Input Stories

The U.S. fertility rate is at record lows (The Wall Street Journal, subscription).

What’s going on: “The total fertility rate fell to 1.62 births per woman in 2023, a 2% decline from a year earlier, federal data released Thursday showed. It is the lowest rate recorded since the government began tracking it in the 1930s.”

• The data reflect a continuing trend: American women, across ethnic groups, are delaying or foregoing having children.
• In 2023, the number of U.S. births was the lowest in 44 years.

Why it’s happening: “A confluence of factors are at play. American women are having fewer children, later in life. Women are establishing fulfilling careers and have more access to contraception.”

• As a group, they are also increasingly uncertain about their futures “and spending more of their income on homeownership, student debt and child care.”

The details: From 2022 to 2023, birthrates declined more among younger women.

• “Women in their mid-to-late 30s are having children at similar rates to those in their early to mid-20s. Birthrates for women 35–39 fell to 54.7 births per 1,000 women—closer to the rates for women 20–24, which dropped 4% to 55.4 births per 1,000 women in 2023.”
• Birthrates among women in their 40s stayed the same.

Why it’s important: Fewer U.S. births could reshape the economy and “other facets of American life.”

• However, “[a]n influx of people immigrating to the U.S. could offset the impact of lower birthrates on the U.S. population’s size,” said Brady Hamilton, a co-author of the Centers for Disease Control and Prevention report that includes the data findings. “Immigration has risen in recent years, easing labor shortages and expanding the population of big metropolitan areas.”

​​​​​​​Read more: For a comprehensive blueprint on U.S. immigration reform, download “A Way Forward,” the NAM’s recommendations to Congress on the subject.
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Inflation, as measured by the Federal Reserve’s preferred gauge, remained elevated last month (CNN).

What’s going on: “The Personal Consumption Expenditures price index … accelerated to 2.7% for the year ended in March. … That rate was above economists’ expectations for a 2.6% gain and landed above February’s reading of 2.5%.”

• Prices increased 0.3% on a monthly basis, the same pace as in February.

Core PCE: So-called “core” PCE, which excludes often-volatile food and energy prices, remained steady at 2.8%.

Spending: Consumer spending stayed strong in March, rising 0.8% from February and exceeding economists’ expectations.

Final rules released Thursday by the Environmental Protection Agency to reduce greenhouse gas emissions from traditional fuel-fired power plants are not achievable without permitting reform—and they pose a threat to U.S. national and economic security, the NAM said yesterday.

What’s going on: The new rules, part of President Biden’s pledge to create a carbon-free energy sector by 2035, mandate that:

• Existing coal-fired plants and new natural gas–fired facilities cut or capture 90% of their emissions by 2032;
• Coal-fired plants drastically reduce wastewater runoff and severely tighten the emissions standard for heavy metals; and
• Coal ash—including past deposits “placed in areas that were unregulated at the federal level until now”—be managed in storage ponds.

A first: “The power plant rule marks the first time the federal government has restricted carbon dioxide emissions from existing coal-fired power plants” (Associated Press).

• The new regulations—which face almost certain court challenges—set emissions caps that plant operators would be required to meet.

Targeting major energy sources: Natural gas generates approximately 43% of all U.S. electricity, while coal generates about 16% (AP).

Why else it’s problematic: While manufacturers appreciate that the EPA heeded the input of their industry and did not include existing gas plants in the new requirements, as written the final rules are unattainable because the administration and Congress have not undertaken much-needed, comprehensive permitting reform, according to NAM President and CEO Jay Timmons.

• “Congress and the president have not enacted permitting reform—making it impossible to achieve the EPA’s highly aspirational mandates,” Timmons said. What’s more, the final rules threaten “grid reliability because of the unrealistic timeline for power plants to adopt technologies within the next 10 years that have yet to even be proven at scale.”
• Pushing through yet another set of regulations in the absence of systemic reforms burdens an already overtaxed national electrical grid, jeopardizing U.S. security in a way that “literally could leave Americans in the dark and factories offline.”

What should be done: The EPA should partner with—not undermine—manufacturers “to achieve a more balanced regulatory framework to help reach our climate goals.”

The NAM told the Office of the United States Trade Representative this week that it must use existing trade and investment tools to promote supply chain resilience for manufacturers in the U.S.

What’s going on: “Manufacturers and workers in the U.S. need USTR to undertake a proactive and competitive trade and investment policy that opens markets, eliminates barriers, enables the sourcing of necessary inputs and creates opportunities for inbound and outbound investment,” the NAM said Monday.

• The suggestions were in response to a USTR call for comment on “strategies that [will] advance U.S. supply chain resilience” (Federal Register).

