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Happy Friday!
Welcome back to this week's Economic Perspective! This week, still reeling from the devastating impacts of Hurricane Helene, which made landfall a mere two weeks ago as a Category 4 storm in the Big Bend area of the Florida Gulf Coast, we are recovering from and still assessing the devastation of Hurricane Milton. All of our team members at TBG's headquarters, located in Winter Park, are safe, and the office itself has luckily been mostly unaffected by the storm - in large part thanks to TBG's electric vehicles that acted as generators, providing electricity to the office and allowing us to continue our work. Many more in the area are not as lucky, with over 2 million Floridians still without power. We hope for a speedy recovery for all from this harrowing storm.
This week, we bring stories about the U.S. port strike, a new EPA rule regarding lead pipes, a new Climate Resilience Strategy in Washington State, and more! We hope you enjoy the read and let us know what you think! Please feel free to forward this to anyone you think would be interested. If you’d like to view previous editions please click here, or to subscribe please click here!
Have a great weekend!
U.S. Dock Workers and Port Operators Strike Deal
The three-day U.S. dock workers strike came to an end last week after a tentative agreement was reached with port operators. The terms include a wage hike for dock workers of about 62% over six years, increasing average wages from $39 an hour to about $63 over the life of the contract. Although the strike was short-lived, it affected 36 ports and caused a temporary backlog of anchored ships on the U.S. East Coast and Gulf Coast. All other outstanding issues will be negotiated after January 15, 2025. Read More.
New EPA Rule Requires Removal of Every Lead Pipe in U.S. Drinking Water Systems
This week, the Biden Administration announced a new federal rule requiring water utilities to replace every lead pipe in the country within the next ten years. The rule addresses historical environmental issues faced by economically disadvantaged communities that have been affected by water contamination. Initially proposed for the first time by the U.S. Environmental Protection Agency (EPA) in 2023, the rule established the strictest drinking water lead limits in many years. EPA estimates the rule will prevent up to 900,000 infants from having low birthweight and avoid up to 1,500 premature infant deaths. Critics of the rule, however, are concerned about the potential increased costs to homeowners for lead pipe replacement. Read more here.
EU Olive Oil Supply to Swell as Spanish Crop Recovers from Drought
The olive oil supply in Europe is set to rise sharply as Spain has recovered from a previous drought. Despite a less favorable crop in Italy, this sharp incline in Spain as well as improvements in Greece and Portugal will outweigh Italy. Spain is forecasted to see a 48% increase in production due to spring rain. Coming weather will determine the final harvest though. During the two-year drought, households were buying more sunflower oil than olive oil. With the increase in supply prices should ease and olive oil consumption should increase by 7%. The largest uncertainty will be whether prices adapt to increased availability and consumer reactions. Read More.
Satellite Information Helps Transform Transportation Industry
The relatively recent transformation of the satellite industry with the domination of low-orbit constellations by commercial enterprises is enhancing the global economy and mobility systems with access to new data and applications. The Space-based technology is among one of the mega-trends analyzed in the OliverWyman 2024 Sustainability Report supporting everything from airport operations to dynamic traffic management to automated public transport services; the markets are estimated to grow between 5-10% though 2030. Newer participants in the ecosystem for space-based mobility systems operate in areas of fleet management, advanced driver assistance, public transit, congestion control, emergency assistance, etc. Read more here.
Washington Unveils Climate Resilience Strategy
Late last month, the Washington State Department of Ecology (DOE) released the Washington State Climate Resilience Strategy, highlighting potential threats from climate change and potential mitigation methods. The report cites, among other reasons, warming oceans and a 25% reduction in snowpack levels since 1950, with no signs that levels will increase without intervention. Laura Watson, director of the Washington State DOE, noted that this year had only moderate drought and fewer major wildfires as compared to previous years, but that this was a “temporary reprieve”. Read more here and here. A summary of the Climate Resilience Strategy is here.
‘Godfather of AI’ Wins Nobel Prize
One of the so-called Godfathers of AI, Geoffrey Hinton, along with fellow researcher, J. Hopfield were awarded the Nobel Prize in Physics this week for their significant early work on artificial neural networks. Their work opened the way for advancements in machine learning used every day from fraud detection to driverless vehicles. Their work is credited to have formed the technological building blocks for large language models like ChatGPT, as well as image recognition models. However, Hinton fears that modern AI technology could potentially end humanity. Read more here.
Data Visualization of the Week
Rising Consumer Confidence in Florida
Consumer sentiment in Florida is on the rise, with optimism about the economy increasing for the 4th consecutive month according to UF’s September Consumer Sentiment Survey. Confidence among Floridians rose by 1.6 points, mirroring a national trend that saw a 2-point increase. Contributing to this rise were the Federal Reserve’s recent slash in interest rate as well as Florida’s unemployment rate holding steady at 3.3%. However, respondents to the survey expressed mixed feelings about personal financials, with confidence in their own finances dropping slightly. The impacts of Hurricanes Helene and Milton are also uncertain at this time with some decline in sentiment anticipated due to the storms, but further interest rate cuts may ultimately improve consumer confidence in coming months. Read more here. Image courtesy of University of Florida's Bureau of Economic and Business Research.
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