 2019 Novel Coronavirus outbreak a Public Health Emergency of International Concern (PHEIC).
- The Secretary of the Department of Health and Human Services (HHS), Alex Azar, declares the 2019 Novel Coronavirus (2019-nCoV) outbreak a public health emergency.
- February 3, 2020-The Department of Homeland Security (DHS) directs all flights from China and all passengers who have traveled to China within the last 14 days to be routed through one of eleven airports in the U.S. for enhanced screening procedures and possible quarantine.
- CDC submits an emergency use authorization (EUA) to FDA to expedite approval for a CDC developed SARS-CoV-2 diagnostic test.
- February 10, 2020-Worldwide deaths from the 2019 Novel Coronavirus reach 1,013. The SARS-CoV-2 virus has now killed more people than the severe acute respiratory syndrome (SARS-CoV-1) outbreak, which claimed 774 lives globally from November 2002 to July 2003.
- February 11, 2020-WHO announces the official name for the disease that is causing the 2019 Novel Coronavirus outbreak: “COVID-19.” The new name of this disease is an abbreviated version of “Coronavirus Disease 2019.”
- February 13, 2020-CDC confirms the 15th case of COVID-19 in the U.S.
- February 18, 2020-Due to the high case load and numbers of asymptomatic individuals testing positive for COVID-19, all passengers and crew of the Diamond Princess cruise ship are quarantined off the coast of Japan, placed under travel restrictions, and are prevented from returning to the U.S. for at least 14 days after they have left the Diamond Princess.
- February 23, 2020-As Italy becomes a global COVID-19 hotspot, the Italian government issues Decree-Law No. 6, containing urgent measures to contain and manage the epidemiological emergency caused by COVID-19, effectively locking down the country.
- February 28, 2020-CDC reports four additional presumptive positive cases of COVID-19 in California, Oregon, and Washington: one case is likely travel-related, but three are likely due to community spread of the SARS-CoV-2 virus in the U.S.
- February 29, 2020-CDC and the Washington Department of Public Health report the first death in an individual with laboratory-confirmed COVID-19 in the U.S. The patient was a male in his 50s who was hospitalized with a pneumonia of unknown cause and later died of his illness.
- March 3, 2020-CDC reports 60 cases of COVID-19 across Arizona, California, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New York, Oregon, Rhode Island, Washington, and Wisconsin. Of the 60 COVID-19 infections detected, 21 are travel-related, 11 are from person-to-person spread, and 27 are unknown.
- March 11, 2020-After more than 118,000 cases in 114 countries and 4,291 deaths, the WHO declares COVID-19 a pandemic.
- March 13, 2020-The Trump Administration declares a nationwide emergency and issues an additional travel ban on non-U.S. citizens traveling from 26 European countries due to COVID-19.
- March 15, 2020- States begin to implement shutdowns in order to prevent the spread of COVID-19. The New York City public school system— the largest school system in the U.S., with 1.1 million students— shuts down, while Ohio calls for restaurants and bars to close.
- March 19, 2020-California governor Gavin Newsom issues a statewide stay-at-home order to slow the spread of COVID-19 instructing residents to only leave their homes when necessary and shutting down all but essential businesses.
- March 27, 2020-The Trump Administration signs the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The act includes funding for $1,200 per adult (with expanded payments for families with children), expanded unemployment benefits, forgivable small business loans, loans to major industries and corporations, and expanded funding to state and local governments in response to the economic crisis caused by COVID-19.
- March 28, 2020-To prevent the spread of COVID-19, the White House extends all social distancing measures until through the end of April 2020.
- March 31, 2020-At a White House Press Briefing, Dr. Anthony Fauci and Dr. Deborah Brix announce that between 100,000 and 240,000 deaths in the U.S. are expected— even if social distancing and public health measures are perfectly enacted.
- April 3, 2020- At a White House press briefing, CDC announces new mask wearing guidelines and recommends that all people wear a mask when outside of the home.
- April 4, 2020-More than 1 million cases of COVID-19 had been confirmed worldwide, a more than ten-fold increase in less than a month.
- April 13, 2020-Most states in the U.S. report widespread cases of COVID-19.
- April 30, 2020-The Trump Administration launches Operation Warp Speed, an initiative to produce a vaccine against the SARS-CoV-2 virus as quickly as possible. The operation funds the development of six promising vaccine candidates while they are still in the clinical trial phase, including the Pfizer-BioNTech and Moderna mRNA vaccines.
- Since mid-March 2020, more than 26.5 million people in the U.S. have filed for unemployment, increasing the number of people without health insurance amid a pandemic.
- May 8, 2020-FDA authorizes the first COVID-19 test with the option of using home-collected saliva samples.
- May 9, 2020-The unemployment rate in the U.S. is 14.7%— the highest since the Great Depression. With 20.5 million people out of work, the hospitality, leisure, and healthcare industries take the greatest hits overall, affecting essential workers, people with lower incomes, and racial and ethnic minority workers disproportionally.
- May 21, 2020-AstraZeneca receives more than $1 billion from the U.S. government in funding for the development of the AstraZeneca/Oxford University COVID-19 vaccine, with the first doses due to arrive in September 2020.
- May 28, 2020-The recorded death toll from COVID-19 in the U.S. surpasses 100,000.
- June 8, 2020-The World Bank states that the COVID-19 pandemic will plunge the global economy into the worst recession since World War II.
- June 10, 2020-The number of confirmed COVID-19 cases in the U.S. surpasses 2 million.
- July 7, 2020-The number of confirmed COVID-19 cases in the U.S. surpasses 3 million.
- July 16, 2020-Many states, including California, Michigan, and Indiana postpone re-opening plans as COVID-19 case numbers rise.
- August 17, 2020-COVID-19 becomes the 3rd leading cause of death in the U.S. Deaths from COVID-19 now exceed 1,000 per day and nationwide cases exceed 5.4 million.
- September 16, 2020-HHS announces a plan to make COVID-19 vaccines free in the U.S.
- September 22, 2020-The reported death toll in the U.S from COVID-19 surpasses 200,000.
- September 28, 2020-The reported death toll from COVID-19 reaches more than 1 million worldwide— in just 10 months.
- November 4, 2020-The U.S. reports 100,000 new cases of COVID-19 in 24 hours.
- November 13, 2020-Two weeks after large groups gathered for Halloween celebrations, COVID-19 case numbers spike across the U.S.
- November 16, 2020-Moderna’s COVID-19 vaccine is found to be 95.4% effective in its clinical trial.
- November 18, 2020-Pfizer-BioNTech’s COVID-19 vaccine is found to be 95% effective in their 44,000-person trial.
- December 11, 2020-FDA issues an Emergency Use Order (EUO) for the Pfizer-BioNTech COVID-19 vaccine.
- December 14, 2020-The recorded death toll from COVID-19 in the U.S surpasses 300,000.
- Sandra Lindsay, a nurse in New York, becomes the first American outside of clinical trials to receive a COVID-19 vaccine.
- December 18, 2020-FDA issues an EUA for the Moderna COVID-19 vaccine.
- December 19, 2020-ACIP recommends the Moderna COVID-19 vaccine in persons ages 18 years or older for the prevention of COVID-19.
- December 23, 2020-The Trump Administration announces the purchase of 100 million additional doses of the Pfizer-BioNTech COVID-19 vaccine.
- December 24, 2020-More than 1 million COVID-19 vaccine doses have been administered in the U.S. in just 10 days: healthcare workers and older adults living in long-term care facilities are the first to be vaccinated with the goal of vaccinating every person as soon as enough vaccine doses are available
- December 27, 2020-The Trump Administration signs the second COVID Relief Act into law. The bill includes $900 billion in funding for enhanced unemployment benefits, business loans, the purchase and distribution of COVID-19 vaccines and testing kits, and direct cash payments of $600.
- December 31, 2020- year anniversary of the first reported case of COVID-19 to WHO. 2.8 million people in the U.S. have received a COVID-19 vaccine dose— far short of the nation’s goal of 20 million.
- January 18, 2021-The reported death toll from COVID-19 in the U.S. surpasses 400,000.
- January 26, 2021-More than 23 million COVID-19 vaccine doses have been administered in the U.S. The number of recorded COVID-19 cases worldwide surpasses 100 million.
- February 18, 2021- An estimated 2.5 million women and 1.8 million men have left the workforce since the start of the pandemic in the U.S.
- February 21, 2021-The recorded COVID-19 death toll in the U.S. surpasses 500,000.
- February 27, 2021-FDA approves an emergency use authorization (EUA) for Johnson & Johnson’s one-shot COVID-19 vaccine for all people ages 18 years and older.
- March 8, 2021-CDC recommends that people who are fully vaccinated against COVID-19 can safely gather with other fully vaccinated people indoors without masks and without socially distancing.
- March 11, 2021-The Biden Administration signs the $1.9 trillion American Rescue Plan into law. The stimulus bill includes funding for expanded unemployment benefits, rental assistance, and COVID-19 vaccinations, as well as extending the child tax credit for one year and providing direct cash payments of up to $1,400 per person.
- March 13, 2021-More than 100 million COVID-19 vaccine doses have been administered in the U.S.
- April 21, 2021-More than 200 million COVID-19 vaccine doses have been administered in the U.S.
- May 10, 2021-FDA expands the emergency use authorization (EUA) for the Pfizer-BioNTech COVID-19 vaccine to include all adolescents ages 12–15 years.
- May 17, 2021-An estimated 5.1 million women left the workforce when COVID-19 closed schools and child-care centers in 2020. Today, 1.3 million remain out of the workforce and only 56% of women in the U.S. are working for a salary– the lowest percentage since 1986.
- June 1, 2021-The COVID-19 B.1.617.2 / “Delta” variant, first identified in India, becomes the dominant variant in the U.S. The variant begins a third wave of infections during the summer of 2021.
- July 6, 2021-American Indian and Alaska Natives had some of the highest rates of hospitalization and death in the U.S. early in the pandemic, but American Indian and Alaskan Native vaccination campaigns are succeeding: CDC’s COVID-19 data tracker shows that American Indians and Alaskan Natives have the highest COVID-19 vaccination rate of any racial or ethnic group in the U.S.
- August 23, 2021-FDA fully approves the Pfizer-BioNTech COVID-19 vaccine for all people ages 18 years and older.
- October 7, 2021-More than 140,000 children in the U.S. have lost their primary or secondary caregiver to the COVID-19 pandemic. One of every 168 American Indian and Alaska Native children, 1 of every 310 Black children, 1 of every 412 non-White Hispanic children, 1 of every 612 Asian children, and 1 of every 753 White children have now experienced orphanhood or the death of caregivers.
- November 2, 2021-ACIP recommends the Pfizer-BioNTech pediatric COVID-19 vaccine for all children ages 5–11 years.
- November 8, 2021-All non-citizens who are traveling to the U.S. will now be required to be fully vaccinated and provide proof of their vaccination status to fly to the U.S. All travelers will continue to be required to show a negative pre-departure COVID-19 test taken no more than three days before they board their flights.
- December 1, 2021-The first case of the Omicron variant in the U.S. is detected by the California and San Francisco Departments of Public Health.
- December 9, 2021-CDC and FDA expand COVID-19 booster recommendations to include everyone ages 16 years and older.
- December 15, 2021-The recorded death toll from COVID-19 surpasses 800,000 in the U.S. One in every 100 people ages 65 years and older in the U.S. has died.
- January 3, 2022-The U.S. reports nearly 1 million new COVID-19 infections– the highest daily total of any country in the world. The number of hospitalized COVID-19 patients has risen nearly 50% in just one week.
- January 14, 2022-In one month, the daily average of new COVID-19 infections reported in the U.S. spikes from 119,215 to 805,062.
- January 24, 2022-The Omicron variant now accounts for approximately 99% of all current COVID-19 cases in the U.S.
- January 31, 2022-FDA fully approves the Moderna COVID-19 vaccine for all people ages 18 years and older. Full FDA approval further reinforces that the Moderna COVID-19 vaccine has been shown to meet the agency’s high standards for safety, effectiveness, and consistent quality in manufacturing.
- March 5, 2022-More than 10 billion people have received a COVID-19 vaccine, with WHO reporting that 10,704,043,684 COVID-19 vaccine doses have been administered worldwide. About 56% of the world is now fully vaccinated, but many regions still lack access, especially on the African continent where less than 20% of the total population is currently vaccinated.
- March 8, 2022-Hawaii becomes the last state to announce an end to its universal indoor mask mandate, scheduled for March 26, 2022.
- March 10, 2022-The number of recorded deaths due to COVID-19 surpasses 6 million worldwide, with WHO reporting 6,019,085 confirmed deaths. The true number is likely much higher. The number of recorded COVID-19 cases surpasses 450 million worldwide, with WHO reporting 450,229,635 confirmed infections. The true number is likely much higher.
- March 11, 2022- CDC updates the “COVID-19 Community Level,” showing that more than 98% of the U.S. population is in a location with either a low or medium COVID-19 community transmission levels.
- March 12, 2022-CDC estimates that 23% of all current COVID-19 infections in the U.S. are caused by the Omicron BA.2 subvariant, with initial data suggesting that BA.2 appears to be more transmissible than the Omicron BA.1 variant.
- April 13, 2022-The Omicron subvariant BA.2 now makes up more than 85% of all new COVID-19 infections in the U.S.
- April 18, 2022-CDC’s mask mandate for indoor public transportation is struck down by a judge in Florida.
- April 22, 2022-For the second year in a row, COVID-19 was the third leading cause of death in the U.S.– after heart disease and cancer.
- May 5, 2022-WHO estimates that there have been approximately 15 million direct or indirect deaths (also called “excess mortality”) globally from January 2020 – December 2021 that were caused by the COVID-19 pandemic. South-East Asia, Europe, and the Americas accounted for 84% of the excess deaths.
- May 12, 2022-The number of recorded deaths due to COVID-19 in the U.S. reaches 1 million (1,000,000).
- May 19, 2022-ACIP recommends Pfizer-BioNTech’s COVID-19 vaccine boosters for everyone ages 5–11 years to be given at least 5 months after their primary vaccination series. ACIP also recommends everyone ages 12 years and older who is immunocompromised and those ages 50 years and older should receive a second booster dose at least 4 months after their first to prevent severe disease, hospitalization, and death.
- May 28, 2022-The weekly average of new COVID-19 infections in the U.S. is now six times higher than it was in 2021. Currently, there are 119,725 new cases reported each week– a number that is “grossly underreported” according to experts– compared to May 28, 2021, when there were 17,887.
- June 1, 2022-The U.S. has recorded a total of 84,145,569 COVID-19 infections and 1,003,571 deaths.
- June 18, 2022-ACIP recommends Moderna and Pfizer-BioNTech’s COVID-19 vaccines for everyone ages 6 months – 5 years, expanding vaccine eligibility to over 20 million additional children in the U.S. All people ages 6 months and older are now eligible for COVID-19 vaccination in the U.S.
- June 30, 2022-As COVID-19 case numbers rise across the U.S. due to the highly transmissible omicron subvariants BA.4 and BA.5., FDA calls for Omicron-specific updates to COVID-19 vaccine boosters from Pfizer-BioNTech and Moderna in fall 2022.
You can view the entire CDC COVID-19 Timeline here: https://www.cdc.gov/museum/timeline/covid19.html
And your Pasadena Chamber:
- Immediately provided information on a daily basis about the shutdown, COVID, safety protocols and where to get help.
- Instituted Food for First Responders to provide meals for frontline healthcare workers at Huntington Hospital by subsidizing take out meals from local restaurants for doctors, nurses and workers in the COVID-19 wards at the hospital.
- Phoned every Chamber member business in April and May, 2020, to ask about conditions and what help they needed. Provided an objective "shoulder to cry on" for many members with no one else to openly discuss their financial and business challenges.
- Helped more than 140 Chamber member businesses and non-member businesses navigate the pandemic aid relief programs and apply for PPP and EIDL grants and loans.
- Provided updates on rules, regulations, cases and more to our email blast list. (Sometimes more than daily and continuing into 2023.)
- Advocated for small business loans for locally owned companies threatened with closure due to COVID-q9 restrictions.
- Helped member companies identify lenders and secure funding through the PPP loan process.
- Argued for the City of Pasadena to provide grants to struggling local small businesses. After three months, the City finally provided $500,000 toward a grant program to give $10,000 to local businesses.
- Worked with the Pasadena Community Foundation to identify and distribute City of Pasadena grants to local small businesses.
- Advocated for reasonable re-openings for businesses. (Many Chamber members were recipients.)
- Worked to implement and promote safe re-opening protocols.
- Advocated on the state, regional and local level for reasonable re-opening regulations and advance notification to businesses of impending closure orders.
- Advocated with the City of Pasadena for use of federal funding to support small grants to micro businesses.
- Helped members and others prepare paperwork and apply for loan forgiveness. (Forgiveness rate among Pasadena Chamber members is more than 98% so far.)
- Helped create the Coalition for Safe Re-opening in California to advocate for clear, concise and reasonable government regulation to fight COVID.
- Were here to listen and provide support to those impacted by COVID-19 shutdowns.
- Provided online forums for discussion, meetings and networking.
- Los Angeles County has seen 34,643 deaths due to COVID-19 and more than 3,630,000 cases.
- California has seen more than 11,800,000 cases and 101,000 deaths due to COVID.
- The United States has experienced 100,622,056 cases and 1,088,481 deaths due to COVID-19.
- Worldwide there have been 664,381,851 cases and 6,695,634 deaths reported as of December 29, 2022.
- Pasadena has experienced 38,597 cases and 2,589 deaths due to COVID. There were 48 new cases and no fatalities reported on December 29th.
I admit, it would be nice to not report these numbers, but as long as COVID is effecting our members, our community and our businesses, I feel it is important to provide information on the pandemic and its impacts.