What should be done: While manufacturers appreciate engagement with partners through frameworks such as the Indo-Pacific Economic Framework and the Americas Partnership for Economic Prosperity, the NAM encourages the government to “aggressively pursue ambitious agreements that include market access and the true removal of barriers to economic engagement with our partners.” The USTR can help manufacturers by:

• Adjusting or eliminating “current tariffs on manufacturers and ensur[ing] they are applied in such a way that creates a competitive environment for manufacturing in the U.S.”;
• “Negotiating more high-quality, modernized trade agreements with foreign partners” to remove trade barriers and address discriminatory measures; and
• Enforcing on-the-books trade agreements “to ensure that our trading partners are playing by the rules.”

Why it’s important: The aforementioned actions (and others) by the USTR would create “a competitive environment for manufacturers in the U.S. to succeed,” the NAM said.

Two major U.S. West Coast ports saw continued cargo growth in March, coinciding with supply chain fallout from the Francis Scott Key Bridge collapse in Baltimore (Los Angeles Daily News).

What’s going on: The Port of Los Angeles “processed 743,000 twenty-foot equivalent units (TEUs, the industry’s standard measurement for cargo units) last month—up 19% from March 2023. It was the port’s eighth-consecutive month of year-over-year growth.”

• The Port of Long Beach last month moved 654,082 TEUs, a cargo increase of 8.3% from March 2023. Its imports rose 8.4% compared to last year.
• The ports anticipate April—traditionally “slack season” for the entry points—being “another busy month,” Port of Los Angeles Executive Director Gene Seroka said.

Why it’s important: The growth is reflective of “resilient consumer spending, [which] is key to our nation’s growth,” Seroka continued. “U.S. economic indicators remain positive even with some uncertainty regarding interest rates and the latest inflation data.”

Shoring up systems: The Port of Los Angeles is working to ensure the safety of its systems following the March 26 Key Bridge collapse and an executive order by President Biden that increases cybersecurity regulations at all U.S. ports.

The Biden administration has placed new restrictions on traditional energy exploration and production in large portions of Alaska’s Arctic (Law360, subscription).

What’s going on: A rule handed down last Friday by the U.S. Department of the Interior’s Bureau of Land Management puts “[n]ew limits on fossil fuel production in the National Petroleum Reserve-Alaska,” a 22.8 million–acre site that holds large reserves of oil and natural gas.

• The rule limits future oil-and-gas leases and industrial development and “codifies a ban on new leasing across a further 10.6 million acres of the reserve, about 40% of its total area,” according to the agency.
• The regulation also rules out construction of a road proposed by the Alaska Industrial Development and Export Authority to allow miners to reach mining sites in Alaska’s north-central region.

Why it’s problematic: The move—which the administration said is intended to protect wildlife habitats and “honor the culture [and] history” of Alaska Natives—erodes U.S. energy security and independence while financially harming local indigenous people.

• “The final rule ‘will hurt the very residents the federal government purports to help by rolling back years of progress, impoverishing our communities, and imperiling our Iñupiaq culture,’ Voice of the Arctic Iñupiat President Nagruk Harcharek said.”
• The NPR-A contains approximately 8.7 billion barrels of oil and 25 trillion cubic feet of natural gas resources, according to the U.S. Geological Survey.

The last word: “The rich resources of the Arctic should be part of a responsible, all-of-the-above approach to U.S. energy security and independence,” said NAM Director of Energy and Resources Policy Michael Davin. “This rule is a step backward on the path to achieving a sustainable energy future.”

As government regulation of per- and polyfluoroalkyl substances ramps up worldwide, Thermo Fisher Scientific is seeing a boom in its PFAS testing business.

“We’ve seen an increase in demand from a number of countries in the Americas and in Europe,” said Toby Astill, director of environmental and food safety in chromatography and mass spectrometry at the life sciences giant. “Those regions are driving more discussions around current and future regulations than other regions.”

• In recent weeks, the Environmental Protection Agency has issued several final rules concerning PFAS. These include the first-ever national regulation limiting PFAS in drinking water to near-zero levels and, just last week, the designation of two PFAS chemicals as hazardous substances under the Superfund law.

Writing is on the wall: Thermo Fisher foresaw the need for comprehensive PFAS analysis early on. That’s why it’s been offering clients a full suite of testing capabilities for more than a decade.

• Commonly called “forever chemicals” because they do not break down easily in the environment, PFAS were used widely in everyday products starting in the 1940s, owing to their ability to put out fires and resist grease, corrosion and stains in addition to countless other consumer and industrial applications.
• Using chromatography—“technology that allows lab users to separate and analyze the different components in samples,” according to Astill—Thermo Fisher can “confirm the presence of a specific substance and determine how much is there.”
• The tech is not limited to PFAS, however; it can also detect, down to parts per trillion, the presence of pesticides, heavy metals and other substances, Astill said. And it works on samples of almost anything, including food packaging, water and even air.

Aiding compliance: In coming years, manufacturers may need to analyze their PFAS exposure comprehensively to remain compliant with Toxic Substances Control Act and other international regulations, including those from the EPA, Astill said.

