Capitol Update 8/21/2023
July jobless rates down in 7 states, up in 3; payroll jobs up in 4 states
In July, unemployment rates were lower in 7 states, higher in 3 states, and stable in 40 states and the District of Columbia. Nonfarm payroll employment increased in 4 states and was essentially unchanged in 46 states and the District.
Some high-school graduates are steering away from college and are pursuing alternatives for their future, including trades, a trend evident in Minnesota as college enrollment declines. “If you can show people a way that they can win, earn a good wage and be part of something maybe bigger than themselves, I think those are more important than the dollars themselves,” says Andy Lindus of Lindus Construction. WCCO-TV (Minneapolis)
A labor shortage has been particularly challenging for the construction industry amid a boom for manufacturing facilities, as such projects require special construction techniques, experts say. “Many of our members with auto manufacturing and semiconductor construction are struggling to find enough workers to meet very aggressive timelines,” says Brian Turmail, vice president of public affairs and strategic initiatives at the Associated General Contractors of America. “There’s enormous pressure to get these plants built.” Full Story: Construction Dive
The real yield on the 10-year Treasury increased to 1.84% Monday, the highest level since 2009, as traders lowered expectations of interest-rate cuts from the Federal Reserve next year. The demand helped the dollar recover from a one-year low. The nominal yield on the 10-year Treasury increased to 4.213%, the highest level since November. Full Story: Bloomberg Bloomberg
The White House has issued final Buy America binding guidance for use of domestically produced construction materials in government-funded infrastructure projects. The guidance establishes manufacturing standards for materials such as plastic, glass, drywall, fiber-optic cables and engineered wood. Full Story: Reuters
Panel Concludes China Tariffs On US Products Violated WTO Rules
Bloomberg reports that in a ruling published Wednesday, a panel of three WTO experts found that China “violated its fundamental trade commitments when it imposed tariffs on $2.4 billion worth of US products in retaliation for former President Donald Trump’s steel and aluminum duties.” The WTO panel “agreed with Washington’s claims that China’s tariffs denied the treatment as a so-called most favored nation, and that Beijing violated other trade concessions it made when it joined the WTO.” Reuters reports that the office of the US Trade Representative “said it was pleased with the WTO decision, adding that China had ‘illegally retaliated with sham ‘safeguard’ tariffs.’” China’s Commerce Ministry “said it had noted the WTO panel decision and demanded that the United States immediately lift tariffs imposed on steel and aluminium imports.” According to Reuters, “The U.S. imposed a 25% duty on steel imports and a 10% duty on aluminium imports in March 2018 based on the Donald Trump administration’s ‘Section 232’ national security investigation into steel and aluminium imports.”
San Francisco Fed Says Americans’ Excess Savings Will Be Depleted During Q3
Bloomberg reports research from the Federal Reserve Bank of San Francisco found that “excess savings US households built up during the pandemic will probably be exhausted in the current quarter…removing a key support for consumer spending that has boosted the US economy this year.” Researchers said in a blog post published Wednesday, “Our updated estimates suggest that households held less than $190 billion of aggregate excess savings by June. … There is considerable uncertainty in the outlook, but we estimate that these excess savings are likely to be depleted during the third quarter of 2023.”
Senate Majority Leader, House Majority Leader Agree To Draft CR To Avoid Shutdown
Reuters reports that on Wednesday, Senate Majority Leader Schumer “said he met with House Speaker Kevin McCarthy a few weeks ago and agreed to a resolution that could extend current federal government spending for a few months.” The New York Times says Schumer’s “comments were also an acknowledgment that Congress remains far from reaching any agreement on spending levels that would keep the government running on a longer-term basis.” Nevertheless, “appearing on television as part of a planned victory lap to mark the one-year anniversary of the Inflation Reduction Act, President Biden’s major climate and energy legislation, Mr. Schumer called his discussion with Mr. McCarthy ‘a good sign.’” Schumer is quoted as saying, “The hard right wants to shut down the government. But, McCarthy, I think, knows that that would be a disaster, not only for the country but for his party, because it’s clear which side wants to shut down the government and who is doing it.”
Stocks Fall Again As Fed Minutes Warn More Rate Hikes May Be Necessary
CNBC reports, “Stocks fell Wednesday as investors digested a summary of the Federal Reserve’s July meeting, which hinted at potentially higher rates.” The Dow Jones Industrial Average “dropped 180.65 points, or 0.52%, to end at 34,765.74,” the S&P 500 “dipped 0.76%, closing at 4,404.33,” and the Nasdaq Composite “declined 1.15%, ending the day at 13,474.63.” CNBC notes that “in the central bank’s July meeting minutes, officials said additional tightening may be necessary to bring down inflation. ‘With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,’ the meeting summary stated.”