Health Orders: After January 1, 2023, the County’s Health Officer Order will continue to require that employers within the Los Angeles County Public Health jurisdiction report clusters of 3 or more COVID-19 cases among their employees, workers, or volunteers within a 14 day period to Los Angeles County Public Health at (888) 397-3993 or (213) 240-7821, or online at www.redcap.link/covidreport.
There is no change to the present reporting requirement. Continued reporting of COVID-19 case clusters and outbreaks at workplaces is especially important during the winter surge of respiratory infections. Public Health’s outbreak investigators help employers to mitigate the impact of COVID-19 outbreak among their workforce.
Recently the California Legislature passed Assembly Bill 2693 (AB 2693), which amended certain COVID-19 workplace response requirements. The County will align with the new employer workplace COVID-19 exposure notification options: (1) Direct written notice to employees or (2) Posted written notice at the worksite. Although state law no longer includes an employer reporting requirement, to protect workers against ongoing COVD-19 transmission, Public Health will continue to require employers report clusters of COVID-19 cases within 48 hours.
In addition, employers should do the following to protect their workforce during this busy holiday season:
- Encourage employees to get vaccinated against both influenza (flu) and COVID-19 and to stay up to date with their COVID-19 vaccines and boosters. Fill out a Public Health Mobile Vaccine Team Interest Form to host a vaccination clinic at your worksite.
- Provide well-fitting medical masks and respirators (e.g., N95, KN95, KF94) at no cost to employees who work indoors and have contact with other workers, customers, or members of the public.
- Promote indoor mask wearing among employees, visitors, and customers by posting signage on the importance of indoor mask wearing.
- Actively encourage and support employees to stay home when sick.
Other pertinent information and resources can be found on the Los Angeles County Department of Public Health website at http://publichealth.lacounty.gov/media/Coronavirus/
I think there is more than a little truth in this one:
The Economy: Global stocks and bonds lost more than $30tn in 2022 as inflation, interest rate rises and war in Ukraine triggered the heaviest losses in asset markets since the financial crisis.
From the World Bank: Following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID-19 variants and a rise in inflation, debt, and income inequality that could endanger the recovery in emerging and developing economies, according to the World Bank’s latest Global Economic Prospects report. Global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.
The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term. In addition, a notable deceleration in major economies—including the United States and China—will weigh on external demand in emerging and developing economies. At a time when governments in many developing economies lack the policy space to support activity if needed, new COVID-19 outbreaks, persistent supply-chain bottlenecks and inflationary pressures, and elevated financial vulnerabilities in large swaths of the world could increase the risk of a hard landing.
The slowdown will coincide with a widening divergence in growth rates between advanced economies and emerging and developing economies. Growth in advanced economies is expected to decline from 5 percent in 2021 to 3.8 percent in 2022 and 2.3 percent in 2023—a pace that, while moderating, will be sufficient to restore output and investment to their pre-pandemic trend in these economies. In emerging and developing economies, however, growth is expected to drop from 6.3 percent in 2021 to 4.6 percent in 2022 and 4.4 percent in 2023. By 2023, all advanced economies will have achieved a full output recovery; yet output in emerging and developing economies will remain 4 percent below its pre-pandemic trend. For many vulnerable economies, the setback is even larger: output of fragile and conflict-affected economies will be 7.5 percent below its pre-pandemic trend, and output of small island states will be 8.5 percent below.
Meanwhile, rising inflation—which hits low-income workers particularly hard—is constraining monetary policy. Globally and in advanced economies, inflation is running at the highest rates since 2008. In emerging market and developing economies, it has reached its highest rate since 2011. Many emerging and developing economies are withdrawing policy support to contain inflationary pressures—well before the recovery is complete.
Each month Oxford Economics’ team of 300 economists and analysts updates our baseline forecast for 200+ countries using our innovative Global Economic Model. Fully linking individual country models through global assumptions about trade volume and prices, competitiveness, capital flows, interest and exchange rates, and commodity prices, our model provides a rigorous and consistent structure for forecasting and understanding the impact of economic shocks. Below is just the top-level summary of our analysis of the latest economic developments.
- We think recent data support our view that the world economy will underperform the consensus expectation next year.
- Our forecast for world GDP growth to slow from 3% this year to 1.3% in 2023 is little changed from a month ago.
- Timely economic indicators continue to suggest that world GDP growth will slow markedly in Q4, following Q3’s temporary strength triggered by China’s easing of lockdown measures.
From the Organisation for EconomicCo-operation and Development: The global economy is facing significant challenges. Growth has lost momentum, high inflation has broadened out across countries and products, and is proving persistent. Risks are skewed to the downside. Energy supply shortages could push prices higher. Interest rates increases, necessary to curb inflation, heighten financial vulnerabilities. Russia’s war in Ukraine is increasing the risks of debt distress in low income countries and food insecurity.
The world is coping with a massive energy price shock: Russia’s war of aggression against Ukraine has provoked a massive energy price shock not seen since the 1970s. The increase in energy prices is taking a heavy toll on the world economy, which will worsen if European gas storage runs short. This could force rationing in Europe, hurt countries worldwide as global gas prices are pushed higher. Growth would be lower and prices higher in Europe and worldwide.
17.7% of GDP spent on energy
Growth has been slowing: Tighter monetary policy and higher real interest rates, persistently high energy prices, weak real household income growth and declining confidence are all expected to sap growth. The United States and Europe are slowing sharply and the major Asian emerging-market economies are expected to account for close to three-quarters of global GDP growth in 2023.
2.2% world GDP growth in 2023
Inflation will remain high in 2023, but will moderate: Inflationary pressures have intensified, largely due to the war in Ukraine, which has pushed up energy and food commodity prices. The higher price of energy has helped trigger increasing prices across a broad basket of goods and services. Tighter monetary policy and decelerating growth will help to eventually moderate inflation.
From the Royal Bank of Canada: In our view, 2023 is set to be a challenging year for the US. Recession is likely to make itself felt in earnest around the middle of the year. The sluggish economic backdrop should persist throughout 2023 and into 2024.
Inflation, however, should continue to slow. Core inflation could sink to between 3% and 4% by mid-year, and below 3% by the year-end. We expect this will be an organic decline, starting even before the Federal Reserve interest rate hikes have had a chance to take effect.
Fed hikes are likely to continue for a while, but we believe the cycle will end in the first half of 2023. Rate cuts would then be on the agenda, though these are expected to be limited to a couple of reductions and economic activity is unlikely to justify more aggressive easing.
Unemployment may rise again, potentially reaching around 5%. This should about a reduction in wages, which in turn will likely have a dampening effect on consumer appetite.
While we expect only modest job losses in 2023, this may change depending on corporate profitability levels. Over the past year, profits have only been retained because companies were able to pass on price increases. If spend volumes remain flat, businesses may seek more significant workforce cuts.
From KPMG (an exhaustive analysis): A Wonderful World? 2023 Outlook
Rates hikes by the Federal Reserve and weaker growth abroad will likely trigger a shallow recession in 2023.
A Wonderful World? 2023 Outlook
The silver lining is the eventual rebound when the Fed shifts to cutting interest rates.
Louis Armstrong recorded “What a Wonderful World” in 1967. The song was less about what the world was than what it could be. The Vietnam war was raging, protests were escalating and the civil rights movement was revealing deep divisions in the fabric of our culture.
Jobs were plentiful, but at a price: escalating inflation. The Federal Reserve clashed with the president when it raised rates to counter inflation. The pressure was so intense that the Fed stopped short of derailing inflation; by the end of the 1960s inflation had tripled.
The pressure from the White House intensified with a new president in 1969. The Fed bowed to pressure to stimulate to ensure the president’s reelection in 1972. That provided dry tinder for the stagflation that took root when OPEC cut oil production in 1973.
Former Fed Chairman Arthur Burns laid out his mistakes in a famous speech in 1979. The Fed failed to slay the inflation beast, not once but several times. One of his successors was in the audience and took the lessons to heart. Paul Volcker initiated two brutal, back-to-back recessions to slay what had become a more powerful beast in the early 1980s.
Wages collapsed, while the gap between wage and productivity growth widened; living standards deteriorated and inequality worsened. Former industrial meccas became ghost towns. Men were hit hardest as blue-collar jobs disappeared. Large swaths of the population were sidelined, seeding the political divisions we are enduring today.
Current Fed Chairman Jay Powell is a student of history. He is committed to avoiding past mistakes and has proven he can hold his ground against a hostile White House.
Powell and his colleagues know the reality we face, that it can be dealt with and there is a better world to be had on the other side. That is the metaphor embedded in Armstrong’s iconic song.
Inflation is like cancer. If left untreated, it can metastasize into a fatal condition. The Fed has a cure: to catch it early and limit the pain of the treatment.
Powell laid out the threat we face in his most recent speech. A cooling of goods inflation and shelter costs will slow inflation but may not be enough to stop it from metastasizing. Service sector inflation is accelerating in the areas most sensitive to labor costs.
The Fed has limited tools. It can only hammer demand to meet an undersupplied world. Labor is among the most supply constrained.
Aging demographics, the pandemic and a sharp slowdown in legal immigration have left us with fewer workers than needed. Labor shortages are more structural than cyclical. A one-time rise in unemployment may not solve the problem; unemployment may have to remain higher, even after the Fed has derailed inflation.
The November employment report underscored the risks. Job gains continued to surge, while wages accelerated; wages in the service sector, where inflation is stickiest, drove those gains.
The Fed’s baseline forecast assumes rate hikes will stall the economy and raise unemployment. At the November meeting it concluded that risks were to the downside; the baseline and the probability of a full-blown recession were neck and neck. Either way, the economy will slow and unemployment will rise.
The silver lining is that Fed-induced recessions are easier to recover from than balance sheet recessions, like we saw in 2008-09. Household and large firm balance sheets are in better shape, which means they can more rapidly respond to the stimulus of a cut in rates when it occurs.
This special edition of Economic Compass looks at the outlook for 2023, how the slowdown is expected to play out by sector and what those shifts mean for different industries. Rate hikes are accelerating the pivot away from spending on goods to services. Millions are scrambling to escape their homes, step out with friends and feel the embrace of loved ones.
The pandemic-induced bubble is bursting. The industries that were winners are losing, while those that suffered the most from initial quarantines are winning.
Large firms have an upper hand as they have either paid down their debt or locked into low rates. Small and mid-size firms, including startups, are more sensitive to rate hikes. Industries will consolidate.
Real GDP growth expanded at a revised 2.9% annual pace in the third quarter, reversing two quarters of declines. The overwhelming bulk of that “strength” was due to a sharp narrowing of the trade deficit. Exports surged as supply chain problems eased, while imports plummeted.
Prospects for the fourth quarter are worse, with real GDP rising less than 0.7%. Annual growth is expected to come in at 1.9% in 2022. Fourth- quarter-to-fourth-quarter real GDP growth, which more closely tracks momentum in the economy, is expected to slow to 0.3% in 2022.
Rate hikes by the Federal Reserve and weaker growth abroad are expected to trigger a shallow recession in 2023. Real GDP growth is expected to contract by 0.2% in 2023, while fourth-quarter-to-fourth-quarter growth drops by 0.3%. Fed-induced recessions are inherently easier to recover from than balance sheet recessions, like 2008-09.
Surging federal debt has limited the fiscal space that the federal government can tap to offset the impact of a recession; fiscal stimulus would also complicate the Fed’s battle against inflation.
The greatest threat to the outlook is a showdown over the lifting of the debt ceiling, which it is hoped will be avoided. The recent experience in the U.K. suggests that bond market participants have grown weary of such nonsense. Calmer heads in Congress on both sides of the aisle are doing their best to avert a showdown.
2023 Outlook: Anatomy of a Recession
The losses are expected to be close to the 2001 and 1990-91 recessions but well short of the carnage of 2008-09 or 2020. (The threshold is low.)
The subsequent recovery in 2024 is expected to be more robust than previous recoveries, except for the pandemic. The largest limit will be labor shortages, as they could cap our ability to generate new jobs while triggering another bout of inflation.
Unemployment Drifts Higher
Chart 2 shows that the unemployment rate is expected to approach 5.5% by year-end. That is low when compared with other recessions.
Rising retirements, ongoing staffing shortages and the desire by firms to hold onto workers they fought hard to hire are expected to dampen the impact on unemployment. Research by the Fed suggests that more than 2 million of the 3.5 million missing from the labor force are retirees.
Many older workers had COVID and are unable to work due to long COVID. Younger retirees are now needed to care for grandchildren and elderly parents, given acute labor shortages in childcare and long-term care.
This is in addition to the scars of the pandemic, which are adding to staffing shortages. The number of those out sick and unable to work hit 1.6 million in November; that left nearly 700,000 more people on the sidelines unable to work or seek work than in any month of the 2010s. Fatalities were larger here than elsewhere.
Consumer Spending Sputters
We generated more than 4.3 million new paychecks year-to-date. That is double the annual pace of payroll growth in the 2010s. Those gains boosted aggregate income growth and buoyed consumer demand, even as individuals lost ground to inflation.
A rise in the ranks of the unemployed and retirees will reverse those trends. Even a small loss in employment could mean a drop of more than six million paychecks between 2022 and 2023.
Credit card debt and “buy now, pay later” loans (BNPL) are surging after consumers paid them down during the pandemic. That is further buoying spending but faces limits; debt service burdens compound rapidly when rates are rising. The use of BNPL to pay for groceries is a sign of economic stress.
The saving rate plummeted to 2.3% in October, tying the 2005 low when many used equity in their homes as ATMs. Excess saving from the pandemic is dwindling.
The recession in housing is another headwind. Home buying and building are the single largest triggers to additional spending; we repair and remodel the homes we just bought. Those shifts are starting to reverse, with spending on housing-related goods falling.
Consumer sentiment and confidence measures both retreated in November, and are either at or on the cusp of recession territory. Buying attitudes about homes and big-ticket items that tend to be financed, including vehicles, plummeted.
Rate hikes accelerated the pivot in spending on goods to services; they made the things we finance less affordable and the time we share more attractive. The downside is that the pent-up demand for services is less a driver of growth than that for goods. Holiday parties canceled and haircuts missed due to quarantines cannot be replaced, while the backlog on weddings is shrinking.
Consumer spending is expected to slow but not collapse in the fourth quarter. A drop in prices at the gas pump could provide an extra lift in December. OPEC + has decided to hold but not expand its production cuts. The worst of the weakness is likely to be felt in the Spring, as layoffs mount.
Winners and Losers: Hotels, resorts and restaurants are expected to hold up better, given the pent-up demand for travel and tourism. It is unclear how strong that market will remain as businesses curb travel budgets. The opening of Asian countries to travel should offset that weakness.
Large retailers have already been squeezed. They have not hesitated to push the costs of inventory management and transportation onto their suppliers. That is pushing stress down the economic food chain to middle and small businesses.
Vehicle dealers, who were able to reduce the costs of inventories as sales outpaced production, will see costs rise. Insurance on vehicles surged, along with the rates on loans to finance inventories.
Media and entertainment companies and consumer product companies have the most exposure to short-term debt. They will feel the squeeze of higher interest rates along with other cost pressures on their margins. Layoffs have already accelerated at many news and streaming services. Advertisers are pulling back; competition among news providers has intensified.
Health care is in a category all its own. Providers are squeezed on all sides. Labor costs are accelerating, burnout is high and consolidation is picking up. Healthcare providers rely heavily on short-term debt.
Housing Losses Compound
Single Family Homes
The contraction in single-family home buying and building in the second and third quarters was the worst since the subprime crisis. Mortgage applications were still down nearly 50% in November, despite a slight pickup in purchase applications when mortgage rates dipped below 7%.
Single-family home construction is expected to drop another 15% in the first half of 2023. Home construction is expected to bottom out in the second quarter once mortgage rates start to come down.
Housing affordability hit its lowest level since the mid-1980s in October; more than half of all first-time buyers were unable to afford a home by March; buying conditions have worsened since then. Speculative investors are pulling back. All-cash buyers who flip to rent are waiting for additional price cuts.
Home values are falling the fastest in what were the hottest second-tier markets. Hiring freezes in the tech sector are exacerbating declines; many cheaper markets saw astonishing appreciation due to the higher salaries tech workers brought with them. The national index peaked in June.
We expect the S&P Core Logic Case-Shiller home price index to drop 20% on a fourth-quarter-to-fourth-quarter basis in 2023. That would mark the first national decline in the series since 2011 and push prices to December 2020 levels.
Better underwriting standards and a smaller jump in unemployment is expected to keep foreclosures in check; the cushion in equity is substantial.
Inventories of homes for sale remain extremely low. Existing homeowners with fixed rates are staying put. A stunning 40% of homeowners have paid off their mortgages. Older homeowners prefer aging in place.
Millennials are aging into their peak home buying years. That suggests that housing could quickly rebound once rates drop and values settle. A rebound in sales and construction before the end of 2023 is likely. Supply will depend heavily on how willing older owners will be to leave their homes.
Multifamily construction is poised to correct after several banner years. Multifamily construction soared to the highest levels since 1986 during the first three quarters of 2022. Multifamily construction is expected to fall more than 30% in 2023.
Multifamily building permits peaked in July 2022 but remained elevated through October. Projects in the pipeline are at their highest since 1973. The Senior Loan Officer survey by the Fed shows that major banks have pulled back on lending and are already down to recession levels.
Apartment vacancies remain low with space scarce. Of course, that could be said of the single-family market as well, but that did not stop prices from falling and the market from cratering.
The Housing and Urban Development rent index dropped to its least affordable level on record in the third quarter of 2022. That is decimating demand. Household formation slowed dramatically in 2022.