Read the full story here.

New orders for durable goods in the U.S. increased more than expected last month (Business Insider and U.S. Census Bureau). Shipments were virtually unchanged.

What’s going on: Orders for manufactured durable goods rose 2.6% in March, to $283.4 billion.

• The rise followed a downwardly revised 0.7% increase in February.
• Shipments of durable goods slipped slightly, down $0.1 billion, but remained essentially flat at $282.4 billion following a 1.2% increase in February.

The details: Excluding transportation, new orders increased 0.2%, and excluding defense, new orders rose 2.3%.

• Transportation equipment drove the slight decrease in shipments of durable goods.

Inventories and unfilled orders: Stocks of manufactured durable goods were nearly unchanged at $527.9 billion, a decrease of less than $0.1 billion from February. This follows seven consecutive monthly increases.

• Unfilled orders for manufactured durable goods rose 0.4% in March to $1,397.2 billion, following a decrease in February.

It’s been nearly a month since a cargo ship hit the Francis Scott Key Bridge in Baltimore, Maryland, resulting in six deaths, the destruction of the bridge and the shuttering of an important East Coast port.

• But thanks to hard behind-the-scenes work by Norfolk Southern railway since the accident, customers aren’t feeling the supply chain pinch the way they otherwise would.

What happened: NAM President and CEO Jay Timmons, along with an NAM delegation, visited the Port of Baltimore last Friday to tour Norfolk Southern’s operations there. The port is the largest for vehicle shipping in the U.S. and was the 17th biggest in the nation by total tonnage in 2021.

• On March 26, the day the Singapore-flagged Dali cargo vessel hit the Key Bridge, Norfolk Southern—which moves 7 million carloads of cargo annually—began strategizing ways to support increased shipping volumes on behalf of its customers. And it’s been doing that ever since.
• “We often say the weight of the world moves on rail … and it’s true,” Norfolk Southern Chief Marketing Officer and NAM board member Ed Elkins told the NAM during the site visit. “Our ability to serve the market through temporary disruption is really a demonstration of our strategy in action, where we leverage the experience of our railroaders and the strength of our franchise to find a Better Way to provide safe, reliable service.”

Quick adaptation: Norfolk Southern’s strategy for adapting to the closure of Baltimore’s port has included:

• The launch early this month of a dedicated new service to move freight between the ports of New York and New Jersey and Baltimore’s Seagirt Marine Terminal;
• The facilitation by the railway’s Triple Crown Services Inc.—a door-to-door East Coast truckload transit network—of a dedicated intermodal service for cargo owners who require door-to-door service;
• The use of “Go Teams,” groups of employees ready for rapid response service and created by Norfolk Southern during the pandemic; and
• Regional collaboration with the Port of Virginia to leverage service points including the Virginia Inland Port and others.

Reopening: The Port of Baltimore could be back to full functionality by the end of May, the U.S. Army Corps of Engineers said earlier this month.

• “The NAM will stay in close coordination with our members regarding supply chain impacts stemming from the collapse of the Francis Scott Key Bridge,” said NAM Director of Transportation, Infrastructure and Labor Policy Max Hyman. “We also remain engaged with leading federal officials on recovery efforts and will continue to support critical infrastructure projects such as the Port of Baltimore.”

In a move that will hinder the growth of manufacturing in the U.S., according to the NAM, the Environmental Protection Agency on Friday designated two widely used chemicals as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act, or Superfund law, Law360 (subscription) reports.

What’s going on: The addition of two per- and polyfluoroalkyl substances, or PFAS, to the federal list “means the EPA can investigate and clean up releases of the chemicals and ensure that leaks, spills and other releases are reported. Under CERCLA, the government and other parties can sue for contributions to cleanups and to recover costs related to those actions.”

• The newly added PFAS are perfluorooctanoic acid, or PFOA, and perfluorooctanesulfonic acid, or PFOS. PFAS have been used across industries for decades for their unmatched ability to douse fires and resist corrosion, stains and grease.
• The news comes the same month the EPA announced the first-ever national regulation limiting PFAS levels in drinking water to near-zero levels.

What’s in it: “The rule requires entities to immediately report releases of PFOA and PFOS that meet or exceed the ‘reportable quantity’ to the National Response Center, state or tribal emergency response commission, and the local or tribal emergency planning committee, according to the EPA.”

Why it’s problematic: “[T]his unprecedented use of CERCLA authority by the EPA will only hamper President Biden’s vision of growing the manufacturing sector in the U.S.,”  NAM Managing Vice President of Policy Chris Netram said, adding that manufacturers support smart efforts to remove harmful substances from the environment.

• “The unique and unmatched chemical bond of these compounds means that there are no existing replacements for the critical products they make up.”
• Furthermore, the overly broad designation of PFOA and PFOS as hazardous “will make it harder for our industry to create innovative products and jobs.”