{"id":57223,"date":"2021-03-23T09:19:36","date_gmt":"2021-03-23T14:19:36","guid":{"rendered":"https:\/\/olduvai.ca\/?p=57223"},"modified":"2021-03-23T09:19:36","modified_gmt":"2021-03-23T14:19:36","slug":"get-ready-for-some-serious-sticker-shock-very-soon-this-jump-in-inflation-wont-be-transient","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=57223","title":{"rendered":"“Get Ready For Some Serious Sticker Shock Very Soon: This Jump In Inflation Won’t Be Transient”"},"content":{"rendered":"
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“Get Ready For Some Serious Sticker Shock Very Soon: This Jump In Inflation Won’t Be Transient”<\/a><\/h3>\n<\/header>\n
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Semiconductor Costs Could Lead to a Shock This Fall<\/strong><\/p>\n

Consumer confidence is key to how people plan to spend. You can see it in the chart below. And as the chip shortage grows, expect the higher prices to begin showing up in products, which could dampen confidence and eventually stall consumer spending.<\/p>\n

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The recent surge in chip prices hasn\u2019t affected consumers, and stimulus has kept spending up while confidence has lagged. But that will soon change.\u00a0Manufacturers have been eating the increase costs and not passing them on to consumers. With chip prices expected to rise every quarter this year, many companies will be unable to keep swallowing it, especially those with tight margins.<\/strong><\/p>\n

Manufacturers order semiconductors six months in advance. The choke points along the supply chain driving up prices and creating shortages will come to a head in the third quarter, when the next orders to replace inventories are delivered, according to the founder of SouthBay Research\u00a0Andrew Zatlin.<\/p>\n

Automakers will struggle to hold the line.\u00a0At General Motors, for example, roughly 5% of the cost of goods sold is from semiconductors<\/strong>. The company has 11% margins, and a surge in chip prices will hit profits hard, according to Zatlin. And small business who sell to the likes of Amazon and Walmart with tight retail margins will be forced to raise prices even higher.<\/p>\n

The impact should only spread from there.\u00a0Which is why this jump in inflation won\u2019t be transient as the Fed hopes<\/strong>. Every manufacturer with tight margins will be forced to raise and maintain higher prices.\u00a0So get ready for some serious sticker shock very soon.<\/strong><\/p>\n

Bloomberg Markets Live , Vincent Cignarella, zerohedge, inflation, supply shortages, supply chains, price inflation<\/em><\/p>\n

 <\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Get Ready For Some Serious Sticker Shock Very Soon: This Jump In Inflation Won’t Be Transient” Semiconductor Costs Could Lead to a Shock This Fall Consumer confidence is key to how people plan to spend. You can see it in the chart below. And as the chip shortage grows, expect the higher prices to begin […]<\/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":[31065,426,13351,3237,11402,31066,4318],"class_list":["post-57223","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bloomberg-markets-live","tag-inflation","tag-price-inflation","tag-supply-chains","tag-supply-shortages","tag-vincent-cignarella","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57223","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=57223"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57223\/revisions"}],"predecessor-version":[{"id":57224,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57223\/revisions\/57224"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}