College grads pulled back, opting to stay with parents or take on roommates. Foreign students, who absorbed luxury space in urban areas, remain scarce.
High frequency data show that rents have rolled over and begun to fall. That hasn’t stopped sticker shock for those renewing leases. Rents are still up substantially from a year ago. We expect a drop in 2023.
That could add to the weakness in the multifamily market. Some projects will get delayed; others will go under. Vulture funds may get their chance to pounce. The weakness in the multifamily market could linger.
Winners and Losers: Cap rates remain low for multifamily but could rise with a drop in rents. Rental lease companies could see a slowdown in activity. Tighter credit standards could hobble developers.
Single-family home builders, realtors, mortgage brokers and manufacturers of appliances, furniture and construction materials are expected to be hit hardest. Layoffs at finance companies have picked up along with cuts in housing-related manufacturing activity.
Business Investment Softens
Equipment Spending Falters
Backlogs for light vehicles, heavy trucks and aircraft remain strong, while backlogs are returning to pre-pandemic norms elsewhere. Supply chain glitches are abating as delivery times have fallen.
Core durable goods orders rebounded in October after falling in September. Gains in computer and information equipment were especially large. The latter reflects an upgrade in equipment that handles more sophisticated, artificial intelligence (AI) and cloud computing.
There is some evidence that the ultra-low rates of the 2010s discouraged business investment. Big decisions on infrastructure were delayed. That sets the stage for a potentially stronger recovery on the other side of the slump we are expecting.
Our own KPMG Insights on Inflation survey in the fourth quarter revealed that more than three quarters of businesses plan to invest in labor saving technologies. They understand that labor shortages are structural.
The manufacturing indices slipped below 50, a sign of contraction, while many of the Fed’s regional manufacturing indices cratered. The Chicago Purchasing Managers Index predicted the last eight recessions; it hit recession territory in November.
Office leasing has slowed after the initial push to bring workers into offices. Demand for contingent space is rising, as firms manage peak days. Firms are focused on the most high-tech and energy efficient space.
Small businesses are pulling back the most. One recent poll revealed that more than a third of small businesses could not pay their rent in October, a sharp jump from September.
Cities in the Northeast and Midwest (Chicago) are doing better than those in the West. San Francisco has suffered some of the largest losses. Suburban office markets initially held up better than those in the major cities but are now losing ground.
The outlook for industrial space is mixed. Large retailers and manufacturers have no desire to pay for the costs of carrying and transporting inventories – so much for just-in-case inventory systems. They are pushing those costs onto suppliers.
Warehousing for the last mile of goods to reach a customer has held up better. Online spending has come off from the peak of the pandemic but is settling into a higher trend.
Retail space is experiencing a bit of a resurgence, despite a slowdown in spending on goods. Much existing space is no longer desirable or usable and will be demolished. A portion of planned upgrades are likely to be delayed until credit conditions ease. Those projects will fuel the rebound when rates fall.
The oil sector, which drove gains in nonresidential investment in the 2010s, has been slow to ramp up. Capital discipline, labor shortages and constraints on refining capacity are limiting investment.
Large energy companies are leaning on renewables to ensure their longevity. Government subsidies and the surge in private sector funds committed to the transition from carbon fuels are amplifying those shifts.
The impetus to hoard as prices surged and shortages compounded overstated demand. That left retailers with unwanted inventories. It is what is known as the “bullwhip effect;” we are now feeling the sting.
Manufacturing inventories are in better shape than retail inventories. Appliance producers cut production over the summer to avoid a glut; the next shoe to drop will be a broader draining of manufacturing inventories.
Supply chains remain fragile. Ports in the U.S. have begun to levy fees on empty containers, while China is curbing shipments of empty containers abroad. Those shifts, coupled with efforts by shipping companies to stem the drop in shipping costs, could interfere with export supply chains in early 2023.
Winners and Losers: The transition to renewables is a bubble in the making. Investors are betting on the sector before they know what business models will work. A similar phenomenon occurred when railroads were built and when the internet gained critical mass.
Construction of chip plants and electric battery and vehicle plants are expected to pick up, given government incentives. Investment in AI and labor-saving technologies should help buoy spending on intellectual property and robotics.
Leasing companies and developers in the industrial space are expected to do better than those in the office space. Manufacturing activity is expected to fall, driven by losses in heavy manufacturing. Appliances, furniture, construction materials are expected to be hit harder, at least initially, than manufacturers of heavy trucks and aircrafts.
Deal volume is expected to remain suppressed until rates begin to fall and financial markets rally. Large investment banks are hunkering down, despite banner profits. Pension funds are pulling out of less liquid, long-term investments. Valuations will remain suppressed until interest rates recede.
Tighter credit standards and restrictive loan covenants will exacerbate the pressure on small and midsize firms. Now is the time for larger, less leveraged firms to seek deals. Consolidation will accelerate.
Government Spending Up Modestly
Federal spending is falling in the fourth quarter as Congress struggles to pass a budget or continuing resolution during the lame duck session. The continuing resolution gets us to December 16; that is expected to be extended to just before Christmas to pressure Congress to cut a deal on the now expired fiscal 2023 budget.
One of the biggest boosts to federal spending in early 2023 is the 8.7% jump in Social Security payments, which is slated to hit in January. That complicates the job for the Fed, as those checks will be spent.
Defense spending is expected to rise in response to the war in Ukraine, but actual funds for Ukraine are much smaller than most realize. They are barely rounding errors in our national budget.
Subsidies and incentives for electric vehicles, battery and semiconductor plants are ramping up factories faster than the larger infrastructure bill. That will buoy investments in those sectors. The bulk of the infrastructure bill is expected to hit in the mid-2020s.
There is hope that Congress can get a resolution on the debt ceiling before year-end. The debt ceiling is an antiquated law that was never meant as a weapon of mass destruction. It merely ensures we service the debt on loans the government has already taken out, not new spending. The U.S. suffered a downgrade in the quality of its debt the last time there was a showdown over the debt ceiling in 2011.
The recent experience in the U.K. suggests that bond investors are less tolerant of such nonsense today; the mere threat to default on our debt could trigger a sharp depreciation in the dollar and a rise in rates.
State & Local
State and local government coffers are in better shape. Soaring tax revenues, the cost savings associated with the pivot of schools online and pandemic aid bolstered balance sheets.
Some of the windfall gains were used to boost rainy day funds. Investments in infrastructure, tax holidays (notably on gas) and rebates picked up. What is left will buoy spending at the state and local levels in 2023.
Winners and Losers: Climate change initiatives including funding for clean energy and incentives for electric vehicle plants will spur investments there. Semiconductor plants will receive large subsidies but the complexity of the supply chain will be a hurdle to achieving independence from foreign suppliers.
The Internal Revenue Service (IRS) will be ramping up unless their budget is cut again. The IRS desperately needs to modernize its systems as well as staff up. This is a sticking point for more conservative members of Congress and could represent a hurdle to a larger budget resolution, but staffing the IRS would pay for itself and reduce the annual deficit.
The weakness will be in domestic programs, which could be squeezed by the slowdown in funding relative to inflation. A continuing resolution is particularly restrictive, given the current inflation environment. That means fewer federal government contracts.
State and local governments have yet to spend their pandemic aid, much of it targeted to improve the infrastructure of public schools. Those projects span HVAC systems to repairs and upgrades to buildings.
Global Growth Weakens
The global economy is expected to slip below 2% in 2023. That is recession territory for much of the world; it means that many countries will lose ground on a per capita basis.
Developing economies, which were the drivers of economic growth, are struggling along with many developed economies. China should pick up in 2023, given weak 2022 comparisons and an easing of zero-COVID policies but gains are expected to remain a fraction of what the country experienced in the 2010s.
China’s real estate sector remains over-leveraged. The government is attempting to blunt the blow with more targeted stimulus, but it is unclear how much it can accomplish. Exports, which are the primary driver of China’s economy, are expected to slow in response to weakness abroad and a decoupling of supply chains.
The pandemic and geopolitical tensions accelerated the regionalization of supply chains and “friend shoring.” Firms must be more careful about with whom and where they do business, rather than where the cost of production is cheapest.
ASEAN countries with younger populations are seeing an influx of foreign investment, which is helping them grow and accelerating the move away from China. Latin America, notably Mexico, also wins in that world. The United States Mexico Canada Agreement on trade (USMCA), which was upgraded to include intellectual property protections, makes trade with Mexico a safer long-term bet.
Smaller developing economies are in worse financial shape than larger countries. The need to subsidize food and energy has stressed government budgets; ten countries are already in, or have a very high probability of, default in the next year.
The concern is contagion and the risk that small fires could kindle a larger blaze. It was not on my bingo card that the U.K., a developed economy, would be one of the first to test the limits of what they could do with record tax cuts. The bond vigilantes are back.
The good news is that energy prices have come off of the peak hit after Russia invaded Ukraine. Weak global growth and a stockpiling of liquified natural gas (LNG) in Europe helped. The larger problem may be next winter when Europe has depleted what was left of the oil from Russia.
The largest headwinds are rate hikes. Central banks are raising rates the world over and are far from done. Those hikes will show up as additional weakness in 2023. The exception might be Latin America, including Brazil, which was earlier to hike rates.
Trade Deficit Modestly Narrows
A surge in the value of the dollar, the lags that are built into dollar-denominated contracts and a weakening of growth abroad suggest that exports will soften in the first half of 2023. Those shifts will dampen any improvement in trade related to a slowdown in imports early next year.
That marks a sharp shift for the trade deficit, which narrowed over the summer. Trade will not provide the buffer to growth it usually does in a recession.
Winners and Losers: Companies will be scrambling to hedge their currency bets and reprice imports. Corporate tax strategies may need to be revisited. Logistics firms should do well as companies adjust their outsourcing activities to a more protectionist and hostile geopolitical environment.
Foreign transplants, which rely more on imports to source their inputs, should do better than domestic producers. Multinational companies, which are more exposed to currency shifts and geopolitical risks, will lag. Heavy manufacturing tends to be hit the hardest by shifts in the dollar, which can take years to play out.
10-Year Treasury Note Yield at Constant Maturity, Percent
Inflation Slowly Cools
We expect the core personal consumption expenditures (PCE) index, which the Fed targets at 2%, to slow faster than the Fed expected in its last round of forecasts. A recession is the primary reason for cooler inflation:
Supply chain problems, which account for little more than half of inflation, are receding.
Commodity prices have come off of their highs and are now falling.
Home values and rents are cooling rapidly.
The problem is core service sector inflation outside of shelter. That category spans from spending on health care to education, haircuts and hospitality. The most recent PCE data revealed that those costs were still accelerating; a surge in the cost of labor is playing a key role in those gains.
History has taught us that the longer inflation remains elevated, the more it gets baked into contracts and becomes self-feeding. Workers begin to demand cost of living adjustments or COLAs in wages, while companies put escalators tied to the Consumer Price Index (CPI) in their contracts. The vehicle industry is renegotiating contracts next year and worried about the desire for COLAs.
The Fed believes that we need wages to slow to between 3-4% to ensure inflation does not become self-feeding. Average hourly earnings jumped back above 5% on an annual basis in November.
Fed Hits Brakes Harder
Chart 5 shows the forecast for the fed funds rate. The November unemployment report put a 0.75% rate hike back on the table but we think Powell and his colleagues will stick to a 0.5% hike in December and signal a higher terminal fed funds rate. The fed funds rate is now expected to peak at 5.5%, 0.75% higher than the Fed expected in September.
The Fed is expected to raise its estimate for unemployment and further reduce its forecasts for growth in 2023. The Fed currently does not plan to cut rates until 2024.
We expect aggressive rate cuts in the latter part of 2023, with inflation cooling in response to an actual recession. But don’t expect a return to zero rates anytime soon.
The Fed has concluded that the noninflationary rate of unemployment (NAIRU) has moved up with the pandemic. That means higher rates and higher unemployment on the other side of the current bout of inflation. That reality has yet to set in.
The Fed’s balance sheet has fallen by nearly $400 billion since its peak in June. Reductions in its Treasury bond holdings have fallen faster than its holdings of mortgage-backed securities.
Liquidity in the Treasury bond market has grown thin as the Fed has pulled back. It will likely have to stop well short of its goal to reduce the balance sheet by $3 trillion. Powell admitted as much in the question and answer portion of his most recent speech.
Treasury Yields Up, Markets Volatile
Chart 6 shows the forecast for 10-year bond yields. Bond yields are expected to peak in the second quarter of 2023.
The yield curve, or the difference between short- and long-term yields, has inverted. That can be a sign of a recession. The Fed’s reduction in its bloated balance sheet is exacerbating that signal. Our model of recession based off of the yield curve inversion shows the highest probability of a recession since 1982.
Stock prices should rally once an end in rate hikes becomes apparent. The problem is getting from here to there. A slowdown in demand, margin compression and higher rates are all expected to take a toll on stock returns in the near term.
Our model suggests that the S&P 500 could slip another 5-7% from recent levels before rebounding in the fourth quarter of 2023. The model shows the S&P 500 ending 2023 about 5% above where it was as of the writing of this report.
The world is not wonderful but with a containment of inflation it could be much better than it is. The road from here to there is littered with potholes. Sectors of the economy that benefitted from the pivot online and shift to work from home are losing, while those that suffered the worst during initial lockdowns are winning.
Small and midsize companies and industries that rely more on debt are suffering, while large firms that locked into low rates are insulated. New business formation will slow, deal volume will remain suppressed and consolidation within industries will accelerate. The exception may be renewables, which are still in early development.
The pandemic accelerated many trends in place which catapulted us from a world in which growth and inflation were tepid and change was slow to one that is more volatile and requires more agility and resilience. That does not make it good or bad, just different. Firms that lean into those shifts will find opportunity; those that don’t will lag.
I will end where I started, with Louis Armstrong’s iconic hit. After sharing time with my 20-something children in recent weeks, one verse stood out:
I hear babies cry
I watch them grow
They’ll learn more
Than I will ever know
And I think to myself
What a wonderful world.
I know how heart-wrenching a cancer diagnosis is and how lucky I am to have caught several early. My kids proved a beacon of light in what seemed an ocean of darkness. May the economy be as fortunate, and our youth continue to inspire us with their brilliance. Happy holidays.
COVID-19 Update for December 26, 2022-Cases, the Economy and More
Thanks to falling infection numbers, Los Angeles County on Thursday, Dec. 22, moved out of the federal government’s “high” COVID-19 activity category and into the “medium” level, but the county’s health director warned that transmission remains elevated and urged people to exercise caution over the holidays.
As of Thursday, the county’s average rate of new COVID cases was 180 per 100,000 residents, down from 204 per 100,000 a week ago.
That dropped the county below the threshold of 200 per 100,000 residents for the “high” community activity level set by the U.S. Centers for Disease Control and Prevention.
County Public Health Director Barbara Ferrer said the county over the past week averaged about 2,600 new COVID infections per day, a roughly 12% decline from 3,000 per day the previous week. Despite the decline, she stressed that “transmission does remain elevated” in the county, noting again that the official case numbers are an undercount due to the widespread use of at-home tests — the results of which are not reported to the county — and due to people who don’t get tested at all.
Moving from the “high” to the “medium” category will not have any impact on public health restrictions, although it decreases the likelihood of the county re-imposing an indoor mask-wearing mandate, which Ferrer previously said could be done if case rates and hospitalization numbers continued to increase.
She urged residents to “layer in protections over the next few weeks,” such as wearing masks in crowded indoor settings, staying home when sick and getting tested before attending large gatherings.
Mask wearing continues to be “strongly recommended” by the county at indoor public settings. But Ferrer said that even absent a mandate, residents should start wearing them, given the elevated rate of transmission.
Masks are still required indoors at health-care and congregate-care facilities, for anyone exposed to the virus in the past 10 days, and at businesses where they are required by the owner.
Ferrer said the county is averaging 178 new COVID-related hospital admissions per day, about a 10% drop from a week ago, but she said the number is still at its highest level since April, even higher than during the summer surge in infections.
The number of available staffed hospital beds in the county, meanwhile, continues to remain at its lowest level in four years, averaging 210 during the month of December. She said bed availability is impacted by both the number of patients and the level of hospital staffing.
The average number of daily virus-related deaths reported by the county also remains elevated, rising to 21 per day over the past week, up from 16 per day a week ago and more than double the rate from the beginning of the month.
She noted the vast majority of deaths are occurring in people aged 70 and older, reflecting the population that is also being hospitalized due to the virus at the highest levels.
According to state figures, there were 1,256 COVID-positive patients in county hospitals as of Thursday, down from 1,274 on Wednesday. Of those patients, 150 were being treated in intensive care units, down slightly from 152 the previous day.
Health officials have estimated that roughly 40% of patients with the virus were admitted for actual COVID-related ailments, while others were hospitalized for other reasons, with many only learning they were infected upon admission.
Another 23 deaths were reported Wednesday, raising the county’s overall virus-related death toll to 34,515.
The seven-day average daily rate of people testing positive for the virus was 11.4% as of Wednesday, up from 10.4% a week ago.
Long Beach’s coronavirus transmission elevated to the medium tier two weeks ago, when its weekly average COVID-19 case rate topped 200 per 100,000 residents.
The city, which operates its own independent health department, remained in the elevated tier last week, and reported an additional 1,053 new cases as of Friday, Dec. 16.
Prior to Long Beach’s move to medium transmission, the city’s COVID-19 metrics had been steadily increasing for weeks — with health officials cautioning residents against rising rates of the virus alongside higher than usual instances of influenza and respiratory syncytial virus, or RSV.
Pasadena Public Health, which operates independently from Los Angeles County’s Department and the city of Long Beach, reported 43 new coronavirus cases in Pasadena as of Thursday, Dec. 22, slightly less than it reported last Thursday.
