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A measurement of wholesale inflation rose more than expected in August, according to data from the .��

What’s going on: The Producer Price Index for final demand goods and services rose a seasonally adjusted 0.7% last month, and 1.6% on a year-over-year basis.

• The increase was the strongest monthly gain since June 2022.
• Core producer prices rose 3.0% year-over-year, an increase from July’s 2.9%.

Final demand goods: Producer prices for final demand goods jumped 2.0% in August, buoyed largely by a 10.5% rise in energy costs.

• Excluding food and energy, producer prices for final demand goods inched up 0.1% last month.

Final demand services: Producer prices for final demand services, meanwhile, increased 0.2%, with transportation and warehousing prices rising 1.4%.

Our take: “Despite the uptick in wholesale inflation in August, the overall trend remained encouraging,” said 17�Թ����� Chief Economist Chad Moutray. “The data continue to reflect moderation in pricing pressures year to date, particularly as core producer prices continued to moderate. The deceleration in producer prices will likely take some pressure off the Federal Reserve, even as it remains concerned about lingering inflationary pressures overall.”
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Chevron Corp. has bought a majority stake in a federal government–supported “green” hydrogen project in Utah that, once completed, will “produce massive volumes” of the renewable energy source, according to E&E News’ (subscription).

What’s going on: Chevron said on Tuesday that it had completed a deal with fuel-storage developer Magnum Development LLC to take over full ownership of the Utah salt caverns where green hydrogen production and storage is set to take place.

• This purchase gives the energy giant “a majority interest in the joint venture that is developing the [Advanced Clean Energy Storage] project.”
• ACES—in which Mitsubishi Power Americas Inc. and private-equity firm Haddington Ventures LLC are also partners—won a $504 million loan guarantee from the Department of Energy in 2022.
• The project is part of a larger effort by Chevron to develop emerging energy technologies through 2028.

Why it’s important: “We seek to leverage the unique strengths of each partner to develop a large-scale, hydrogen platform that provides affordable, reliable, ever-cleaner energy and helps our customers achieve their lower carbon goals,” Chevron New Energies Vice President Austin Knight said in a statement.

• The plan is to make the hydrogen in the salt caverns in Delta, Utah, “for use at a nearby power plant” looking to diversify its energy mix—and aiming to run entirely on hydrogen by 2045.

Another effort: In partnership with ExxonMobil Corp. and Shell PLC, Chevron is also part of a Texas industry group asking for $1.25 billion in 2021 Bipartisan Infrastructure Law funds to construct hydrogen “hubs,” large-scale demonstrations of hydrogen production, transportation, usage and storage.

A model project: “Currently under construction, the ACES project could become one of the western U.S.’s most important demonstrations of what a low-carbon hydrogen industry might look like,” ENERGYWIRE reports.

The 17�Թ�����’s take: “Manufacturers view clean energy solutions, such as hydrogen, as an important part of our country’s energy present and future—and the industry is used to leading the charge in developing and scaling hydrogen projects for widespread use,” said 17�Թ����� Vice President of Domestic Economic Policy Brandon Farris.

• “The 17�Թ����� is to ensuring that the hydrogen tax credit and other incentives help build the appropriate market conditions for hydrogen projects to succeed.”

Manufacturers are the least optimistic they’ve been about the economy and their businesses since 2020, according to the 17�Թ�����’s , released yesterday.

Notable: Here are some of the key findings from the latest survey, which was conducted last month:

• Just 65.1% of manufacturers feel positive about their company’s future, a decline from the previous quarter (67.0%).
• Some 69.1% of small manufacturers and 63.2% of all respondents would increase hiring or employee compensation if their regulatory burdens decreased.
• More than 70% of manufacturers would buy additional capital equipment if those same burdens were lightened.
• The top challenges facing manufacturers—whose concern about an unfavorable business climate was at its highest since 2017 in this survey—are retaining a high-quality workforce (72.1%), a weakened domestic economy (60.7%), rising health care/insurance costs (45.5%) and supply chain issues (37.8%).

The 17�Թ����� says: “[T]his survey makes clear that unbalanced federal regulations are harming families and communities,” said 17�Թ����� President and CEO Jay Timmons.

• “Congress and the administration can help correct this trend by restoring sensible regulations, enacting further permitting reforms, taking action to keep our tax code competitive … and [moving to] build on the progress we achieved with tax reform, the Bipartisan Infrastructure Law, the CHIPS and Science Act and more.”

The average household income in the U.S. fell for the third year in a row in 2022, according to (subscription).

What’s going on: “Americans’ inflation-adjusted median household income fell to $74,580 in 2022, declining 2.3% from the 2021 estimate of $76,330, the Census Bureau said Tuesday. The amount has dropped 4.7% since its peak in 2019.”

