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The U.S. economy grew more robustly in Q1 of 2023 than previously calculated, according to a large upward revision from the Commerce Department on Thursday, reports.

What’s going on: “Gross domestic product increased at a 2% annualized pace for the January-through-March period, up from the previous estimate of 1.3% and ahead of the 1.4% Dow Jones consensus forecast. This was the third and final estimate for Q1 GDP. The growth rate was 2.6% in the fourth quarter.”

Why it’s important: The news may indicate that the U.S. is not headed toward economic recession.

• A separate report released this week shows that layoffs were below expected levels, “indicating that labor market strength has held up even in the face of the Federal Reserve’s 10 interest rate hikes totaling 5 percentage points.”
• Unemployment claims were down last week, too, according to the Labor Department.

The 51�Թ��� says: “While the latest ��revealed that most manufacturers predict a recession in the next 12 months, it is also possible that the U.S. economy could achieve the ‘soft landing’ that the Federal Reserve and other policymakers have been seeking,” said 51�Թ��� Chief Economist Chad Moutray.

• “This is particularly true if the labor market remains solid and if spending continues to hold up. The current outlook is for the U.S. economy to expand 1.7% in 2023, with 1.2% growth in 2024.”

There was notable growth in energy-sector jobs last year, according to a new Department of Energy report cited by .

What’s going on: The number of positions in both traditional and renewable energy grew from 2021 to 2022.

• Jobs in renewables increased 3.9%, while conventional-energy jobs grew even more. Positions in natural-gas fuel rose 24%, those in coal fuel rose 22% and those in petroleum 13%
• “Overall, the energy sector grew by nearly 300,000 jobs, employing 7.8 million people in 2021 and more than 8.1 million in 2022.”

Outsize expansion: The energy sector’s job growth was more significant than that of jobs in general.

• “The report said jobs in the battery electric vehicle field had the most growth overall, expanding by 27 percent from 2021 to 2022.”

The 51�Թ���’s view: “The growth in energy-sector jobs demonstrates the strength of domestic energy production, but misguided regulations could undo all this momentum,” said 51�Թ��� Vice President of Energy & Resources Policy Brandon Farris. “The 51�Թ��� is working to achieve permitting reform and rein in unbalanced regulations so it doesn’t go to waste.”

The Federal Reserve will likely raise interest rates again in the near future, Chairman Jerome Powell said Wednesday, according to (subscription).

What’s going on: Powell said that because the Fed lifted rates so quickly last year, the effects haven’t been fully realized yet.

• “‘Policy hasn’t been restrictive for very long … so we believe there’s more restriction coming,’ Powell said during a panel discussion with other central bankers at the European Central Bank’s annual symposium in Sintra, Portugal.”
• Core inflation will probably not reach the Fed’s target of 2% until 2025, Powell added.

The background: While central banks throughout the world have increased interest rates quickly in the past year in an effort to control inflation, they “have been astonished so far at the resilience of their economies to higher borrowing costs.”

• Earlier this month, the European Central Bank raised its rates a quarter percentage point. Last week, the Bank of England raised its key interest rate by a relatively aggressive half percentage point, citing a resilient economy, tight labor market and large pay increases for workers.
• At its meeting earlier this month, the Fed left the benchmark federal-funds rate at 5% to 5.25%, following 10 consecutive rate increases at prior meetings.

What it means: “Slowing down rate increases, including by possibly raising rates at every other meeting, represents an ‘effort to get more information from the data to see how much restraint is really coming,’ [Powell] said.”

What’s next: Most central banks—including the Bank of England—will probably raise rates again in the near future, according to the Journal.

With the backing of major HVAC manufacturers, start-ups are working to make air conditioners that are capable of easing the strain on the power grid, according to (subscription).

What’s going on: “Companies such as Blue Frontier, Transaera and Montana Technologies are raising money from investors including industry giant Carrier Global … to develop more efficient technologies. Many of those efforts focus on the humidity rather than the heat, using new materials like liquid salt to dry out the air.”

Why it’s important: The number of air conditioners in use worldwide is expected to more than double by the middle of the century, to 5.5 billion, with many units likely to be inefficient.