No new deaths were reported, however, the department estimates 2,555 probable cases of COVID-19 in the city.
Pasadena Health Officer Dr. Eric Handler said the region is witnessing increases in COVID-19 cases and local hospitalizations, “and unseasonably elevated levels of influenza infections that put our local residents at increased risk for severe illness and death.”
City health officials, as a result, revised the city’s health order to “strongly recommending” residents mask up this holiday weekend to ensure hospitals are not overstressed.
The Economy: From the Pasadena Star-News: The combined GDP for Los Angeles, Orange, San Bernardino and Riverside counties was $1.12 trillion for 2021, the fourth consecutive year with 13 digits in the total. Other than California in its entirety, the only states with greater output were Texas’ $1.82 trillion and New York’s $1.51 trillion. Florida was No. 4 nationally with its GDP hitting $1 trillion for the first time.
And looking at the World Bank’s global scorecard, Southern California’s output was slightly larger than all the business done in the Netherlands, the 17th biggest economy on the planet.
Southern California’s output was up $40 billion vs. the 2018-19 average – an increase that exceeds Wyoming’s entire $36 billion GDP for one year. Only four states – California, Texas, Florida and Washington – had bigger GDP growth since 2018-19.
But here’s a sour note: When the region’s economic heft was measured against the growth, the pace looked slow.
The four-county region’s 3.7% GDP growth vs. 2018-19 trailed the nation’s 4.1% overall expansion rate. And Southern California badly trailed the 9.2% growth found in the Golden State’s other 54 counties combined.
Also from the Star-News: A measure of inflation closely watched by the Federal Reserve slowed last month, another sign that a long surge in consumer prices seems to be easing.
Friday’s report from the Commerce Department showed that prices rose 5.5% in November from a year earlier, down from a revised 6.1% increase in October and the smallest gain since October 2021. Excluding volatile food and energy prices, so-called core inflation was up 4.7% over the previous year. That was also the smallest increase since October 2021.
On a month-to-month basis, prices rose 0.1% from October to November after rising 0.4% the previous month. Core prices rose 0.2%.
Inflation, which began surging a year and a half ago as the economy bounced back from 2020’s coronavirus recession, still remains well above the 2% year-over-year growth the Fed wants to see.
The central bank has raised its benchmark interest rate seven times since March in an attempt to bring consumer prices under control.
Higher prices and borrowing costs may be taking a toll on American consumers. Their spending rose just 0.1% from October to November and didn’t rise at all after adjusting for higher prices.
Americans’ after-tax income, however, rose 0.3% in November even after accounting for inflation.
There was far less poverty in 2020 and 2021. The improvement was by no means just in California. The rest of the nation saw a 7.6 million drop in those living in poverty. The No. 2 dip was found in Texas at 868,000, followed by Florida at 702,000, Illinois at 456,000 and New York at 424,000.
Yes, tons of pandemic-related federal and state aid to all Americans – much of it targeting lower-income households – was key.
The big drops came in big states with big poverty challenges. So, we’ll also tip our caps to where poverty fell at the fastest rate.
California’s 23% percentage drop only ranked 32nd among the states. Best was Maine, off 43%, then Oregon, down 36%, New Jersey and South Dakota, down 33%, and New Hampshire, down 32%.
Declining poverty wasn’t just a pandemic occurrence. Improvements were also found in 2019, comparing that year’s data to 2009 – in the middle of the Great Recession and the first year for this new poverty count.
COVID-19 Update for December 19, 2022-Cases Rising, Falling, Rising, Falling...the Economy and More
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Masking: Pasadena Public Health Department health officer orders were escalated Thursday to “strongly recommend” masking for everyone ages 2 years and older, regardless of vaccination status, in indoor public spaces, indoor workplaces, and on public transit. Indoor masking continues to be required in all healthcare settings.
In addition to escalating the indoor masking recommendation, the revised health officer orders establish threshold criteria that would lead to mandatory masking in Pasadena.
A City statement on Friday said local hospitals and healthcare facilities are significantly strained. “Managing high levels of COVID-19 cases is an ongoing challenge for the healthcare system and limits resources available for helping those in need of treatment,” according to the statement.
The revised order refers to Los Angeles County’s “High Transmission” level as being an influencing factor.
“In Los Angeles County where a large proportion of the people who work, visit, or patronize businesses in Pasadena reside, the rate of COVID-19 cases has remained in the “High Transmission” level as defined by the Centers for Disease Control and Prevention (CDC), contributing to risk of transmission in this City,” the health order says.
Pasadena Public Health Dept. statistics show the 7-day average of COVID-19 cases fell as of Thursday to 31.7 new daily cases, down from a 7-day average of 43.6 new daily new cases on Dec. 1. However, December as a whole has seen an increase in COVID cases in Pasadena.
As of Dec. 12, Huntington Hospital reported 39 COVID-infected patients, of whom 64% were vaccinated. The hospital reported 6 in intensive care, of whom 67% were unvaccinated.
The updated health orders establish threshold metrics, including COVID-19 infections, hospitalizations and staffed inpatient hospital beds, to determine when mandatory masking indoors will be required.
The City said the Pasadena Public Health Department urges everyone to take precautions to reduce the transmission of COVID-19 and other respiratory diseases including:
- Wearing a well-fitting respirator or mask (e.g., N95, KN95, KF94)
- Staying up to date with COVID-19 vaccination, including all primary series doses and boosters, and getting a flu vaccine
- Staying home when sick and following recommended practices if exposed to COVID-19, including seeking treatment
- Testing if you are sick or have been exposed to someone with COVID-19
- Washing hands regularly.
Cases: L.A. County sees declining COVID rates-Respiratory illnesses, including flu, in kids and adults remain a strain on hospitals. By Luke Money, Rong-Gong Lin II and Emily Alpert Reyes for the LA Times.
The number of newly reported COVID-19 cases has ticked down in Los Angeles County, a reprieve following weeks of increases.
Whatever the wider prognosis for the winter , this dip will almost surely delay the return of a public indoor mask mandate in the nation’s most populous county.
For the week to Tuesday, L.A. County’s case rate was 3,148 a day, down 18% from last week. On a per capita basis, that’s 218 cases a week for every 100,000 residents. A rate of 100 or more is considered high.
Many experts caution that official case figures, while a useful metric, are likely a significant undercount due to the proliferation of at-home tests, which are not reliably reported to public health agencies.
The drop in case numbers is more meaningful when accompanied by a slowdown of coronavirus-positive hospitalizations. For the week to Monday, there were 1,359 new coronavirus-positive hospital admissions across L.A. County, down 9% from a seasonal peak of 1,481 for the week to Dec. 2.
It’s not a given that the declines will continue. During the second Omicron wave last spring and summer, there were several brief downturns in the case rate and subsequent increases before the peak in late July.
With holiday travel and festivities still on tap , conditions could be ripe for an uptick in transmission.
Though it’s not required, L.A. County strongly recommends masking in indoor public settings, as do officials with the California Department of Public Health and the Centers for Disease Control and Prevention.
L.A. County is the only part of California that has publicly committed to instituting a public indoor mask mandate should pandemic conditions worsen to the point that COVID-19 is exerting sustained pressure on hospitals.
Specifically, the weekly rate of new coronavirus-positive hospital admissions would have to be at least 10 per 100,000 residents, and at least 10% of staffed inpatient hospital beds would need to filled with such patients for two consecutive weeks. The criteria were determined by the county Public Health Department based on guidelines from the U.S. Centers for Disease Control and Prevention.
L.A. County has already hit the first threshold and before the recent stabilization appeared on track to reach the second in late December. But the latest numbers extend that timeline, and officials last week expressed cautious optimism that a masking order can be avoided.
Even with the downturn, transmission remains high. L.A. County’s weekly case rate last week reached a seasonal high of 272 for every 100,000 residents. Even at a lower rate — around 260 — a gathering of 200 people would have an 80%-90% chance of including at least one infected person. That’s why it remains important to take precautions, experts say.
Staying home when sick, taking rapid tests before attending large events and restricting gatherings to outdoors can help.
Additionally, it’s important to stay up to date on COVID-19 vaccinations, including the updated bivalent booster , experts say.
Because of the prior uptick in cases and hospitalizations in L.A. County, COVID-19 deaths are increasing. The county reported 103 deaths for the week that ended Tuesday, up 34% from the prior week and the first time the rate has exceeded 100 since the summer.
The summer peak was 122 deaths, for the week that ended Aug. 6.
In addition to COVID-19, L.A. County is grappling with high levels of influenza.
The emergency room at Children’s Hospital Los Angeles, where the flu positivity rate is 18%, remains so stressed that it cannot always accommodate transfers from other facilities.The cumulative flu hospitalization rate is higher for this time of the season than it has been for the last dozen years, according to the CDC.
Some California hospitals have had to set up tents outdoors to handle the increased demand, including Huntington Hospital in Pasadena, UC San Francisco Benioff Children’s Hospital in San Francisco and facilities in San Diego County. Pomona Valley Hospital Medical Center recently had a record high number of patients at its emergency department in a single day.
Children’s hospitals in Orange County have been so stressed with viral illnesses that the health officer has declared a health emergency. Officials say the numbers of patients at emergency departments are at unprecedented levels, forcing playrooms to be converted into care areas.
Dr. Nancy Gin, regional medical director of quality and clinical analysis at Kaiser Permanente Southern California, said Friday that cases of respiratory syncytial virus among young children seem to have crested in the previous weeks.
However, she said, “what we’re seeing is now people are having co-infections with flu and COVID” or other viral combinations.
Flu and RSV this year descended much earlier than usual, so “even without having COVID numbers shooting out the roof, as we did last year with Omicron, we are experiencing a constellation of illness for the community,” Gin said. “And that’s what’s different.”
Bailey of Providence said one wrinkle is that the flu treatment Tamiflu is in limited supply.
Vaccines: From the New York Times: Updated booster shots have bolstered Americans’ defenses against serious Covid, reducing the risk of hospitalization by roughly 50 percent compared with certain groups inoculated with the original vaccines, the Centers for Disease Control and Prevention reported in a pair of studies published on Friday.
The research represents the agency’s first look at how the reformulated boosters, tailored to protect against recent Omicron variants, are performing in the prevention of severe consequences of infection with the virus, including emergency department visits and hospitalizations.
Federal health officials are urging Americans to get the updated booster shots, hoping to revive a lagging vaccination campaign. So far, though, fewer than a fifth of American adults and only a third of people ages 65 and older have received updated shots, reflecting a retreat in many parts of the country from the more aggressive vaccination drives earlier in the pandemic.
New virus variants that are better able to dodge the immune system have gained traction, and Covid cases and hospitalizations have climbed in recent weeks. About 375 Americans are dying each day on average, an increase of 50 percent over the past two weeks. Older people have been hit especially hard.
The virus has exacerbated the difficulties facing a health care system already under strain from resurgences of the flu and respiratory syncytial virus after two years of reductions in those infections.
From the New York Times: Long Covid has caused or contributed to at least 3,500 deaths in the United States, an analysis of death certificates by the Centers for Disease Control and Prevention found.
The study, published on Wednesday, is believed to be the first nationwide examination of whether long Covid or related terms appear in official American death records. While it found that such phrases were recorded in only a tiny proportion of the more than a million deaths tied to infection with the coronavirus, the researchers and other experts said the results added to growing recognition of how serious long-term post-Covid medical problems can be.
Long Covid is a complex constellation of symptoms that can last for months or longer and can affect virtually every organ system. Some of the most debilitating post-Covid symptoms are breathing problems, heart issues, extreme fatigue and cognitive and neurological issues.
Nearly 57 percent of deaths related to long Covid were in people 75 and older. Nearly a third of the death certificates that mentioned long Covid listed the underlying or main cause of death as a non-Covid condition such as heart disease, cancer or Alzheimer’s.
Experts evaluating the C.D.C. study cautioned that it was both an incomplete picture of mortality linked to long Covid and of the larger toll of the condition, which has been estimated by the Government Accountability Office to have affected 7.7 million to 23 million people in the United States.
The Economy: From the Pasadena Star-News and Jonathan Lansner: Southern California’s bosses added 55,600 workers in November — slightly below the month’s average hiring pace.
State job figures released Friday, Dec. 16, found 8.05 million at work in Los Angeles, Orange, Riverside and San Bernardino counties in November, up 341,300 in 12 months. November employment was 92,600 above pre-pandemic November 2019.
November’s hiring pace was faster than the 28,442 workers added monthly on average in the past year. The month is typically a busy one for hires as bosses staff up for holiday shopping and year-end events. Between 2015 and 2019, the average November added 64,060 jobs in the region.
Southern California retailers added 15,900 jobs in November. Transportation/warehouses grew staffs by 9,400 and restaurants had 1,400 more workers.
The below-par hiring is more likely due to a shortage of job candidates rather than the Federal Reserve’s attempt to cool an overheated economy with higher interest rates. However, the more rate-sensitive industries including construction, real estate and finance dropped 3,700 positions last month across the region.
One way to see the supply of workers is to gauge the tally of the jobless plus the employed. That local workforce of 8.74 million for November was down 14,600 in a year and off 234,800 in three years. That 3% shrinkage is a reason bosses are struggling to fill open positions.
Southern California joblessness did tick up to 4.1% in November compared with 4% in October. But it’s down from 5.6% a year earlier. November’s 360,500 cohort counted as “out of work” was up 7% in three years — still short of full recovery.
Here’s how the job market was growing across the region’s key metropolitan areas …
- Los Angeles County: 4.64 million workers after adding 37,200 in a month and growing by 193,800 in a year. Unemployment: 4.5% – same as a month earlier – 5.6% a year ago and 4.1% three years ago.
- Orange County: 1.7 million workers after adding 5,600 in a month and growing by 73,100 in a year. Unemployment: 3% vs. 2.8% a month earlier; 3.7% a year ago; 2.7% three years ago.
- Inland Empire: 1.7 million workers after adding 12,800 in a month and growing by 74,400 in a year. Unemployment: 4.2% vs. 4% a month earlier; 5% a year ago; 3.8% three years ago.
From the New York Times: Retail sales fell in November, with spending on even traditionally popular gift categories like clothing and sporting goods declining, a sign that high prices for necessities like food are affecting how people approach the holiday shopping season.
U.S. retail sales fell 0.6 percent in November from October, the Department of Commerce said on Thursday. The figure does not account for price changes, and inflation did ease slightly during the month.
Spending increased in some areas, including at grocery stores, health and personal care stores and restaurants and bars. But categories like motor vehicles, furniture, consumer electronics, clothing and sporting goods all declined. Gas prices also fell during the month, meaning consumers spent less money filling up their cars.
Inflation in November slowed to 7.1 percent through the year, down from 7.7 percent in October. Some analysts pointed out that lower prices affected the retail sales figure. “Less inflation is driving some of that decline from October to November, which wouldn’t be a bad thing,” David Silverman, a senior director at Fitch Ratings, said.
In many ways, the report highlights how inflation, even if it has eased, has changed the way consumers are approaching the holiday season. Americans, for example, are whittling down the number of people they are giving gifts to, according to data from KPMG.
The Federal Reserve on Wednesday raised its benchmark policy rate by half a percentage point and signalled its intention to keep squeezing the US economy next year, as central banks on both sides of the Atlantic enter a new phase in the battle against inflation.
The European Central Bank has slowed the pace of its interest rate increases, in line with rate-setters in the US and UK, raising borrowing costs by half a percentage point and warning of further rate rises to come.
Inflation: Inflation slowed more sharply than expected in November, an encouraging sign for both Federal Reserve officials and consumers that 18 months of rapid and unrelenting price increases are beginning to meaningfully abate.
The new data is unlikely to alter the Fed’s plan to raise interest rates by another half point at the conclusion of its two-day meeting on Wednesday.
But the moderation in inflation, which affected used cars, some types of food and airline tickets, caused investors to speculate that the Fed could pursue a less aggressive policy path next year — potentially increasing the chances of a “soft landing,” or one in which the economy slows gradually and without a painful recession.
Stock prices jumped sharply after government data showed that inflation eased to 7.1 percent in the year through November, down from 7.7 percent in the previous reading and less than economists had expected.
From the New York Times: At this time last year, economists were predicting that inflation would swiftly fade in 2022 as supply chain issues cleared, consumers shifted from goods to services spending and pandemic relief waned. They are now forecasting the same thing for 2023, citing many of the same reasons.
But as consumers know, predictions of a big inflation moderation this year were wrong. While price increases have started to slow slightly, they are still hovering near four-decade highs. Economists expect fresh data scheduled for release on Tuesday to show that the Consumer Price Index climbed by 7.3 percent in the year through November.
That raises the question: Should America believe this round of inflation optimism?
Economists are slightly less optimistic than last year.
Economists see inflation fading notably in the months ahead, but after a year of foiled expectations, they aren’t penciling in quite as drastic a decline as they were last December.
The Fed officially targets the Personal Consumption Expenditures index, which is related to the consumer price measure. Officials particularly watch a version of the number that illustrates underlying inflation trends by stripping out volatile food and fuel prices — so those forecasts give the best snapshot of what experts are anticipating.
Last year, economists surveyed by Bloomberg expected that so-called core index to fall to 2.5 percent by the end of 2022. Instead, it is running at 5 percent, twice that pace.
This year, forecasters expect inflation to fade to 3 percent by the end of 2023.
The Federal Reserve’s predictions have followed a similar pattern. As of last December, central bankers expected core inflation to end 2022 at 2.7 percent. Their September projections showed price increases easing to 3.1 percent by the end of next year. Fed officials will release a new set of inflation forecasts for 2023 on Wednesday following their December policy meeting.
Supply chains are healing.
One reason to think that the anticipated but elusive inflation slowdown will finally show up in 2023 ties back to supply chains.