A rise of 6.7% in single-family projects boosted total US home construction starts last month to a gain of 3.9% and an annualized rate of 1.45 million units, according to federal data. Meanwhile, permits to build single-family homes reached the highest point in more than a year as applications to build edged up 0.1%. Full Story: BNN Bloomberg (Canada)
A major liquefied natural gas facility boosted the nonbuilding category of total construction starts to a surge of 38% in July, and that in turn lifted total construction starts to a gain of 17% for the month, according to Dodge Construction Network. The seasonally adjusted annual rate of $1.2 trillion also benefited from a 20% gain in residential starts, although the nonresidential sector declined 6%. Full Story: Dodge Data & Analytics
Culverts can be deadly to fish trying to pass through, but $200 million in federal grants will be applied to reduce the problem. The funds are going to 169 projects across 59 tribal, state and local regions to serve an estimated 500 miles of fish ecosystems. Full Story: The Associated Press
Global household wealth declined last year, the first decrease since the financial crisis, according to a report by UBS and Credit Suisse. Net private wealth declined 2.4% as the economy grappled with higher inflation and other factors, although wealth increased in certain regions, including Latin America. Full Story: Bloomberg
With $46 million on hand from the state, major infrastructure upgrades are in store for California’s Port of Stockton, according to port director Kirk DeJesus. Construction on the port’s Rail Infrastructure Improvement for Sustainability Exports Project begins within a year as part of a larger upgrade valued at $280 million that will double the port’s capacity. Full Story: KXTV-TV (Sacramento, Calif.)
One of the biggest real estate projects of the past year has been paused in San Francisco. Lendlease wants more tenants to commit to the $1.2 billion Hayes Point mixed-use tower before proceeding, a move that comes 11 months into construction, with crucial substructure work completed. Full Story: Engineering News-Record (tiered subscription model)
California lawmakers push to cut fossil fuels, greenhouse gases from millions of buildings
Amid Thursday’s scorching heat, California lawmakers campaigned for a suite of bills they hope will tackle one of the state’s largest but overlooked sources of carbon pollution causing global warming: buildings.
State agencies have adopted several policies encouraging all-electric new construction. Nevertheless, the push to cut fossil fuels and the greenhouse gases they emit from the state’s millions of existing buildings has made little headway.
Next to a quickly melting ice sculpture of a California bear and a heat pump, which cools and warm homes more efficiently, lawmakers and advocates said their measures will help accelerate the transition from gas-powered buildings.
“California’s leading the way on clean energy on transportation. Now we’ve got to lead the way on clean, electric buildings,” said Laura Deehan, state director for Environment California. “We want to tackle climate pollution every day in people’s homes, in community buildings, in schools, in businesses and the big, big buildings all across the state.”
The group of bills dubbed‘Upgrade California’would establish emission standards for the state’s large commercial buildings, connect clean appliances to the electrical grid faster and initiate master plans for decarbonizing homes and schools.
California has cut emissions from its transportation sector and in-state electricity generation by well over 20% in the last two decades. Yet pollution from residential buildings has remained mostly stagnant and increased by 51% in commercial buildings.
One likely reason is the millions of dollars spent by utilities against the local and statewide push for building electrification. A Sacramento Bee investigation found that some of SoCalGas’ political opposition to climate policies has been billed to ratepayers.
Utilities are prohibited from spending ratepayer dollars on political activities, but the practice is difficult to catch and widespread, found The Bee and the watchdog arm of the California Public Utilities Commission.
States including Colorado, Connecticut and Maine have recently passed legislation that would prevent utilities from billing ratepayers for political lobbying.
Asked about potential responses in the California legislature, Sen. Josh Becker of San Mateo said “I think it’s clear that we’d like to do something.”
Becker, who represents the San Francisco Peninsula, authored two bills this year meant to hasten building electrification and help meet state climate goals. After Gov. Gavin Newsom passed a larger package of clean energy measures last year, advocates say fewer climate bills have made it to the end of this legislative session.
“We just have not made that much progress,” Becker said. “We have to think about how we’re going to attack those millions of existing structures. This legislative package is meant to put that front and center.”
One measure, SB48, would regulate energy efficiency and carbon emissions for commercial buildings larger than 50,000 square feet, a bill inspired by similar laws in Colorado and Washington. Another would speed up the time it takes for homes and other buildings to connect their clean energy to the electricity grid, SB410.
Two additional bills in the package would require the California Energy Commission to develop a comprehensive strategy to decarbonize all existing buildings in the state, AB593, and form a master plan to make public schools climate resilient, SB-394.
Assemblyman Matt Haney of San Francisco, who authored AB-593, said a detailed plan will help building owners switch to all-electric appliances in pursuit of state climate goals, which have been criticized for lacking actionable implementation strategies.
“We have to actually say, here’s how we’re going to support Californians,” Haney said. “Here’s how we’re going to train the workforce to make that transition to clean air conditioning, heat pumps, and clean energy technology.”
The state’s leading climate agency, the California Air Resources Board, has indicated that meeting its 2030 goal to reduce statewide greenhouse gas emissions 40% below 1990 levels faces serious obstacles.
The air board’s overarching climate plan assumes that 80% of new heating, ventilation, and air conditioning and water heater sales in the state will be electric by 2030, in both residential and commercial buildings.
After passing several policies to promote clean energy in new buildings, state agencies are beginning to tackle the intimidating task of converting existing homes, businesses, offices and other buildings across California.
Last year, the California Air Resources Board adopted a strategy to end the sales of gas-powered space and water heaters starting in 2030, and the California Energy Commission adopted building energy efficiency standards that encourage electric heat pump and solar technology.
Earlier this year, the California Public Utilities Commission also decided to reduce incentives for gas in new construction.
Now the air board is assessing whether buildings can meet those targets, and is considering a regulation that would ban the sale of all new gas appliances starting in 2030. The rule would allow only the sale of zero-emission appliances.