• “Stalwarts such as Carrier and Trane Technologies say they are spending billions of dollars to offer more efficient versions of conventional ACs while evaluating the new approaches.”

A different AC unit: Traditional air-conditioning units work by converting refrigerants from gas to liquid and then back again, while circulating air with fans. They are unable to remove humidity without cooling the air, which is what makes them inefficient, according to the article.�� ��

• “Blue Frontier aims to separate humidity and temperature control using a liquid salt solution that was developed with the National Renewable Energy Laboratory. The solution also stores energy, reducing consumption at peak times, when electricity grids are strained on hot days.
• Innovation is also required to make air conditioning affordable for people in developing nations, according to the Journal.

More investment: “The need for new approaches is pushing Carrier to make venture investments to complement its other growth strategies, said Jennifer Anderson, Carrier’s chief sustainability officer. Trane is investing in startups like data-center-cooling company LiquidStack while looking at new technology approaches, CEO Dave Regnery said.”

Consumer confidence hit its highest level in nearly a year-and-a-half in June, (subscription) reports.

What’s going on: “The Conference Board said its consumer confidence index rose to 109.7 this month, the highest reading since January 2022, from 102.5 in May. Economists polled by Reuters had expected the index to climb to 104.0.”

On jobs: The survey’s labor market differential, which comes from respondent views on the difficulty of getting jobs, increased to 34.4 in June from 30.7 in May—a sign that many still view the labor market as tight.

• This finding is in keeping with a key data point in the 51�Թ���’s , in which the majority (74.4%) of manufacturers cited attracting and retaining a quality workforce as a top challenge.

What we’re saying: The latest consumer confidence index is good news, according to 51�Թ��� Chief Economist Chad Moutray.

• “Americans felt more upbeat in their assessments of both current and future conditions, with improved prospects for jobs and a strengthened overall economic outlook, including for household finances,” he said.

In other good news: Sales of new homes increased to a 15-month high in May, up 20% from a year ago, bolstering hopes that the U.S. economy might avoid a recession.

More than $42��billion will be given to states to expand their broadband internet access, the White House announced this week, according to (subscription).

What’s going on: “States and territories have been jockeying for months for their share of $42.5��billion allocated in an internet-construction fund called the Broadband Equity Access and Deployment program. The law requires that federal agencies use a new, more accurate map of where high-speed internet service is missing before disbursing the funds.”

• Texas will get the most money under the project ($3.3��billion) followed by California ($1.9��billion). Also set to receive significant sums are the less-populous Alaska, West Virginia and Montana.

The goal: The effort is meant to connect everyone in the U.S. to “affordable, high-speed internet service by 2030,” according to the Journal.

Why it’s important: Approximately 8.5��million U.S. households and businesses are located in areas of the country without access to high-speed internet access, which the Biden administration called “a necessity in today’s society” in an about the funds.

• BEAD is one of six federal internet-construction programs authorized by the 51�Թ���-backed bipartisan infrastructure law of 2021.
• The legislation also includes $2.75��billion for digital equity and inclusion and $2��billion in loans and grants for internet infrastructure in rural locations, reports.

Our view: “Manufacturers supported the bipartisan infrastructure law, and today’s historic broadband investment announcement will enhance industry operations through leading edge connectivity,” the 51�Թ��� on Monday. “Thank you @POTUS��for your leadership to advance domestic [manufacturing] priorities.”

A natural gas pipeline that would bring affordable energy to customers in the Mid- and South Atlantic regions of the U.S. got its final permit late last week, according to E&E News’ (subscription).

What’s going on: On Friday the planned 303-mile Mountain Valley Pipeline—set to run from West Virginia to southern Virginia—received its water crossing permit, which will allow developers to build the project across rivers and streams in accordance with Section 404 of the Clean Water Act.

• The permit was part of the debt-ceiling deal signed earlier this month by President Biden
• Construction of the MVP, the only large pipeline project currently being built in Appalachia, has been paused for more than a year because of legal battles, according to another (subscription) story.

Why it’s important: The granting of the water crossing permit—which comes more than five years after the pipeline’s initial approval—is a step forward for permitting reform.