At this time last year, economists were hopeful that snarls in global shipping and manufacturing would soon clear; consumer spending would shift away from goods and back to services; and the combination would allow supply and demand to come back into balance, slowing price increases on everything from cars to couches. That has happened, but only gradually. It has also taken longer to translate into lower consumer prices than some economists had expected.
What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
How does inflation affect the poor? Inflation can be especially hard to shoulder for poor households because they spend a bigger chunk of their budgets on necessities like food, housing and gas.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
But the expected shift is finally, if belatedly, showing up. After months of supply chain healing, consumers are now beginning to feel the benefit. Used car prices began declining meaningfully in October inflation data, furniture prices are slumping and apparel is falling in price. Similar cost declines are expected to weigh on inflation next year.
“It is far too early to declare goods inflation vanquished, but if current trends continue, goods prices should begin to exert downward pressure on overall inflation in coming months,” Jerome H. Powell, the Fed chair, said during a recent speech.
The Fed is working on cooling demand.
Unfortunately, moderation in goods prices alone would probably fail to return America to a normal inflation rate, because price increases for services have been accelerating. That category — which covers everything from meals out to monthly rent — accounted for half of consumer price inflation in October, based on a Bloomberg breakdown, up from less than a third a year earlier.
Many types of service inflation are closely intertwined with what’s happening in the job market. For companies including hair salons, restaurant chains and tax accountants, paying employees is typically a major, if not the biggest, cost of doing business. When workers are scarce and wages are climbing rapidly, businesses are more likely to raise their prices to try to cover heftier labor bills.
That means that today’s very low unemployment and abnormally rapid wage growth could help to keep price increases faster than usual, even though the job market wasn’t a big driver of the initial burst in inflation.
That is where Fed policy could come in. Companies can only charge more if their customers are able — and willing — to pay more. The Fed can stop that chain reaction by lifting interest rates to slow demand.
Policymakers have raised interest rates from near-zero at the start of 2022 to nearly 4 percent, and are expected to make another interest rate increase this week. Those moves have made it more expensive to borrow money to buy a house, finance a big purchase or expand a business.
The knock-on effects are now trickling through the economy: Fewer house sales could eventually mean less hiring in construction and manufacturing, which in turn would mean less spending in the local economies where would-be builders and factory workers live. As the job market slows down and wage growth moderates, demand is expected to weaken for everything from dinners out to air travel.
Understand Inflation and How It Affects You
Social Security: The cost-of-living adjustment, which helps the benefit keep pace with inflation, will be 8.7 percent next year. Here is what that means.
Inflation Forecasts: Economists misjudged how much staying power inflation would have. Next year could be better — but there’s ample room for humility.
Tax Rates: The I.R.S. has made inflation adjustments for 2023, which could push many people into a lower tax bracket and reduce tax bills.
Your Paycheck: Inflation is taking a bigger and bigger bite out of your wallet. Now, it’s going to affect the size of your paycheck next year.
“Slower wage growth will reduce upward pressure on services inflation,” economists at Goldman Sachs predicted. But the process might take time. They expect the labor market for health care workers in particular to remain hot and put upward pressure on inflation next year, for instance.
Rent growth is moderating.
In one service category, though, a 2023 inflation deceleration is a fairly sure bet: rents.
Rent increases take time to flow into measured inflation because existing tenants do not start paying more until they renew their leases. That means that a 2021 pop in new rents has been slowly working its way into the official price numbers, pushing up inflation throughout 2022.
Market-based rents have begun to cool or even fall in recent months, which suggests that rent growth should also begin to moderate. The uncertainty is when the slowdown will happen — some economists think as early as next spring — and how quickly rents will decelerate.
But big wild cards remain.
The challenge with forecasting inflation is that while it is possible to make guesses about specific categories like rent, many inflation drivers come as a surprise. Forecasters in 2021 could not have guessed that Russia would invade Ukraine in early 2022, sharply pushing up food and fuel prices.
Likewise, it is hard to guess what will happen on the geopolitical stage next year. An escalation of the conflict in Europe could put renewed pressure on gas prices. The return of Chinese consumers after years of rolling lockdowns could lead to more people competing for goods in the global market.
And things could simply take longer than expected to return to normal. That’s partly what happened in 2022. Consumption and the labor market both outstripped expectations, keeping the pressure on prices.
“The economy was more resilient than expected,” said Laura Rosner-Warburton, senior economist at Macro Policy Perspectives. “Supply chain problems lasted a lot longer than expected and have been difficult to forecast on the way up and down.”
How quickly demand will slow is still uncertain. The labor market is expected to cool, but for now it is strong. And many households are still in solid financial shape. They amassed $2.3 trillion in extra savings during the pandemic thanks to months stuck at home and government stimulus, and still had about $1.7 trillion of that by mid-2022, based on Fed research.
Those nest eggs have helped Americans to sustain their spending this year, giving companies the ability to raise prices without scaring away customers — a trend that could continue, at least for a while.
The challenge in forecasting, Mr. Furman said, is that there’s “a powerful desire to tell a happy story.” So far, inflation has been anything but.
Inflation in the UK dipped to 10.7 per cent in November as lower petrol prices helped to ease the rate of price increases from a 41-year high last month.
COVID-19 Update for December 12, 2022-Cases, the Economy and More
Cases: From PasadenaNOW: Mask Mandate Looms in LA County, Pasadena Not Seeing Similar Increase in Hospitalizations, Deaths-County Officially Experiencing ‘High' COVID Activity.
Los Angeles County moved into the federal government’s “high” COVID-19 activity category Thursday, sparking stepped-up warnings of widespread transmission of the virus and moving the area closer to another indoor mask-wearing mandate.
Pasadena, which operates its own public health department, is monitoring increased but not ‘high’ category COVID-19 activity.
The County had been in the U.S. Centers for Disease Control and Prevention’s “medium” COVID activity level. But that changed Thursday when the County’s average rate of new infections rose to 258 per 100,000 people — well above the threshold of 200 per 100,000 to qualify the County for the “high” activity level.
County Public Health Director Barbara Ferrer said the move will not trigger a return to any lockdowns or business closures that were imposed at the height of the pandemic. But she warned that being in the “high” category means the virus is rampant in the area, and the odds of being exposed are growing.
She noted that with the current infection rate, there’s an 80% to 90% chance that at least one person is infected with the virus at an event or gathering of 200 people.
Ferrer has said the County will re-impose an indoor mask mandate if it remains in the “high” category and if the County’s virus-related hospitalization numbers reach two thresholds:
- if the rate of daily hospital admissions tops 10 per 100,000 residents; and
- if the percent of staffed hospital beds occupied by COVID patients tops 10%.
The County has already surpassed the first threshold, with the rate of daily hospital admissions already at 14.8 per 100,000 residents as of Thursday. The percent of hospital beds occupied by COVID patients was 6.9% as of Thursday, still below the 10% threshold.
At the Huntington emergency department in Pasadena, Shriner estimated that twice as many people as usual were coming in daily. For patients who arrive with less severe illnesses or injuries, that can mean “very long” wait times, ranging from six to 11 hours.
Besides the growing number of people coming to its emergency room, Huntington is also being squeezed as it tries to discharge patients to skilled nursing facilities that are also short on staff, Shriner said.
The situation playing out across the Southland is in some ways the manifestation of a long-held fear.
Officials have worried throughout the pandemic about the potential risks of another disease circulating widely at the same time as COVID-19. But while previous “twindemics” failed to materialize in the face of disastrous coronavirus surges, California is now simultaneously contending with a spike in coronavirus transmission, an early onslaught of respiratory syncytial virus, or RSV, and a historically strong start to the flu season.
According to the U.S. Centers for Disease Control and Prevention, the cumulative flu hospitalization rate nationally is higher for this time of year than every season since 2010. The agency considers flu levels in California to be “very high” and among the worst in the country.
Hospitals have also for weeks grappled with RSV, which can cause significant illness, respiratory distress and even death. Young children and older people are particularly at risk.
At the hospital in Orange, “the numbers are really unprecedented,” and the emergency room is seeing more than 400 children each day, said Cunningham, who is also chair of pediatrics at UC Irvine.
At CHOC, to help move children into hospital rooms more quickly, a theater where hospitalized children had been able to watch movies has been repurposed as a “discharge lounge” for those ready to go home but awaiting a ride or instructions for their families. Playrooms have been converted for patients to use. Beds have been set up in the hallway of the emergency room with privacy screens around them, she said. The viral pile-on means that the hospital has to be careful about rooming children together, complicating its scramble for space.
So far, the current coronavirus wave is nowhere near as large as the last two fall and winter surges. And there is optimism that a high level of vaccine coverage as well as the availability of updated boosters and effective therapeutics will keep this surge from reaching those same harrowing heights.
However, the ultimate confluence of COVID-19, flu, RSV and other respiratory illnesses remains unclear.
In Los Angeles County, coronavirus case and hospitalization rates continue to worsen, raising the possibility of a renewed indoor mask order in indoor public settings as soon as early January.
For the first time since summer, L.A. County on Thursday entered the high COVID-19 community level — in which the CDC recommends universal masking in indoor settings. But there are initial signs the rate of increase in cases and hospitalizations is slowing.
The rate of new coronavirus-positive admissions over the last week climbed by 24%, a softer jump than the prior week-over-week increase of 38%. And the share of staffed hospital beds being used by coronavirus-positive patients climbed 23% from the prior week, a gentler increase than last week’s jump of 40%.
Pomona Valley has seen its numbers of COVID-positive patients roughly triple from a month ago, Scafiddi said, and the majority are sick with COVID-19 rather than incidentally infected. Growing numbers of people are being hospitalized for flu and RSV as well.
This surge has hit children and teens differently. As COVID-19 cases spiked last winter, the Pomona hospital closed its pediatric unit to make room for adult patients, according to Scafiddi. This year, as COVID-19 and other viruses are spreading, it has had as many as 18 pediatric patients at a time — triple the usual number for this time of year, she said.
At Huntington, Shriner said that as hospitals brace for another winter with COVID-19, “we certainly know how to handle it better and we’re in much better shape now than we ever were before. But it’s challenging.” She urged people to get their flu shot and take other precautions.
Kids’ medicine harder to find as viruses surge-Rising COVID, RSV and flu cases boost the demand. No need to stockpile, makers say.
By Salvador Hernandez for the LA Times.
As flu season approached, Antonieta Garcia knew it was time to replenish her supply of cough suppressants and fever reducers. But this year, she often walks into a store and finds only empty shelves.
The 44-year-old East Los Angeles mother of two tries to keep a fully stocked medicine cabinet because her 2-year-old is immunocompromised and her 12-year-old has asthma. One cold or flu could mean a trip to an ER, and with a surge in respiratory illnesses driving up demand for kids’ medicine, Garcia said she feels like she’s fighting a war on all fronts.
With COVID-19, flu and respiratory syncytial virus cases rising in children, drugmakers and retailers say it’s soaring demand — not a shortage in supply — that’s leading to empty shelves. And stockpiling by parents who fear they won’t be able to find medicine when they need it could make the problem worse.
Across the country, pharmacies working to restock quickly are struggling to keep up, echoing the early-pandemic shortages of toilet paper , hand sanitizer and some medicines.
Some parents who dealt with those shortages worry about how long shelves will stay empty. Garcia said she now starts every trip to Target or the supermarket at the medicine aisle.
Johnson & Johnson, the maker of Tylenol, said that it is running production facilities 24 hours a day and that there is no shortage of its products in the United States.
Parents’ difficulty in finding over-the-counter cold medication has been due to a surge on the demand side, not any problems on the supply side, the Consumer Healthcare Products Assn. said.
From the New York Times: As Covid Cases Rise in a Weary Los Angeles, So Does Apathy - Hospitalizations and Covid cases have increased sharply in Los Angeles since Thanksgiving. But fear — and masks — are missing this time around.
As has happened each December, Covid-19 cases are ratcheting up in Los Angeles County, with hospitalizations nearly tripling in the past month — a signal that another mask mandate could be on the horizon.
The region is no stranger to pandemic orders, having experienced stringent lockdowns and a state-imposed curfew in late 2020.
But this time around, even as the numbers in Los Angeles become the highest in California, many have grown weary of warnings and talk of precautions. Covid updates do not elicit the unease they once did — in part because cases and hospitalizations during the current outbreak are nowhere near where they were during the worst stretches. But also because the subject has grown tiresome, residents said.
“I think it’s just kind of run its course with me,” said Kirk Carter, 60, a retired television writer who lives in Los Angeles. “It’s become normalized.”
When Mr. Carter, who is vaccinated and boosted, recently took a trip to New York to visit his daughter, he felt no need to don a mask while on the plane, which he had always found uncomfortable.
“I’m less worried about getting sick by Covid than I am about being inconvenienced by Covid,” he said.
That feeling is reflected across the nation even as it is once again experiencing an uptick in cases in the weeks after Thanksgiving. New case reports and hospitalizations are up by more than 25 percent, and test positivity rates are rising quickly, particularly in major urban areas.
The virus is likely spreading faster than case numbers suggest because people are increasingly relying on at-home tests and are not reporting the results. And epidemiologists warn that it is too early to declare that this winter will be less severe than during the past two years, especially as Americans gather again for the holidays later this month.
While healthy individuals seem less concerned about Covid this December, the virus spread poses serious risks for older people and those who are immunocompromised.
From the LA Times: Home-price dip stirs worry-As equity drops in Southern California, homeowners may curtail spending. By Andrew Khouri
Surging mortgage interest rates threatened to squash Michael and Christine Hawkins’ dream of home ownership. But this fall when the couple saw a Canoga Park condo languish on the market, they devised a plan.
They’d submit a lowball offer they could stomach if they cut back on vacations, shopping and eating out. In a year, when they hoped interest rates would have dropped, they could refinance and free up their budget.
Last month, amid a decline in overall home values, the Hawkinses, both in their 30s, closed on the two-bedroom condo for 7% less than asking. But they may be stuck with a high payment for the foreseeable future, because if home prices keep falling, they might not have enough equity to refinance.
For the first time in a decade, Southern California homeowners, and those across the country, are seeing their equity fall en masse, the result of higher mortgage interest rates that have sapped purchasing power and sent home values down.
Real estate analysts said the loss in equity — which is expected to deepen — could curtail economic growth as people have less to spend on home renovations, pay for emergencies or invest in a business.
The shift in the market is unnerving some recent buyers who told The Times they worry falling prices will trap them in their mortgages and have personal consequences such as tight budgets and delayed retirement.
Since there’s also thousands — often tens of thousands — of dollars to pay in origination and other fees, even those with some equity left often cannot afford to sell or refinance and can become vulnerable to a credit-damaging foreclosure or short sale, particularly if they lose their job or have a medical emergency.
Underscoring the importance of home equity in a society where many lack savings and face eye-popping medical bills, one study found that cancer patients with no equity are more likely to refuse treatment and die than patients with positive equity, who tend to pull money out of their homes and are more likely to accept treatment.
Overall, U.S. homeowners with a mortgage have lost a collective $1.5 trillion in equity since the May peak, an 8% reduction, according to September data from mortgage services company Black Knight. The number of underwater mortgages — those on which someone owes more than their home is worth — has more than doubled, to roughly 450,000 nationwide.
For now, the number of people with little to no equity is tiny compared with the aftermath of the Great Recession, even if it’s rising.
In 2011, an estimated 30% of mortgaged U.S. homes, or 16 million, were underwater, according to Black Knight data. At the end of September, that percentage stood at 0.84%, about back to where it was at the start of the pandemic.
Those most at risk are people who purchased this year.
Black Knight data show 8% of U.S. households who bought a home with a mortgage in 2022 are already underwater, while nearly 40% have less than 10% equity.
Andy Walden, vice president of research at Black Knight, said he expects more people will fall underwater in coming months as home price declines continue. But the ranks of people with very little to no equity is unlikely to approach levels seen during the last housing bust.
That’s in large part for two reasons, Walden said: Prices shouldn’t fall as much this time around, and people had more equity to begin with. Both those factors are in part due to tighter lending standards imposed after the 2007-08 financial crisis. And a steady rise in home prices since 2012, along with a 43% pop during the pandemic, also buoyed homeowner balance sheets.
According to a recent Reuters survey, economists expect a median decline from peak to trough of 12%, averaged across major U.S. metro areas — about one-third of the drop seen after the early 2000s housing bubble burst.
Estimates within that survey, however, were as high as 30% for today’s declines.
'Black Knight recently modeled what a 15% national decrease would look like. An estimated 3.7% of home mortgages, or 1.9 million, would then be underwater, putting those homeowners at heightened risk of foreclosure. Overall, mortgage holders would see $4.5 trillion in equity erased.
Boston University economist Adam Guren said falling home prices cause consumers to cut back, mostly because they have less equity to tap and spend through home equity lines of credit and cash-out refis, but also because as prices decline some people feel poorer.
Guren, who has studied the so-called housing wealth effect, said a 15% decline is a “pretty big” assumption, but said research suggests it would cause consumers to reduce spending by roughly $193.5 billion to $322.5 billion.
COVID-19 Update for December 5, 2022-Cases, the Economy, the Flu and More
Cases: The 7-day average number of coronavirus patients at Huntington Health in Pasadena has spiked dramatically in recent days, lagging but mirroring to an extent Los Angeles County’s steady increases in daily infections and hospitalizations since the beginning of November.
As of Thursday, Pasadena’s 7-day average number of new confirmed COVID-19 cases had climbed 137% higher than the rate seen at the beginning of November. As of Friday, the County’s average daily number of new infections over the past seven days was up 44.9 percent.
The current surge is being blamed largely on a pair of new variants of the virus, known as BQ.1 and BQ.1.1. Both are offshoots of the BA.5 variant that was blamed for rises in infection numbers earlier this year.