• Inflation reached a 40-year high last summer “as the pandemic upended supply chains and the Ukraine war drove up energy prices.”

By region and race: Median incomes dropped by 3% to 5% in the Northeast, West and Midwest, but were unchanged in the South.

• “White households saw median income decline by 3.6% in 2022 from the prior year to $81,100, while incomes in Black, Asian and Hispanic households were essentially unchanged.”

Earnings: Wages and salaries “showed a mixed picture,” with average earnings in 2022 declining 2.2% from 2021.

• Among full-time, year-round workers, average earnings decreased more moderately, by 1.3%.
• The 2022 poverty rate was similar to the 2021 rate.

A turning tide? In recent months, however, inflation has improved following benchmark interest-rate hikes, giving a boost to Americans’ purchasing power.

• “Shifting into the present and into the future, the prospects are better for wages to make up for some of the ground lost during the last couple of years,” one source told the Journal.
• Beginning at the end of 2022, wage growth outstripped inflation, and in July inflation-adjusted pay increased 3%.

The owner of seven oil-and-gas leases that were recently canceled by the Biden administration is readying for a legal fight, according to POLITICO’s (subscription).

What’s going on: The Alaska Industrial Development and Export Authority—which bought the leases from the federal government in 2021—“has vowed to pursue legal action against the federal government for the cancellation of the leases spanning 365,000 acres in the coastal plain of the Arctic National Wildlife Refuge.”

• Last week, the Interior Department announced that it would nullify the leases “based on what the administration called an inadequate National Environmental Policy Act review process.”
• “A willingness to circumvent laws passed by Congress has consequences reaching far beyond ANWR’s boundaries, and will impact future development across this country,” the economic development organization responded in a statement.

Required by law: While canceling the leases appears to fall under Interior’s purview, the agency is obligated by the 2017 tax law to offer two lease sales in ANWR, according to former Interior Secretary David Bernhardt, ENERGYWIRE reports.

Why it’s important: ANWR is estimated to hold more than barrels of technically recoverable oil. Drilling for it would create more than 100,000 jobs while generating hundreds of billions of dollars in new government revenue, according to from the House Committee on Natural Resources cited in USA Today.

Our take: “The administration should be taking actions that strengthen energy security, not weaken it,” said 17�Թ����� Vice President of Domestic Economic Policy Brandon Farris.

• “The cancellation of the ANWR leases based on the NEPA review process underscores our need to continue to reform our broken permitting system. The 17�Թ����� continues to push Congress and the administration to develop policies that cut through red tape to develop all energy projects, including renewables, nuclear, oil and gas, hydrogen and more.”

Looking to make the most of the AI computer chips they have, technology companies are increasingly “turning to software that can squeeze more performance out of available chips and help reduce costs,” (subscription) reports.

What’s going on: While larger firms are using hard-to-get graphics processing units to build multiple different AI models that “do things such as detect cybersecurity threats and help improve network performance,” other businesses are using central processing units to do similar tasks.

• CPUs aren’t as powerful as GPUs, but they are easier to find.
• And when “tuned with open-source software tools to get more performance out of them,” CPUs can help businesses meet their processing needs.

Boosting performance: As GPU demand continues to outpace supply, companies are using third-party software to squeeze additional performance from existing GPUs, too.

• One Israeli start-up installs optimization software on client GPUs to “automatically put idle computing power to use to gain better processing efficiency,” according to The Wall Street Journal.
• A Seattle-based startup “is betting that most businesses won’t want to deal with owning and managing an array of AI hardware … so it rents out access to processing power from cloud providers that it speeds up on customers’ behalf.”

Renting the cloud: Indeed, cloud-company giants can offer access to much-needed processing power “by renting it out as they do with computer services,” one source told the Journal.
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Factory orders for manufactured products declined 2.1% in July, after having risen for four consecutive months, while factory shipments increased 0.5%, according to data.

Orders: Durable goods orders fell 5.2% in July, mostly due to declines in orders of aircraft and aircraft parts.

• However … excluding transportation equipment, factory orders increased 0.8% in July, with durable goods up 0.5%.
• Nondurable goods orders rose 1.1% in the same period.

A spending proxy rises: New orders for core capital goods—nondefense capital goods excluding aircraft, a proxy for capital spending in the U.S. economy—inched up 0.1% in July to $73.60 billion, just shy of the record high of $73.87 billion in May.

• Year-over-year, core capital goods orders have increased 0.8%.

The long view: Orders for new manufactured goods have decreased 0.7% in the past year, with factory orders excluding transportation declining 2.5% year-over-year.��

Shipments: July marked the third consecutive month of increases for factory shipments.