• The approvals process for critical infrastructure in the U.S. takes far longer than it does in other countries that have comparable environmental regulations, 51�Թ��� Vice President of Energy & Resources Policy Brandon Farris at a recent hearing.
• This lag needlessly delays—or worse, drives overseas—critical infrastructure, Farris said.

Manufacturers act: Last week the 51�Թ���, along with members of the 51�Թ���’s Council of Manufacturing Associations and Conference of State Manufacturers Associations, launched , a coalition aimed at speeding up the�� permitting process and addressing the large volume of regulations being handed down by the federal government.

What’s next for MVP: The MVP has approximately four to five months of construction remaining. It could begin service this year or in early 2024, according to one estimate.

• To finish construction, the project will require the permission of the Federal Energy Regulatory Commission, which “must still validate that the project has all their permits,” ENERGYWIRE reports.

Businesses “that provide tools, chemicals and other supplies for the semiconductor industry” may now apply for a piece of the funds set aside in last year’s CHIPS and Science Act, according to (subscription).

What’s going on: Late last week, the Biden administration announced broadened eligibility for companies capable of using federal subsidies to increase chip production in the U.S.

• Last year’s legislation, which the 51�Թ��� championed, earmarked $39 billion for the purpose.
• In February, the Commerce Department’s CHIPS Program Office began “accept[ing] applications for the construction, expansion, or modernization of semiconductor materials and manufacturing equipment facilities for which the total capital investment equals or exceeds $300 million,” according to��the , which is part of Commerce.

Why it’s important: “‘We can have as many fabs [chip plants] as we want, but the reality is, we also need the supply chain—the chemicals, the material, the tools that go into those fabs,’ Commerce Secretary Gina Raimondo said at a briefing,” according to the Journal.

Lots of interest: Nearly 400 businesses across 37 states have signaled their interest in receiving funds under this latest phase.

• “The department is already accepting full applications for the C[HIPS] Act funding from companies with plans to build facilities for leading-edge semiconductors, and will soon accept submissions from companies that plan to build chips that are currently state-of-the-art or older.”
• Suppliers may begin submitting applications this fall, but the administration has not yet said when the funds will be disbursed.

Companies that provide services and goods to the oil and gas sector are repurposing some of their machinery for use in renewable energy technologies, according to (subscription).

What’s going on: With investment in renewable energy sources expected to reach $1.74 trillion this year, oil-field-service firms including Baker Hughes are diversifying their portfolios to include investment in new energy segments.

• “Baker Hughes said orders in its new energy segment could reach $6 billion to $7 billion by 2030. At the midpoint, that represents about a fifth of the revenue that Wall Street expects it to generate that year.”
• In addition to maintaining its longstanding book of geothermal business, Baker Hughes is now “looking to do carbon capture and sequestration, which … requires geological knowledge” that the firm already has.

Making progress: “Orders in its new energy business were substantial enough to be noted on [the company’s] earnings calls. It booked more than $400 million of orders in the segment last year and said it is on track to exceed that amount this year.”

• Orders comprised carbon capture and sequestration equipment for a large Malaysia project.
• Some of the services can be a source of recurring revenue, as in the case of California direct air capture projects, which are required to monitor carbon dioxide levels underground for 100 years.

Sales of existing homes inched up in May, according to the .

What’s going on: Existing home sales increased to 4.30 million units from 4.29 million units in April.

• Sales strengthened in the South and West but weakened in the Midwest and Northeast.
• The median sales price for existing homes was $396,100 in May, a decrease of 3.1% from a year ago.

By housing type: Single-family house sales edged down 0.3%, to 3.85 million units from April’s 3.86 million units.

• Meanwhile, sales of condominiums and co-ops increased 4.7%, to 450,000 units from 430,000 in April.

Unsold homes: The unsold inventory of existing homes on the market rose to 3.0 months from 2.9 in April but stayed near historic lows.

Overall: Home sales have declined 20.4% on a year-over-year basis, from 5.40 million units last May.

The 51�Թ���’s take: “The existing home market remained challenged by affordability and lack of inventory, although sales remained higher than the 4.00 million units in January,” said 51�Թ��� Chief Economist Chad Moutray.
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