Ferrer said Thursday that the rising case and hospitalization numbers have moved Los Angeles County from the “low” COVID community activity level to the “medium” category, as defined by the U.S. Centers for Disease Control and Prevention. She said the County is on pace to reach the “high” level in a matter of days, when the rate of new cases reaches 200 per 100,000 residents. The rate is currently 185 per 100,000 residents.
The move to “medium” did not prompt any immediate changes to public health mandates, such as indoor masking — which remains “strongly recommended” by the County.
But masking could again become mandatory indoors in a matter of weeks, Ferrer said.
The masking mandate would return if the County enters the “high” community level, which is expected by next week, and if the County’s virus-related hospitalization numbers reach two thresholds — if the rate of daily hospital admissions tops 10 per 100,000 residents and the percent of staffed hospital beds occupied by COVID patients tops 10%.
The County has already surpassed the first threshold, with the rate of daily hospital admissions already at 11.9 per 100,000 residents as of Thursday. But the level of hospital beds occupied by COVID patients was still 5.9% as of Thursday, below the 10% threshold.
Masks are still required indoors at health-care and congregate-care facilities, for anyone exposed to the virus in the past 10 days, and at businesses where they are required by the owner.
Ferrer again noted that the actual number of COVID infections in the community is likely much higher than the official numbers reflect — thanks to the prevalent use of at-home tests that aren’t reported to the County, and due to the number of people who are likely sick but don’t get tested at all.
Pasadena is experiencing high levels of COVID-19 circulating throughout the community, reflecting a broader surge in Los Angeles County, health officials said Friday.
With the city already in a high community transmission tier, under federal thresholds, officials said, the city’s public health and medical experts urged people to take resulting precautions as the holiday season arrives amid increasing instances of influenza, respiratory syncytial virus – otherwise known as RSV – and emerging COVID-19 variants.
Surrounding Los Angeles County could move into the Centers for Disease Control and Prevention’s high-transmission coronavirus category next week.
The good news, according to Shriner, is this year’s flu vaccine and the recently announced bivalent booster appear to be effective in preventing the flu and pushing back on coronavirus, despite uncertainty about emerging variants.
Coronavirus is still prevalent in the community, though, with officials reporting 70 new coronavirus cases on Thursday, Dec. 1, almost double what was tallied at the start of the week, according to the online dashboard.
The status of Friday’s case count was unknown as of this newspapers’s deadline, but the most recent count equates to 37,474 total cases of coronavirus since the start of the pandemic.
Pasadena has its own public health department, as does Long Beach. Both often operate in tandem with the county health department, but they also act independently.
Pasadena Public Health Division Manager Dr. Matthew Feaster noted the counts align with the regional increases of COVID-19 transmission, which is worrisome, since emergent variants and holiday-related social gatherings create “the perfect mix to bring large-scale COVID-19 surges,” he said.
To date, the city’s public health department hasn’t seen a circulating variant as influential as the original omicron, Feaster said.
The current surge is being blamed largely on a pair of new variants of the virus, known as BQ.1 and BQ.1.1. Both are offshoots of the BA.5 variant that was blamed for rises in infection numbers earlier this year.
Countywide, another 4,744 COVID-19 infections were reported Friday, continuing a surge in daily cases that could soon lead to a renewed requirement for people to wear masks at all indoor public spaces.
The new cases gave the county a cumulative total from throughout the pandemic of 3,552,019. Another 14 deaths were also reported Friday, raising the overall virus-related death toll to 34,213.
According to state figures, there were 1,171 COVID-positive patients in county hospitals as of Friday, up from 1,164 a day earlier. Of those patients, 131 were being treated in intensive care units, up from 121 on Thursday.
The seven-day average daily rate of people testing positive for the virus was 12.2% as of Friday.
The county has been logging steady increases in daily infections and hospitalizations since the beginning of November. As of Friday, the county’s average daily number of new infections over the past seven days was 3,053, up from 2,121 a week ago.
Ferrer said Thursday that the rising case and hospitalization numbers have moved Los Angeles County from the “low” COVID community activity level to the “medium” category, as defined by the U.S. Centers for Disease Control and Prevention. She said the county is on pace to reach the “high” level in a matter of days, when the rate of new cases reaches 200 per 100,000 residents. The rate is currently 185 per 100,000 residents.
The move to “medium” did not prompt any immediate changes to public health mandates, such as indoor masking — which remains “strongly recommended” by the county.
But masking could again become mandatory indoors in a matter of weeks, Ferrer said.
Shriner, Huntington’s lead infectious disease specialist, recalled the hospital looking like “a warzone” at this time last year, but she doesn’t believe care centers will be as impacted this holiday season thanks to the prevalence of vaccines and related coronavirus treatments.
Shriner acknowledged she worries a new variant will evade vaccines, “and put us right back to square one,” she said. Shriner was hopeful masks would still be among prevention strategies.
Acting Director of Public Health Manuel Carmona encouraged all of Pasadena to follow suit and assess their own personal risk factors before heading out to travel.
Other ways to limit the spread of respiratory viruses, according to Pasadena Health Officer Dr. Eric Handler, include staying home if you’re sick, testing for COVID-19 and contacting your doctor for treatment options.
Babies hit hard by virus variant-Omicron increases hospitalization rate for infants to that of seniors, CDC reports. By Rong-Gong Lin II and Luke Money for the LA Times.
Infants younger than 6 months had the same rate of hospitalization as seniors age 65 to 74 during this summer’s Omicron wave, according to a new report.
The findings, published by the U.S. Centers for Disease Control and Prevention, show that COVID-19 can still cause severe and fatal outcomes in children too young to be vaccinated.
During the first Omicron surge last fall and winter, the COVID-19 hospitalization rate spiked for both the youngest infants and younger seniors, eventually reaching about the same rate. During the variant’s summer surge, the hospitalization rate for both groups climbed again, also hitting about the same rate.
In earlier surges, the youngest infants had been hospitalized at rates well below those for seniors age 65 to 74.
The COVID-19 hospitalization rate for the youngest infants during the summer’s Omicron wave was significantly higher than the previous summer’s peak, which was dominated by the Delta variant.
The findings may come as a surprise, especially given the conventional wisdom that younger children and infants are far less likely to fall seriously ill with COVID-19 than older groups.
But the data illustrate how the groups hit hard by the virus can change with the rise and fall of new coronavirus variants. The CDC and American College of Obstetricians and Gynecologists recommend that pregnant and breastfeeding women be vaccinated “to facilitate the passive transfer of antibodies to these very young infants,” Dr. Krysia Lindan, a UC San Francisco professor of epidemiology and biostatistics, said at a recent campus town hall.
And the FLU and RSV: Flu cases across state are ‘off the charts’- CDC finds California is among worst in U.S.; influenza and COVID surge in L.A. County.
By Rong-Gong Lin II for the LA Times.
California is now reporting very high flu levels, according to the U.S. Centers for Disease Control and Prevention, as the respiratory illness continues to surge nationwide.
The CDC uses five overall levels, from minimal to very high, to measure influenza-like illnesses across the U.S. and its territories. On Friday, the agency’s color-coded map showed California and 10 other states, as well as New York City, shaded purple, the worst of the three shades in the very high flu level.
Since the start of October, CDC officials estimate, there have been 78,000 flu hospitalizations and 4,500 deaths nationally.
The California Department of Public Health classifies all of Southern California as having high flu levels, while Central and Northern California are rated moderate. Flu is the reason for nearly 4% of hospitalizations each week at Kaiser’s Northern California facilities, the highest in any of the prior four flu seasons.
In Los Angeles County, flu and COVID-19 cases are surging, and RSV — or respiratory syncytial virus — also remains at a high level.
“This triple threat … has a lot of potential to cause there to be significant circulating illness and to strain our healthcare system — both in terms of the number of beds that are available and the number of healthcare workers that are impacted by illness, which lowers the hospital’s capacity to take care of patients,” L.A. County Public Health Director Barbara Ferrer said in a recent briefing.
The flu positivity rate in L.A. County has reached 25%, a level not seen at this time of year in the last four years. “Clearly, we’re ... off the charts,” Ferrer said. California has recorded at least 36 flu-related deaths since the start of October, based on death certificate data. That figure is probably an undercount.
The positivity rate for RSV also remains elevated — around 15%, higher than in any of the four prior cold-and-flu seasons, which run October through September.
There are indications that RSV activity may have peaked in L.A. County in early November and is starting to decline. In late October, the positivity rate exceeded 20%, according to county data. But it’s possible the 15% rate is simply a result of more people being tested for the virus, Ferrer said.
At Children’s Hospital Los Angeles, the RSV positivity rate is 23%. That’s down considerably from Nov. 1, when it was 38%. But the latest figure is still quite high and is about the same as during the peak for all of last winter, 24%. The emergency room at Children’s Hospital is so busy that it cannot always accommodate patient transfers from other hospitals.
The positivity rate for flu at Children’s Hospital is 19%; before Thanksgiving, it was 12%.
Orange County’s RSV situation remains the same as it was the prior week, according to its Health Care Agency, where officials declared a public health emergency over RSV and other viral illnesses stressing children’s hospitals. Increasing coronavirus-positive hospitalizations are exacerbating the RSV situation, as a rise in COVID-19 hospital patients means there are fewer hospital beds available, the agency said.
At Kaiser’s Northern California hospitals, about 2.2% of hospital admissions are related to RSV, down from 2.3% last week, according to the most recent available data. Those rates are higher than in the five preceding cold-and-flu seasons.
There have been at least 14 RSV-related deaths, according to California death certificate data, since the start of October. The figure is probably an undercount.
In addition to wearing a mask, one of the easiest ways to reduce your risk of catching the flu or other viral illnesses is to avoid touching your face, health experts say.
The CDC notes that people can be infected with flu and RSV by touching contaminated surfaces, where some viruses can survive for days, and then their face.
The Economy: The US economy added more jobs than expected in November in a sign that demand for new workers remains strong despite the Federal Reserve’s historic efforts to cool the economy.
Jay Powell tried to dampen investor expectations the Federal Reserve will cut interest rates any time soon in a hawkish speech that signalled the US central bank has a long way to go in its fight against inflation.
Inflation in the eurozone has fallen for the first time in 17 months, raising hopes that the biggest price surge for a generation has peaked and the European Central Bank will be able to shift to smaller interest rate rises next month.
President Biden signed a bill Friday to avert a freight rail strike that he said could have plunged the U.S. into a catastrophic recession.
At the White House, Biden signed a measure passed Thursday by the Senate and Wednesday by the House.
It binds rail companies and workers to a proposed settlement that was reached between the railroads and union leaders in September but rejected by some of the union workers.
The president, for decades a vocal labor ally, called it the “right thing to do” given the risks to an economy that is battling high inflation.
Members of four of the 12 unions involved had rejected the proposed terms as lacking sufficient paid sick leave. Biden acknowledged the shortcoming as he said he would continue to push for that benefit for every U.S. worker.
Rejection of the settlement had created the risk of a strike beginning Dec. 9, jeopardizing key shipments during the holiday season.
A freight rail strike also would have had a big potential effect on passenger rail because Amtrak and many commuter railroads rely on tracks owned by the freight railroads.
The president said that a strike would have sunk the U.S. economy, causing about 765,000 job losses by rupturing supply chains. Basic goods, food and the chemicals needed to ensure clean drinking water and make gasoline could have gone undelivered.
Rising prices already have many Americans afraid of a coming downturn, but the U.S. job market has been steady.
Friday’s jobs report showed that wages for workers rose 5.1% last month from a year earlier. That’s an acceleration from October’s 4.9% gain and easily topped economists’ expectations for a slowdown.
Jumps in pay are helpful to workers who are struggling to keep up with higher prices for daily necessities. But the Federal Reserve worries that too-strong gains could cause inflation to become further entrenched in the economy. That’s because wages make up a big part of costs for companies in service industries, and they could end up raising their own prices further to cover higher wages for their employees.
Across the economy, employers added 263,000 jobs last month. That was stronger hiring than economists’ forecasts for 200,000, while the unemployment rate held steady at 3.7%. Many Americans also continue to stay entirely out of the job market, which could increase the pressure on employers to raise wages.
A labor market that remains much stronger than expected could make an already dicey situation for the Fed even more complicated. It’s trying to slow the economy just enough to prevent the buying activity that gives inflation its oxygen, without going so far as to create a recession. The Fed has signaled it will probably push the unemployment rate to at least 4.4% in its fight against inflation.
But expectations are rising for what the Fed will do in 2023. Treasury yields jumped immediately after the release of the jobs report. That indicates strengthened expectations for the Fed to stay resolute in hiking interest rates.
The strong employment data follow up on several mixed reports on the economy. The nation’s manufacturing activity shrank last month for the first time in 30 months, for example, while the housing industry is struggling under the weight of much higher mortgage rates. Such data points had raised hopes the Fed’s rate hikes were taking effect and would ultimately pull down inflation.
Even though Friday’s report showed hiring was stronger than expected, it also clearly demonstrated that the nation’s downward trend in hiring is continuing. November’s job gains matched the low seen in April 2021.
More economists are forecasting the U.S. economy will fall into a recession next year in large part because of higher interest rates.
COVID-19 Update for November 28, 2022-Cases, the Econony and More
|Cases: Pasadena Public Health Department case counts show the seven-day average of new COVID-19 cases in Pasadena has risen from 18.4 cases on Nov. 1 to 30.1 cases on Nov. 23, an increase of 63.5%.|
As of Friday, 5 patients were in Huntington Health’s ICU, of whom 60% were vaccinated. The hospital reported 23 COVID-positive patients in all, of whom 61% were vaccinated.
LA County health officials have said previously that roughly 40% of virus patients were actually admitted to hospitals for COVID-related issues, while the rest were admitted for other reasons but tested positive at the hospital.
Overall official case numbers are believed by County officials to be artificially low, due to residents who use at-home tests and do not report the results to the county. County Health Officer Dr. Muntu Davis noted last week that many other people who may be infected don’t get tested at all.
The county has been seeing steadily rising case and hospitalization numbers since the beginning of November, prompting health officials last week to again “strongly recommend” that people wear masks at indoor public settings.
Masks are still required indoors at health-care and congregate-care facilities, for anyone exposed to the virus in the past 10 days, and at locations where they are required by the operator.
“We are grateful for the support and kindness residents have shown each other as together we respond to the continued challenges of COVID-19,” County Public Health Director Barbara Ferrer said in a statement Wednesday. “As we look forward to other upcoming winter holidays, getting vaccinated with the new updated fall COVID-19 booster offers you and your family additional protection as you make plans to travel, shop and gather with those you love.
She again noted the persistent spread of flu and respiratory syncytial virus, or RSV, in the county, which are combining with COVID-19 to present a triple threat of respiratory illnesses. She urged residents to receive a flu shot in addition to the COVID booster vaccine.
A fully vaccinated person can still contract and transmit COVID, but health officials say the vaccines offer protection against developing severe symptoms that can result in hospitalization and even death.
Signs of hope against a third wave-After two devastating pandemic seasons, experts say this winter might be different. By Rong-Gong Lin II and Luke Money for theLA Times.
For the last two years, Thanksgiving served as a sobering reminder of the COVID-19 pandemic’s staying power.
For each, the holiday essentially marked the turbocharged start of the severe fall-and-winter COVID-19 wave, which both resulted in the deadliest surges of the pandemic, killing thousands of Americans a day.
But there’s some guarded optimism that this winter might be different — or at least not as bad as the 2020 and 2021 surges.
Some of the advantages we have this year include an updated COVID-19 booster shot that’s pretty well matched to the circulating strains of the coronavirus, ample supplies of at-home rapid tests, and general awareness of steps we can take to avoid illness, such as masking up in indoor public settings, staying home when sick, and improving air flow by taking events outdoors, opening windows and turning up air filtration units.
There’s even some promising news about the unrelenting emergence of coronavirus subvariants, none of which have dramatically raised alarm bells the same way the original Omicron strain did when it stormed onto the world stage last Thanksgiving.
One note of optimism comes from Singapore, which recently experienced a big wave in coronavirus cases fueled by the Omicron subvariant XBB, a recombinant of the sublineages BA.2.10.1 and BA.2.75. XBB has generated concern that vaccines may not be as effective against it.
Two other Omicron subvariants, BQ.1 and BQ.1.1, accounted for about 57% of estimated coronavirus cases for the most recent week available, according to data from the U.S. Centers for Disease Control and Prevention. Both are descendants of BA.5 — a long-dominant strain that fueled a surge this summer.
But some experts who had previously warned about the rise of new Omicron subvariants say the latest data appear reassuring for now. New York state, for instance, has the highest proportion of BQ.1.1 in the nation — yet there is no sign of hospital admissions likewise increasing.
In California, however, coronavirus-positive hospitalizations have been increasing. As of Wednesday, there were 2,782 coronavirus-positive patients in hospitals, up 84% from the autumn low of 1,514 on Oct. 24. This summer’s peak was 4,843, set on July 26, and last winter’s peak was 15,435, set on Jan. 21. The all-time high, 21,938, was set during the first pandemic winter on Jan. 6, 2021, and the all-time summer high was 8,353, set on Aug. 31, 2021.
Nationally, hundreds of Americans are still dying every day of COVID-19, which remains a leading cause of death . And there are signs that transmission is once again on the upswing.
Los Angeles County is averaging 2,337 coronavirus cases a day for the week that ended Friday, up 32% from the previous week. On a per capita basis, L.A. County is seeing 142 cases a week for every 100,000 residents. A rate of 100 or greater is considered high.
L.A. County’s coronavirus case rate has been climbing since mid-October, when it hit an autumn low of 60 cases a week for every 100,000 residents. The latest case rate is the highest it has been since Labor Day.