• But in the past 12 months, total factory shipments have declined 0.6%, or 2.3% year-over-year excluding transportation equipment.
• Core capital goods shipments fell 0.3% in July, pulling back for the second month in a row from May’s record high of $74.05 billion.

In related news: Economic activity in the U.S. services sector continued to grow last month, with the ISM® Services PMI recording its eighth straight month of growth, the strongest pace since February, according to .
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Real estate companies are turning to artificial intelligence to help cut emissions from commercial buildings, according to (subscription).

What’s going on: While developers and builders have begun using more energy-efficient design and building methods in recent decades, and governments are introducing stricter energy-use codes for commercial spaces, “more than 80% of buildings don’t have smart systems to efficiently manage their energy use.”

• Commercial real estate manager JLL “has been making a string of investments to bring AI systems to companies looking to cut their emissions. … JLL says it expects 56% of organizations to pay a premium for sustainable spaces by 2025.”
• One of its investments is in a firm that installs electric motors and small computers into building systems to better control heating and cooling.

Why it’s important: “AI building systems learn from historical patterns and the daily habits of occupants to predict and power things on and off.”

• “For instance, software and hardware that automatically manages lights, heating and cooling can help buildings cut 20% or more of their yearly energy use.”

A caveat: Just 10–15% of buildings have systems in place to collect the data needed to make these predictions.

• As one source told the Journal, “Bad data means you can’t do any kind of schedules, rules or more sophisticated use cases around artificial intelligence. You have to have the data.”

Check it out: Speaking of data collection, the Manufacturing Leadership Council (the 17�Թ�����’s digital transformation division) is hosting an event in December that will help manufacturers envision what a data-driven industry might look like by 2030. Learn more and register .

An overtime pay rule proposed last week by the Biden administration could cost employers—including manufacturers—up to $664 million over a decade, according to . magazine.

What’s going on: A draft regulation set forth last week by the Labor Department “would require employers to provide overtime pay to salaried workers who earn less than $1,059 per week, or around $55,000 per year. The current overtime threshold is $35,568. The Labor Department is responsible for setting the threshold that requires employers to pay out overtime.​”

• In compliance with the Fair Labor Standards Act, many companies already pay overtime to hourly employees who work more than 40 hours a week. While the FLSA doesn’t apply to salaried workers, the new requirement would.

Why it’s problematic: If the rule goes into effect, its cost to employers could be as high as “$664 million (with a 7 percent discount rate) over a 10-year period,” according to the Labor Department—and that’s a price manufacturers can ill afford, .

• “Manufacturers have spent the past several years adapting operations and personnel management resources to meet the evolving needs of their workforce in a post-pandemic environment, including through improved wages and benefits and productive workplace accommodations,” said 17�Թ����� Managing Vice President of Policy Chris Netram.
• “The … proposed rule would inject new regulatory burdens and compliance costs to an industry already reeling from workforce shortages and an onslaught of other unbalanced regulations.”

What’s next: Once published in the Federal Register, the draft regulation will be subject to a 60-day public comment period.��

Supply chain problems, PALIoT Solutions is coming for you.

This fall, the New-York-state-based startup, whose name derives from a combination of “pallet” and “IoT,” will begin production of its smart shipping pallets. According to company leaders, these products will do nothing less than revolutionize the way food and goods are transported.

From vision to reality: PALIoT cofounders Paul Barry and Richard MacDonald envisioned pallets “whose positive impact on the environment keeps increasing as more of them are manufactured and deployed,” according to the firm’s .

• To accomplish this feat, the pallets had to be both far lighter and more durable than typical pallets, which are made of wood and nails.
• After significant research and development, Barry and MacDonald came up with the solution: a polyurea-coated, engineered-plywood pallet that was 20 pounds lighter than its traditional peers and contained a proprietary sensor capable of instant communication with the cloud, making inventory tracking a cinch.

The “secret sauce”: “The ‘secret sauce’ is essentially a smart mesh network,” said Barry, who hails from Ireland and has an electrical engineering and investment banking background. “The PALIoT pallets in a shipment will all talk to each other, say, ‘Hey, I’m here.’ And [after shipping,] because they know they’ve been on a truck, they know they have to report all that valuable inventory and environmental data back to the cloud.”

• PALIoT, which will rent its pallets to customers using a per-pallet, pooling model (with an optional subscription service), acquired exclusive global use of the mist® Mesh Networking protocol. This ensures that communication is highly secure and battery sensitive at all times.
• The company estimates it will initially produce between 650,000 and 700,000 pallets a year in the first phase of the launch.

Read the full story .
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