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Welcome THA Members
Click Below on the titles for complete Footnotes Webinar Meeting Materials:
June 6, 2008
Footnotes Transitions to Monthly Interactive Webinar Series
Beginning this month, Footnotes will transition from a weekly newsletter to a monthly interactive webinar series designed to present up to date information on the most critical legislative and policy issues facing legwear manufacturers and suppliers in the United States and abroad. Presented as a free service for THA members, each webinar will give hosiery producers an opportunity to hear directly from recognized government and private sector experts on the issue and to have their questions answered in real time. The webinars will not be recorded, and will be entirely off the record. However, a PowerPoint presentation prepared for each event will be posted in this space for later viewing.
The first Footnotes webinar will be held on Tuesday, June 24 at 11:30 AM EDT. It will examine practical steps THA members selling to or considering selling to Europe should be taking now to comply with new EU chemical regulations (REACH). To help navigate through this critical but complex topic, our guests will include Malachy Hargadon from the European Commission Delegation and Don Wright from the U.S. Department of Commerce. You will receive a flyer on the webinar shortly asking you to sign up for the event. Subsequent webinars will be held during the third week of each month. We look forward to speaking with you on June 24, and welcome your thoughts on topics for upcoming webinars. This will be the last weekly Footnotes newsletter.
Senate Considers Climate Change Bill that Could Cost Industry Trillions
The Senate returned from the Memorial Day congressional recess to begin debate on a highly controversial climate change bill, entitled the Lieberman-Warner Climate Security Act of 2008 (S. 3036). Better known in Washington as the “cap-and-trade” bill, the proposed legislation would require the U.S. Environmental Protection Agency (EPA) to set an annual limit or “cap” on the amount of certain greenhouse gases emitted by hosiery and other manufacturing plants over the next 40 years. Unlike previous “cap-and-trade” proposals, these limits could not be traded. Instead, the Lieberman-Warner bill would allow a percentage to be auctioned off to the highest bidder. Senate Republicans, the Bush Administration and manufacturers have expressed concern about the cost of this auction proposal to industry and the economy. The Congressional Budget Office (CBO) estimates compliance costs to industry – including hosiery manufacturers - would be in the tens of billions of dollars annually. EPA reckons the bill would reduce GDP between $1 trillion and $2.8 trillion by 2050.
Although the legislation is not expected to pass, congressional staff and industry lobbyists are paying close attention to the debate as a preview of what could happen next year, when lawmakers are expected to take up climate change legislation in earnest. Both Senators McCain (R-AZ) and Obama (D-IL) are cosponsors of the measure. The Senate is expected to continue debate through early next week. The Chairman of the newly created House Select Committee on Energy Independence and Global Warming, Representative Edward Markey (D-MA), introduced a similar measure (H.R. 6186) on Thursday, including even more ambitious “cap” levels.
Congress Passes Budget Resolution; Looks to Action on Healthcare and Labor Next Year
The House passed the final version of the fiscal year 2009 budget resolution (H.CON.RES.312) on Thursday, following Senate (S.CON.RES.70) action on Wednesday. The annual budget resolution is a blueprint designed to guide Congress in determining where roughly $1 trillion in federal spending should be allocated for the next fiscal year, which begins officially on October 1. Typically, the legislative calendar following the Memorial Day recess is focused on appropriations bills, which dole out the funding specified in the budget blueprint. But according to Capitol Hill sources, few, if any, of those bills are likely to pass in this election year. Instead, congressional leaders, in both the Senate and the House, reportedly plan to focus debate on measures that will directly affect voters – including healthcare and labor reforms – likely leaving work on spending measures until after the November elections.
The Senate Finance Committee held a hearing Tuesday on healthcare reform and has scheduled another hearing for early next week. While a healthcare reform bill is highly unlikely to become law in 2008, the hearings will provide useful insight into what labor organizations and other groups plan to propose next year, when lawmakers are expected to focus on healthcare reform. In preparation for next year’s debate, the Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) will co-host a bipartisan summit June 16, entitled “Prepare for Launch: Health Reform Summit 2008”. Most applicable to the legwear industry on the agenda is a discussion of employer-sponsored health insurance program trends.