California is recording 95 coronavirus cases a week for every 100,000 residents for the seven-day period that ended Tuesday. The state’s rate climbed 16% over the previous week.
Estimates suggest the share of admitted coronavirus-positive patients statewide who are in the hospital due to COVID-19 illness has remained relatively stable, at around 45%, since April. The other patients are being treated for issues not related to COVID-19. BQ.1.1 has been concerning because of assessments that it was “one of the most immune-evasive SARS-CoV-2 variants yet seen,” Topol wrote in a blog post , including “resistance to all available monoclonal antibodies,” referring to medicine that can help treat coronavirus-infected patients or prevent infection.
It could be that cumulative immunity is now having an effect against the latest strains.
The optimism doesn’t mean that “we’re out of the woods,” Topol said. And it’s not to say that the rise of BQ.1.1 is without consequence. Already, the variant has rendered monoclonal antibodies intended to be used as medicine to treat or prevent COVID-19 effectively useless. UC San Francisco said it is discontinuing administration of bebtelovimab and Evusheld due to “a rapid increase in circulation of Omicron subvariants predicted to have resistance” against the drugs. Paxlovid, an antiviral oral medication, continues to be an effective treatment against COVID-19.
The rate at which the coronavirus is mutating has risen by 30% in the last year, Topol added, so there’s still room for Omicron “to pose a significant threat.” And there’s still the possibility that problematic variants could emerge in the future.
Much of the optimism surrounding this fall and winter stems from the availability of updated COVID-19 booster shots. Data released this week show that the updated COVID-19 vaccines offer “significant additional protection” against symptomatic infection in people who were previously vaccinated or boosted with the older formulation.
However, uptake of those doses has been slow out of the gate.
Statewide, about 16% of eligible residents have gotten the updated booster.
The coronavirus is also not the only game in town heading into this winter. Flu is surging at a level not seen in years, and RSV is continuing to stress children’s hospitals across California. Regarding the flu, though, this season’s vaccine appears also well matched to the circulating strains.
Nationally, hospitalization rates related to RSV — or respiratory syncytial virus — are exceptionally high, said Dr. Theodore Ruel, chief of UC San Francisco’s pediatric infectious diseases and global health division.
RSV also continues to stretch the available emergency room capacity at Children’s Hospital Los Angeles, meaning the facility cannot always accommodate patient transfers from elsewhere. The primary pediatric hospital in Orange County is observing a high number of emergency room visits daily, according to the county’s Health Care Agency.
Riverside County reported the death of a child younger than 4, possibly from RSV, in the eastern part of the county, officials said Monday. The child died after a short illness at a hospital.
Officials say that babies at high risk for severe RSV — like premature infants and young children with heart and lung conditions — can take a medicine known as palivizumab to help protect them. “If you are concerned about your child’s risk for severe RSV infection, talk to your child’s healthcare provider,” the Riverside County public health agency said.
The Economy: Most Federal Reserve officials back slower rate rises ‘soon’-A “substantial majority” of Federal Reserve officials support slowing down the pace of US interest rate rises soon, even as some warned that monetary policy would need to be tightened more than expected next year, according to an account of their most recent meeting.
THE U.S. economy faces the bleakest holiday outlook in recent memory-By Olivia Rockeman for Bloomberg- The recent wave of relief across the retail industry is giving way to a sense of foreboding ahead of Black Friday and the holiday shopping season.
Shoppers helped companies such as Macy’s Inc. avoid the worst-case scenario in the third quarter, loading up credit cards to absorb higher prices for food and household items while taking advantage of steep discounts for overstocked TVs and furniture. And although results from retailers including Abercrombie & Fitch Co. and Best Buy Co. exceeded forecasts, sales were still down — the contraction just wasn’t as bad as expected.
That’s in large part because retailers offered promotions earlier than normal this year to clear out excess inventory.
But executives voiced caution and repeatedly referred to economic uncertainty. And the cost of unloading piled-up inventory, while still dealing with inflation and staffing challenges, is expected to put pressure on profits.
For shoppers, that could translate into big markdowns. But those bargains may be on spring’s leftover sweatpants as merchants continue to struggle with too much stock of everything purchased early in the year, including apparel and toys.
Add it all up and the U.S. economy is looking at the bleakest holiday outlook in recent memory, with sales that will struggle to top the record-setting levels of the last few years. Apparel companies across the board are conservative about expectations for the fourth quarter, citing an uncertain environment and declining sales activity in late October and early November.
Overall spending this holiday season is seen growing 2.5% from a year ago, compared with 8.6% last year and 32% in 2020, according to data from Adobe Inc. Those figures aren’t adjusted for inflation, meaning that sales could be down by volume.
The challenges are especially acute for brands that cater to lower- and middle-income consumers, who have become more cautious when it comes to spending on discretionary items. At Abercrombie & Fitch, for example, the higher-priced namesake brand reported growth in third-quarter net sales while the lower-cost Hollister brand posted a decline.
On the flip side, higher-income shoppers are still spending. That trend was illustrated in results at Macy’s-owned Bloomingdale’s and Gap Inc.-owned Banana Republic that were better than those at the parent companies’ lower-cost brands
Consumers still plan on spending: More than three-quarters of customers expect to spend as much as or more than in 2021 on the holidays, and 85% said they will do at least some of their holiday shopping on Black Friday, according to survey data from Placer.ai, a location analytics firm that tracks foot traffic.
But some consumers are relying more on credit and buy-now, pay-later options than they did a year ago. Macy’s said last week that customers are building larger balances on credit cards.
A U.S. recession — which a growing number of economists have warned may be imminent as the Federal Reserve keeps raising interest rates in an effort to curb inflation — may have a wider effect on spending across the income spectrum.
COVID-19 Update for November 21, 2022:
Cases: Pasadena Reported 36 new cases and no fatalities from COVD-19 on Thursday.
2,200 new COVID cases logged in LA County, with 8 more deaths. According to state figures, there were 666 COVID-positive patients in county hospitals as of Friday, up from 648 on Thursday. Of those patients, 74 were being treated in intensive care, down from 77 the previous day.
Los Angeles County continued reporting inflated numbers of COVID-19 cases on Friday, Nov. 18, with more than 2,200 new cases logged, along with eight more virus-related deaths.
The 2,249 new cases reported Friday gave the county a cumulative total from throughout the pandemic of 3,515,225. The eight new deaths lifted the county’s virus-related death toll to 34,098.
According to state figures, there were 666 COVID-positive patients in county hospitals as of Friday, up from 648 on Thursday. Of those patients, 74 were being treated in intensive care, down from 77 the previous day.
Health officials have said previously that roughly 40% of the patients were actually admitted for COVID-related issues, while the rest were admitted for other reasons but tested positive at the hospital.
The seven-day average daily rate of people testing positive for the virus in the county was 6.8% as of Friday.
The county has been seeing steadily rising case and hospitalization numbers since the beginning of November, prompting health officials on Thursday to announce that they are again “strongly recommending” that people wear masks at indoor public settings.
The recommendation falls short of a masking mandate, but masks are still required indoors at health-care and congregate-care facilities, for anyone exposed to the virus in the past 10 days, and at locations where they are required by the operator, county Health Officer Dr. Muntu Davis said Thursday.
For the past few months, indoor masking has been a matter of personal preference, unless individual businesses or locations chose to require them. The county shifted back to “strongly recommending” indoor mask wearing on Thursday when the local seven-day average of daily new COVID-19 infections rose to 100 per 100,000 residents, up from 86 per 100,000 a week ago. The rate the previous week was 65 per 100,000 residents.
The increasing case rate mirrored steady rises seen in daily reported case numbers and hospitalizations since the beginning of November.
Davis said the county is currently reporting about 1,500 new cases per day, up from 1,300 per day a week ago and up 52% since Nov. 1. He noted that the reported cases only represent a portion of actual infections occurring in the county, since many residents rely on at-home tests that are not reported to health officials, while many more don’t get tested at all.
Average daily COVID-related hospital admissions are averaging 97 per day, up 26% from 77 per day last week, and a 54% jump since Nov. 1, Davis said.
Daily reported virus-related deaths remain relatively low, at about eight per day, but Davis said with the increases in case rates and hospitalizations, that number could begin to climb.
Health officials have been warning of a third straight winter surge of COVID-19 cases, noting the increased risk of transmission as people spend more time indoors due to colder weather and the winter holidays. Davis on Thursday also noted the continued threat of new variants emerging that can spread more rapidly from person to person, even those who are vaccinated.
Vaccines: from Los Angeles County Department of Public Health: Information on COVID-19 Booster Facts. Spanish translation is pending. You will find details on Boosting your protection against severe COVID-19, Getting a Booster dose if it has been at Least 2 months since your last dose, and Getting the Booster even if you have already been infected with COVID-19.
Please see our Vaccine FAQ Resources webpage for more information.
Other pertinent information and resources can be found on the Los Angeles County Department of Public Health website at http://publichealth.lacounty.gov/media/Coronavirus/
Thank you for your ongoing efforts to protect the health and well-being of Los Angeles County residents.
From the New York Times: Operation Warp Speed, the Trump-era program that poured billions of dollars into developing Covid shots, seemed to signal a new dawn of American vaccine making, demonstrating how decades of scientific grunt work could be turned into lifesaving medicine in a matter of months.
But as a third pandemic winter begins in the United States, its vaccine-making effort has lost steam. Efforts to test and produce next-generation Covid vaccines are bogged down by bureaucratic problems and funding shortfalls. Foreign rivals have raced ahead in approving long-awaited nasal-spray vaccines, including one invented in St. Louis, creating a scenario in which Americans would have to travel abroad for the latest in American vaccine technology.
The Biden administration has launched a last-ditch effort to restore the country’s edge. In a bid to resurrect Operation Warp Speed, President Biden asked the lame-duck session of Congress this week for $5 billion for next-generation vaccines and therapeutics, as part of a broader $9.25 billion pandemic spending request. But Republicans, having blocked requests for next-generation vaccine funding since the spring amid complaints about how the White House spent earlier pandemic aid allocations, have shown no signs of dropping their resistance.
As a result, even with the pandemic still taking a heavy toll, prospects have dimmed for the two most coveted kinds of next-generation vaccines: nasal sprays that can block more infections, and universal coronavirus shots that can defend against a wider array of ever-evolving variants.
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The Economy: Economic warning signs are mounting in California — foreshadowing potentially tough budget decisions for the state officials and policymakers who emerge victorious from the Nov. 8 election.
One particularly eye-popping statistic: Just nine companies headquartered in the Golden State went public in the first three quarters of 2022, compared to 81 during the same period last year, according to a Bloomberg News analysis.
Bloomberg also found that: As of Sept. 30, initial public offerings in California had raised just $177 million, compared to an average of $16 billion during the same period over the past five years. The $177 million figure represents just 2% of funds generated by U.S. companies that went public through the end of September. Last year at this time, California accounted for 39% of funds nationally.
If this trend continues, it could spell an end to the streak California has maintained since 2003 of generating more IPOs than any other state.
“We are already seeing an immediate effect,” Brian Uhler, deputy legislative analyst for the state Legislative Analyst’s Office, told Bloomberg. “And it does appear to be significant,” contributing to a 5% decline in California employers’ income tax withholding payments in September compared to last year.
Indeed, California collected about $2.8 billion less in taxes in September than it thought it would, marking the third straight month of revenues coming in below projections, according to a report released this week by Gov. Gavin Newsom’s Department of Finance.
From Jonathan Lansner for the Pasadena Seat-News: Southern California’s 8 million jobs sets new record-The joblessness rate was 4% in October, the same as in September.
The Southern California job market hit record employment in October, defying the efforts of the Federal Reserve to cool an overheated economy with steep interest rate hikes.
State job figures released Friday, found bosses in Los Angeles, Orange, Riverside and San Bernardino counties added 109,200 workers in October — the best month for hiring since February 2021. That put a total of 8 million at work in the region, up 360,300 in 12 months and topping the 7.953 million high of November 2019.
October also marks the first time Southern California jobs exceeded February 2020’s level, the last month before COVID-19 upended the economy. The statewide job market also became “fully recovered” in October, erasing what had been a loss of 2.6 million jobs when the pandemic locked down the economy.
October’s local hiring pace was faster than the average 30,025 workers added monthly in the past year. Record employment was set in October for the local transportation/warehouses, business services and healthcare/personal services industries.
Here’s how the job market performed in the region’s key metropolitan areas:
- Los Angeles County: 4.61 million workers, 99.8% of February 2020 after adding 58,800 in a month and growing by 196,600 in a year. Unemployment? 4.5% – same as a month earlier; 6.2% a year ago; 4.3% in February 2020.
- Orange County: 1.69 million workers, 100.5% of February 2020 after adding 22,800 in a month and growing by 77,600 in a year. Unemployment? 2.8% vs. 2.7% a month earlier; 4.1% a year ago; 2.8% in February 2020.
- Inland Empire: record 1.69 million workers, 107% of February 2020 after adding 27,600 in a month and growing by 86,100 in a year. Unemployment? 3.9% – same as a month earlier; 5.4% a year ago; 3.9% in February 2020.
Uneven rebound: The pandemic era’s rebound in hiring has not been an even reversal, with large differences in employment recovery in key job niches. Look at four-county worker counts by key industries, ranked by size of pandemic-era recovery:
- Transportation/warehouses: 123% of pre-coronavirus jobs at a record 468,900 workers. That’s up 88,300 from February 2020 after adding 10,500 last month.
- Business services: 105% of pre-coronavirus jobs at a record 1,202,900 workers. That’s up 59,500 from February 2020 after adding 19,300 last month.
- Healthcare, personal services: 105% of pre-coronavirus jobs at a record 1,225,600 workers. That’s up 58,200 from February 2020 after adding 15,700 last month.
- Retailing: 102% of pre-virus employment at 750,800 workers. That’s up 12,600 from February 2020 after adding 12,200 last month.
- Construction, real estate, finance: 101% of pre-pandemic staffing at 680,100 workers. That’s up 5,900 from February 2020 after adding 9,700 last month.
- Restaurants: 99% of pre-pandemic jobs at 676,700 workers. That’s down 4,000 from February 2020 after adding 1,300 last month.
- Manufacturing: 97% of pre-virus employment at 576,500 workers. That’s down 19,900 from February 2020 after adding 1,700 last month.
- Government: 95% of pre-pandemic staffing at 984,800 workers. That’s down 47,000 from February 2020 after adding 18,200 last month.
- Arts, entertainment and recreation: 94% of pre-pandemic staffing at 165,000 workers. That’s down 9,900 from February 2020 after adding 4,700 last month.
- Hotels: 82% of pre-virus employment at 79,000 workers. That’s down 17,900 from February 2020 after adding 1,100 last month.
California’s pandemic job losses fully recovered, but economic woes percolate-California has now had positive job growth for 13 consecutive months.
California said Friday it had recovered all of the 2.7 million jobs it lost at the start of the pandemic, a moment that normally would celebrate the end of a downturn but instead was tempered by signs of a wobbly economy amid layoffs in the state’s historically strong tech industry.
The 56,700 new jobs California employers added in October was enough to push the state past the symbolic milestone, led by strong gains in the state’s health care, professional services and leisure and hospitality industries. California has now had positive job growth for 13 consecutive months.
From the New York Times: With the pandemic receding, children back in school and businesses telling employees to return to the office, the companies that own big office buildings were hoping to move on this fall from a nightmarish two years.
Instead, things got worse.
More office workers are back at their desks than a year ago, but attendance at office buildings in New York, Boston, Atlanta, San Francisco and other cities is languishing well below prepandemic levels. As leases come up for renewal, companies are often opting for smaller offices, saddling landlords with millions of square feet in vacant space. And more space is expected to hit the market in the coming months as companies like Meta, Salesforce and Lyft lay off workers. More than 100,000 technology workers have lost their jobs this year, according to Layoffs.fyi, a site that tracks job cuts.
Higher interest rates are also weighing on the industry. Many landlords are no longer willing or able to acquire and spruce up older buildings or build new ones. Seeing little upside in holding on to sparsely occupied buildings and paying interest on mortgages, some landlords are handing over properties to lenders. Others are seeking to convert office buildings into residential complexes, though that can be expensive and take years.
Wall Street investors appear to think the office space sector is in for a deep slump. The shares of large landlords and developers are trading close to or below their pandemic lows, underperforming the broader stock market by a huge margin. Some bonds backed by office loans are showing signs of stress.
The value of U.S. office buildings could plunge 39 percent, or $454 billion, in the coming years, according to a recent study by business professors at Columbia and New York University.
Office vacancy rates across the country stand at a record 19.1 percent, with Chicago, Houston and San Francisco running above 20 percent, according to Jones Lang LaSalle, a commercial real estate services company. That includes the record 185 million square feet, or 3.85 percent of total office space in the country, that is available for sublet. Another 104 million square feet will come onto the market through 2024 as new office buildings are completed, according to Jones Lang LaSalle.
Office landlords made it through the pandemic in reasonable health because corporate tenants with long leases kept paying rent even if their employees weren’t coming into the office.
But the landlords, who typically flash sunny optimism even in dark days, are now sounding more cautious. They acknowledge that many corporate tenants are sticking with some form of work-from-home policy, and their bullishness is mostly focused on new buildings.
California mortgage-making takes record 63% dive-Soaring interest rates made most loans unaffordable. That’s the second-slowest slowest three months of the century. It’s also a stunning 63% nosedive from the year-ago period, making this the biggest 12-month drop on record.
The average long-term U.S. mortgage rate tumbled by nearly a half-point this week, but will likely remain a significant barrier for potential homebuyers as Federal Reserve officials have all but promised more rate hikes in the coming months.
