{"id":56605,"date":"2021-02-02T07:39:19","date_gmt":"2021-02-02T12:39:19","guid":{"rendered":"https:\/\/olduvai.ca\/?p=56605"},"modified":"2021-02-02T07:39:19","modified_gmt":"2021-02-02T12:39:19","slug":"inflation-galore-at-manufactures-amid-massive-shifts-in-demand-supply-chain-snags-shortages-lack-of-shipping-capacity-and-theyre-passing-it-on","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=56605","title":{"rendered":"Inflation Galore at Manufactures, amid Massive Shifts in Demand, Supply-Chain Snags, Shortages, Lack of Shipping Capacity. And They\u2019re Passing it On"},"content":{"rendered":"
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Inflation Galore at Manufactures, amid Massive Shifts in Demand, Supply-Chain Snags, Shortages, Lack of Shipping Capacity. And They\u2019re Passing it On<\/a><\/h3>\n<\/header>\n
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For now, the story is that it\u2019s just temporary.<\/strong><\/p>\n

For now, the story is that the sudden and massive shifts in the economy in 2020 have caused shortages and distortions in the goods-producing sectors and in shipping and trucking, as consumer spending has shifted from services \u2013 such as flying somewhere for vacation and spending oodles of money on lodging and restaurants and theme parks \u2013 to goods, particularly durable goods.<\/p>\n

The story is that prices are rising because components and commodities are in short supply, and supply chains are dogged by production issues, and are facing transportation constraints, as demand for those goods has suddenly surged. And that all this is temporary.<\/p>\n

And the Fed has said it will ignore inflation for a while, that it will allow it to overshoot, and only when it overshoots persistently for some unknown amount of time and becomes \u201cunwelcome\u201d inflation \u2013 \u201cunwelcome\u201d for the Fed \u2013 that it will try to tamp down on it.<\/p>\n

Meanwhile, inflation pressures are building up. Two reports out today show a large-scale surge in price pressures for manufacturers \u2013 and they\u2019re able to pass them on to their customers.<\/p>\n

The Prices Index \u201csurged dramatically in January\u201d to a level of 82.1%, after an eight-month upward trajectory, the highest since April 2011, \u201cindicating continued supplier pricing power,\u201d said the\u00a0Manufacturing ISM Report On Business<\/a>.<\/p>\n

In the ISM data, a value above 50 means expansion, and a value below 50 means contraction. The higher the value is above 50, the faster the expansion. January saw the fastest expansion of the Prices Index since April 2011 (data via\u00a0YCharts<\/a>):<\/p>\n

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\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Inflation Galore at Manufactures, amid Massive Shifts in Demand, Supply-Chain Snags, Shortages, Lack of Shipping Capacity. And They\u2019re Passing it On For now, the story is that it\u2019s just temporary. For now, the story is that the sudden and massive shifts in the economy in 2020 have caused shortages and distortions in the goods-producing sectors […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[426,30894,1427,3237,4254,4255],"class_list":["post-56605","post","type-post","status-publish","format-standard","hentry","category-economics","tag-inflation","tag-shipping-capacity","tag-supply-and-demand","tag-supply-chains","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56605","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=56605"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56605\/revisions"}],"predecessor-version":[{"id":56606,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56605\/revisions\/56606"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=56605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=56605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=56605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}