Container ships (Top R) are anchored by the ports of Long Beach and Los Angeles as they wait to offload on September 20, 2021 near Los Angeles, California.


“Supply-chain headaches show no sign of subsiding just yet,” Moody’s economists led by Matt Colyar wrote in a Tuesday report.
About 200,000 shipping containers, holding the whole lot from toys and sneakers to crucial components for factories, stay caught on ships floating off the coast of Los Angeles. A record 100 cargo vessels, from barges to container ships, are anchored outdoors the Ports of Los Angeles and Long Beach.

Transportation Secretary Pete Buttigieg acknowledged Wednesday that regardless of the Biden administration’s efforts to handle bottlenecks, it’ll take time to get provide chains again to regular.

“There are going to be disruptions and shocks to the system as long as the pandemic continues,” Buttigieg advised CNN’s Jim Sciutto.

‘There are not any shiny spots’

To measure the logistical strains impacting the economic system, Moody’s not too long ago created a US provide chain stress index that’s made up of varied metrics for manufacturing, stock and transportation. That index climbed to 135.9 in August, in contrast with pre-pandemic ranges of about 100.

Moody’s mentioned early indicators level to a different improve within the provide chain stress index for September, pushed by the additional value will increase.

“Stress in US supply chains isn’t abating,” the economists wrote.

Storage containers are scarce, so toymakers are focused on small, squishy toys for the holidays

In an interview, Colyar mentioned not one of the underlying metrics are displaying enchancment at this level.

“Everything is moving in the wrong direction,” he mentioned. “There are no bright spots,”

Supply chain stress is slowing the economic system

The logistics nightmare is posing an actual impediment for the financial restoration from Covid-19.

Hurt by a scarcity of supplies and staff, US industrial manufacturing unexpectedly fell in September, in keeping with the Federal Reserve. Industrial manufacturing measures the whole lot from manufacturing and mining to electrical and fuel utilities.

Moody’s warned that “sand in the gears” of the worldwide economic system may trigger the US economic system to develop extra slowly than beforehand forecast.

Indeed, there’s a threat that the US economic system barely grew in any respect within the third quarter, which led to September.

The Atlanta Federal Reserve’s GDPNow model was downgraded on Tuesday to challenge GDP grew at an annualized tempo of simply 0.6% within the third quarter.

That’s down sharply from a name for GDP development of 1.2% as not too long ago as final week, and practically 4% final month.

White House explores deploying the National Guard to ease supply chain crisis but is unlikely to use this option

Wall Street economists, nevertheless, are rather more optimistic and are calling for GDP development of just about 4% — though that is down from forecasts over the summer time.

At the identical time, Moody’s warned the provision chain stress threatens to maintain inflation elevated. Consumer costs rose 5.4% in September, tied for the fastest 12-month increase since 2008. Price spikes are extra extreme on the whole lot from used vehicles and bacon to youngsters’s sneakers.
Procter & Gamble (PG), the nation’s largest shopper items maker, mentioned Tuesday it’ll raise prices on grooming, beauty and oral care products. According to 1 distributor, P&G despatched an electronic mail, obtained by CNN Business, that signifies it might elevate costs on some Olay moisturizers by as much as 20%, choose Crest and Oral-B mouthwashes by as much as 32% and battery powered toothbrushes by as a lot as 20%.

CNN’s Nathaniel Meyersohn contributed to this report

Leave a Reply

Your email address will not be published. Required fields are marked *