House Committees have scheduled similar hearings on healthcare and labor issues for next week. In preparation for a House Ways and Means Health Subcommittee hearing next week on disparities in the healthcare system, Subcommittee Chairman Pete Stark (D-CA) criticized healthcare reform that would put more of the burden on employees in a Tuesday editorial in The Hill newspaper. “Shifting more cost and responsibility to the consumer as a strategy for reform or cost-containment is useless,” he wrote. The House Education and Labor Workforce Protections Subcommittee has scheduled a Monday hearing on family-friendly leave policies, and whether current labor law adequately protects employers.
Productivity Sees Small Gain, as Wal-Mart Sales Rise and U.S. Factories Report More Foreign Orders
Optimistic economic news for American manufacturers this week was tempered by continued high input prices and expected slow growth through the remainder of the year. The Labor Department reported Wednesday that U.S. worker productivity rose at an annual rate of 2.6 percent from January through March. That was faster than the government's first estimate of 2.2 percent a month ago. The report showed wage pressures had eased from the final three months of last year. Labor costs rose at an annual rate of 2.2 percent in the first quarter, compared with a 4.7 percent surge late in 2007. Better wages and benefits, while good for employees, can lead to higher inflation if employers are forced to raise prices to cover higher payroll costs. Rising productivity allows businesses to finance higher wages from increased output.
U.S. factory orders also jumped in April, according to U.S. Census Bureau statistics released Wednesday. The 1.1 percent increase followed a higher than expected 1.5 percent gain in March and suggested purchases from abroad are helping sustain domestic manufacturing. Total shipments in April jumped 2.2 percent, the most since December 2006. Manufacturers cut back production in May at a slower rate than over the past three months, according to a Monday report released by the Institute for Supply Management (ISM). The ISM index inched higher to 49.6 percent in May from 48.6 percent in April. These numbers indicate that the weaker dollar is making American-made goods more attractive to foreign buyers, helping to keep some factories in operation. Hosiery retailers – including Wal-Mart Stores and Costco Wholesale – recorded higher May sales, in line with a slight 0.2 percent increase in reported consumer spending, mostly due to consumers heading to discount chains to save money on fuel and food. While the dollar appears to have stabilized in recent weeks, actions elsewhere may continue to sustain U.S. price competitiveness in overseas markets. This week, European Central Bank President Jean-Claude Trichet said policy makers there may raise interest rates as soon as July, and India’s recent move to raise domestic fuel prices may require similar action in that country.
However, soaring petroleum costs (which have fallen from record highs but still held steady Thursday at $125 per barrel on the New York Mercantile Exchange), cooling consumer and business spending and other factors will likely continue to keep petroleum-based synthetic fiber costs high and to delay a strong manufacturing rebound in coming months. The first quarter’s real gross domestic product estimate increased at a 0.9 percent annual rate in the first three months of the year, slightly faster than the 0.6 percent rate in the last quarter of 2007. In an address to the International Monetary Conference in Spain this week, Federal Reserve Chairman Ben Bernanke forecasted that the second quarter is “likely to be relatively weak,” but that the second half of this year may have “somewhat better economic conditions.” The Commerce Department is investigating whether higher tariffs are needed on imported polyester staple fibers from Korea and Taiwan to compensate for sales of those products to the United States at prices below the cost of production. The outcome of that investigation (expected in May and June, respectively) could further boost man-made fiber prices.
FUTURES PRICES FOR SELECT HOSIERY INPUTS
(Thursday, May 29 -- Wednesday, June 4, 2008)
ARCHIVED FOOTNOTES (PAST ISSUES)
- MAY 30, 2008
- MAY 23, 2008
- MAY 16, 2008
- MAY 9, 2008
- MAY 5, 2008
- APRIL 28, 2008
- APRIL 18, 2008
- APRIL 11, 2008
- APRIL 4, 2008
- MARCH 28, 2008
- MARCH 21, 2008
- MARCH 14, 2008
- MARCH 7, 2008
- FEBRUARY 29, 2008
- FEBRUARY 22, 2008
- FEBRUARY 15, 2008
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