Mortgage buyer Freddie Mac reported Thursday that the average on the key 30-year rate fell to 6.61% from 7.08% last week, the largest weekly drop since 1981. A year ago the average rate was 3.1%.
The rate for a 15-year mortgage, popular with those refinancing their homes, fell to 5.98% from 6.38% last week. It was 2.39% one year ago.
The UK’s rate of inflation hit a fresh 41-year high in October, accelerating to 11.1 per cent on the back of rising energy and food prices. Economists had expected a rate of 10.7 per cent.
COVID 19 (and more) Update for November 7, 2022-Cases, RSV, the Economy and MoreCases: After months of decline, Los Angeles County health officials have reported a sharp increase in the average daily number of new COVID-19 infections, again raising concerns about an impending winter spike in cases.
But in Pasadena, no such increase has materialized. In fact, the Pasadena Public Health Dept. reported Nov. 3’s 10-day average of new cases was 19.1 cases — compared with Oct. 3’s 10-day average of 19 new cases and Sept. 3’s 10-day average of 24 new cases.
Huntington Health reported an increase in COVID-related hospitalizations, but the 7-day moving average of new hospitalizations was just 3 patients as of Nov. 3.
Outside Pasadena, the county said the seven-day average daily number of infections rose by 10% over the past week, according to the county Department of Public Health, jumping from 988 new cases per day to 1,083.
The number of coronavirus patients in county hospitals has been rising too in recent days, increasing by another 34 people as of Saturday to 453, according to the latest state figures. Of those patients, 44 were being treated in intensive care, down from 50 the previous day.
She also urged residents to receive a flu shot and practice infection-control measures such as hand-washing, mask-wearing and staying home if sick.
According to the county, while 85% of residents aged 5 and older have received their initial COVID vaccinations, only 11% of those eligible have taken advantage of the new bivalent booster, which is designed to combat the currently circulating Omicron variants of the virus.
The county on Friday reported 1,447 new COVID infections and seven new virus-related fatalities. The new cases gave the county an overall total from throughout the pandemic of 3,493,150, while the cumulative death toll rose to 33,999.
Health officials have said the majority of people who die from COVID- 19 are either elderly, have underlying health conditions, or both.
The average daily rate of people testing positive for the virus also ticked up slightly, reaching 5% as of Friday.
On Thursday, November 3rd, the City of Pasadena reported 26 new COVID cases and no new fatalities. Since the pandemic began the city has confirmed 35,632 cases and 434 fatalities. Pasadena has a nearly 100% vaccination rate of persons with at least one dose. More than 93% of Pasadena's eligible residents are fully vaccinated.
LA County reported 1,332 new cases of COVID on Thursday and seven fatalities. So far, LA County has recorded 33,992 deaths and 3,491,716 COVID infections. 80% of LA County eligible residents have received at least one dose of vaccine.
California has 10,519,175 confirmed cases of COVID-19, resulting in 96,185 deaths since the pandemic began. California reported 16,778 new cases on November 3rd and 88 fatalities resulting from COVID infections. 82% of Californians have received at least one dose of vaccine.
COVID: Health officials eye rise of subvariants- By Luke Money and Rong-Gong Lin II for the LA Times. The rise of new coronavirus subvariants is continuing to erode the grip the Omicron strain BA.5 has held for months, worrying health officials that a winter resurgence of COVID-19 may be ahead.
Eating into BA.5’s long-running dominance are a pair of its own descendants: BQ.1 and BQ.1.1. Like BA.5, the two are subvariants of the original Omicron coronavirus strain that walloped the world last fall and winter.
According to data from the U.S. Centers for Disease Control and Prevention, BA.5 has long accounted for the vast majority of new coronavirus cases nationwide. That these two other strains are increasing in their respective share of cases, however, could indicate they enjoy an additional growth advantage.
But what that ultimately means for this fall and winter — a period when many health experts have already predicted some degree of COVID-19 resurgence — remains to be seen.
At this point, BA.5 remains the most common version of the coronavirus in circulation in the U.S. — making up an estimated 49.6% of new cases over the weeklong period ending Saturday, CDC data show. As recently as a month ago, federal health officials estimated it was the culprit behind nearly 82% of new cases.
During that same time, BQ.1 has increased its estimated share from 1.2% to 14%, CDC data show. BQ.1.1 has swelled from an estimated 0.5% to 13.1%.
There are no epidemiological data currently suggesting that BQ.1 or its descendants are associated with increased disease severity or that they will significantly diminish vaccine protection against serious illness, according to the statement.
Even if BQ.1 or BQ.1.1 don’t make people sicker, that’s not to say their rise is riskless. As has been seen throughout the pandemic, higher numbers of infections threaten to put additional stress on the healthcare system.
Coronavirus-positive patients, whether admitted for COVID-19 illness or with an incidental infection , require particular attention and resources to keep them from spreading the virus to others. Greater community transmission also can sicken healthcare workers, causing staffing interruptions and even shortages.
The circulation of other respiratory illnesses — namely influenza and respiratory syncytial (sin-SISH-uhl) virus, or RSV — also could compound any challenges presented by a coronavirus rebound. Both RSV and the flu are much more active now than typical for this time of year, a development some worry could foreshadow particularly severe seasons.
Because vaccine protection wanes over time, many could be at higher risk, depending on how long it’s been since they were last inoculated.
As of mid-October, the California Department of Public Health said about 21.9 million people — roughly 78% of all vaccinated recipients — were at least six months removed from their last dose.
Uptake of the updated bivalent boosters, designed to protect not only against the original coronavirus strain but also the Omicron subvariants BA.5 and BA.4, also has been slow.
About 11.4% of eligible Californians have gotten the additional dose, state data show. Nationwide, bivalent coverage among eligible recipients is 7.3%, according to the CDC .
In L.A. County, coronavirus cases are no longer declining at the rate seen over the summer and appear to have plateaued. For the seven-day period that ended Monday, L.A. County was averaging 979 cases a day, a 7% increase from the prior week. On a per capita basis, L.A. County was recording about 68 cases a week for every 100,000 residents.
Statewide, cases also may be starting to increase. The daily average number of cases in California rose by 18% for the most recent week of data available, from 2,681 to 3,152. On a per capita basis, the state was recording 56 cases a week for every 100,000 residents.
Viral levels in wastewater — a key metric as many coronavirus cases are being self-diagnosed using at-home tests and aren’t officially reported to public health departments — also are increasing in L.A. County. The level is now 31% of the summer peak recorded in July, up from 21% a week earlier.
L.A. County’s death rate has remained largely stable for the last month, averaging 65 to 84 COVID-19 deaths per week. That’s an improvement from the summer Omicron peak of 122 deaths a week but still well above the springtime lull in May, when weekly deaths fell to a low of 24 COVID-19 deaths a week.
The U.S. averaged roughly 400 COVID-19 deaths a day in October, higher than the springtime lull of about 300 daily deaths.
Thus far, however, they remain at low levels in L.A. County. For the week that ended Oct. 8, both accounted for only 2.7% of weekly specimens in L.A. County.
Vaccines: A new study by Pfizer and BioNTech suggests that their updated coronavirus booster is better than its predecessor at increasing the antibody levels of people over age 55 against the most common version of the virus now circulating.
Federal officials are hoping that the encouraging results will improve what has so far been a dismal public response to the retooled shots. Only about 8 percent of Americans ages 5 and up have received the new boosters from Pfizer and Moderna since they were introduced in September.
Pfizer and BioNTech announced the study results in a news release on Friday. The companies said that one month after getting the new booster, clinical trial participants over 55 had antibody levels that were about four times as high as those who received the original booster. The study measured the levels of neutralizing antibodies against two sister subvariants of Omicron known as BA.4 and BA.5.
R.S.V.: You may have seen respiratory syncytial virus, or R.S.V., in the news recently, as rates of the virus have ticked up across the United States. R.S.V. usually circulates from late December to mid-February. But this year, an early spike in cases is resulting in markedly higher numbers of infections and hospitalizations.
As rising R.S.V. rates coincide with the expected wintertime surge in Covid-19 as well as an early flu season, experts are worried about a “tripledemic” and the strain it could place on hospitals and emergency departments that are already stretched thin.
Here’s what to know about R.S.V., who is most at risk and what you can do to avoid getting sick.
But many experts believe masking, social distancing, school closures and other precautions taken during the first year or two of the pandemic protected most children from exposure to the virus and other germs. “As a result, there are still many children who are less than 3 years old who’ve never been exposed to R.S.V.,” said Dr. James Antoon, an assistant professor of pediatrics and pediatric hospitalist at Monroe Carell Jr. Children’s Hospital at Vanderbilt University in Nashville, Tenn. “The virus is now playing catch-up in all these kids.”
Can adults get R.S.V.? They can. “Adults still get R.S.V. fairly regularly and they can get reinfected multiple times throughout adulthood,” Dr. Martin said. Because adults already have a lot of antibodies against the virus from previous exposures, their illness tends to be much milder. In fact, it can be almost indistinguishable from the common cold or even a mild case of the flu or Covid-19, she said.
Most adults with R.S.V. are able to shake off an infection in a week or two, but seniors and those who have weakened immune systems, as well as those with chronic lung or heart disease, can develop more severe cases. According to the Centers for Disease Control and Prevention, an estimated 177,000 older adults are hospitalized with R.S.V. each year and 14,000 of them die.
What are the symptoms of an R.S.V. infection? In adults and children, R.S.V. typically causes mild symptoms like a cough, runny nose and fever. These appear gradually, four to six days after getting exposed. In young babies, the only signs of an infection may be general lethargy, irritability and a decreased appetite, said Dr. Priya Soni, a pediatric infectious disease specialist at Cedars-Sinai Guerin Children’s in Los Angeles. Parents should also be on the lookout for signs that their child is having difficulty breathing, Dr. Soni said. For example, if an infant or toddler is breathing faster than usual, if you notice more of their ribs or belly moving as they breathe or if their nostrils are flaring, those are all signs that you should take them to see a doctor.
Young children tend to struggle more, not just because their immune systems are still learning to recognize and fight off viruses, but also because their airways are so small, Dr. Soni said. An R.S.V. infection can dramatically increase mucus secretions in the airways, which older children and adults are able to cough or sneeze out. But infants and toddlers do not yet have strong enough muscles to cough up all the extra fluid, so parents or health care providers need to do the job for them by suctioning their airways.
If mucus collects in the small airways in the lungs, it can cause blockages and inflammation known as bronchiolitis, which is one of the most common complications that results in hospitalization. Another outcome of severe R.S.V. in young children is pneumonia. Several studies have also linked severe R.S.V. to an increased risk of recurrent wheezing and asthma later in life. “R.S.V. can be extremely disruptive to young lungs,” Dr. Martin said.
Those at highest risk for severe infections include premature infants, babies under 6 months of age, and infants and toddlers with chronic lung disease or congenital heart disease, as well as children with weakened immune systems and those who have neuromuscular disorders that make it difficult to clear out mucus.
Is there a test for R.S.V.? There are rapid antigen tests and P.C.R. tests to check for R.S.V., but they are typically reserved for young children or older adults, because there is no treatment for an infection if you do not need hospitalization, Dr. Soni said. If a patient is showing signs of a severe infection, a health care provider may also check their breathing with a stethoscope and order a white blood cell count or other tests, such as a chest X-ray or CT scan.
What can you do to avoid R.S.V.? Unlike Covid, R.S.V. can spread when people touch contaminated surfaces. It also spreads through respiratory droplets, Dr. Martin said. So it’s a good idea to disinfect surfaces, particularly in settings like day care centers, where young children are constantly touching things, sneezing on things and sticking them in their mouths.
Premature infants and children with certain medical conditions can also take a monthly monoclonal antibody medication called palivizumab during R.S.V. season to help keep them out of the hospital.
Although several vaccines in clinical trials have started to show promise for R.S.V., none are available yet. That’s why experts recommend more general measures to prevent infection, such as frequent hand-washing — and for those who are sick, staying home.
The Economy: Rent delinquency rates among US small businesses increased significantly this month, a new report shows.
Chuck Casto, head of research, at Alignable, said that small business owners are resilient but incomes are “basically being eaten away by inflationary pressures.”
The survey of 4,789 small business owners was conducted between Oct. 15 and Oct. 27. The findings partly reflect how inflation is affecting small businesses. More than half say their rent is at least 10% higher than it was six months ago, and in seven say rents have increased at least 20%.
The Federal Reserve on Wednesday raised its benchmark policy rate by 0.75 percentage points for the fourth time in a row as it advanced its long-running battle to bring down persistently high US inflation.
The Federal Open Market Committee voted unanimously to increase the federal funds rate to a new target range of 3.75 per cent to 4 per cent following its latest two-day meeting. The fourth successive rate rise comes as the US central bank tries to stamp out price pressures in an economy that is proving more resilient than expected in the face of its monetary tightening campaign.
Stocks seesawed on Wednesday, but eventually ended the day lower, after Jerome H. Powell, the Federal Reserve chair, dashed investors’ hopes that an end to the central bank’s rate increases may soon be over.
Wall Street’s benchmark S&P 500 index ended the day 2.5 per cent lower and the Nasdaq Composite fell 3.4 per cent after a volatile afternoon of trading.
Stocks had started the day lower as investors braced for the Fed to raise interest rates a further 0.75 percentage points. The central bank followed through on that expectation, but attention quickly shifted to what the Fed was thinking about interest rate increases to come.
The Fed’s initial statement, released alongside its rate decision, appeared to point to a more cautious approach, accounting for the large rate increases that have already happened and noting that it may still take time for the economic effect of those rate increases to be felt.
US stocks sank after Federal Reserve chair Jay Powell cautioned that it was still “very premature” to think about pausing interest rate rises as the central bank delivered its fourth supersized increase in a row.
Those higher loan costs have weakened the home market, in particular. The average rate on a 30-year fixed-rate mortgage, which was just 3.14% a year ago, topped 7% last week for the first time since 2002, mortgage buyer Freddie Mac reported. Nationwide, sales of existing homes have fallen for eight straight months.
Fed officials have emphasized that they need to raise rates significantly to tame inflation, which has caused hardships for millions of households. High inflation has also become a central point of attack for Republicans in the midterm congressional elections.
Yet some economists have said the Fed should soon consider scaling back the fastest pace of rate increases since the early 1980s.
Total nonfarm payroll employment increased by 261,000 in October, and the unemployment rate rose to 3.7 percent, the U.S. Bureau of Labor Statistics reported. Notable job gains occurred in health care, professional and technical services, and manufacturing.
From the New York Times: Two measurements tell two stories about the strength of U.S. employment.
Job alerts: Here’s something pretty much anyone who follows economic data closely can agree on: The U.S. labor market is hot, but cooling.
What’s less clear is just how hot it is, or how fast it’s cooling down. That question matters a lot to Federal Reserve policymakers trying to find a way to bring inflation under control without causing a recession.
Supply and demand-The biggest problem facing the economy right now is that prices are rising much too quickly. That dynamic stems partly from the lingering effects of the pandemic, which continue to disrupt international supply chains, and global forces, like the war in Ukraine, which has pushed up the price of food and energy. Most economists agree that rapid inflation is also at least partly the result of excessive demand: American consumers want more cars, airline tickets and restaurant meals than companies can produce, pushing up prices.
The Fed is trying to tamp down demand by raising interest rates, which makes borrowing money more expensive for consumers and businesses. Yesterday, the central bank announced it would raise rates by three-quarters of a point for the fourth time since June.
That move was widely expected. But experts are less in agreement about what the Fed will do in the months ahead. Some economists argue it should hold off on further rate increases and see whether inflation begins to ease. Others say the Fed should keep going until its efforts clearly have an effect.
Which path policymakers choose depends in part on how Jerome Powell, the Fed chair, and his colleagues view the labor market. If companies keep adding jobs and raising pay, inflation is likely to remain high, and the Fed is likely to remain aggressive in its fight to tame it. If job growth stalls and unemployment rises, the Fed could pause sooner to avoid causing a recession.
So far, the Fed seems firmly on the side of those who see the job market as too hot. Powell said yesterday that any talk of a pause in rate increases is “premature.”
Job openings-For the past year, the Fed has been focused on one measure of the labor market in particular: job openings. Powell has repeatedly noted that there are roughly twice as many vacant jobs as unemployed workers available to fill them.
The logic behind Powell’s attention on job openings is simple. They are a direct measure of demand, since employers typically don’t try to hire when no one is buying their products. And they have a clear connection to wage growth — and therefore inflation — because when lots of companies are hiring, they have to pay more to compete for workers.
Fed officials have been hoping that as interest rates rise, companies would respond by cutting back on recruitment. So far, we’ve seen only limited evidence of such a trend.
Some economists, however, have begun questioning the Fed’s focus on job openings. Other signals, like the unemployment rate, show the labor market is strong, but not nearly as strong as openings would imply.
Quitting time-Which brings us to our second indicator: what economists call quits.
You probably read about the “great resignation,” the surge in people leaving their jobs as the economy re-emerged from Covid-induced lockdowns. The phenomenon was real, but the narrative often missed a crucial element: Most weren’t quitting to sit on the couch. They were taking other, usually better-paying, jobs.
Economists see quitting as a sign of confidence among workers: Changing jobs is a risk, so people avoid doing so if they’re worried about the economy. And since people typically don’t jump employers without a bump in pay, job-switching contributes to wage growth. Data released yesterday from ADP, the payroll-processing giant, showed that people who switched jobs in October saw their pay rise roughly twice as quickly as people who stayed put.
In late 2020 and early 2021, resignations and job openings rose roughly in tandem. But then the number of people quitting began to level off, even as openings kept rising. Americans are still changing jobs more than they were before the pandemic, but only modestly so.
So if openings suggest the labor market is a raging inferno, resignations imply it is more like an uncomfortably hot day.