Delays and price hikes are expected in the United States for holiday goods, a Federal Reserve official warned on Sunday, calling for more to be done to stimulate the workforce.
“Right now we’re seeing consumers trying to get out early and spend their money on getting their products before they run out,” Mary Daly, director of the US central bank’s San Francisco branch, told CBS. .
When shopping for the upcoming vacation, “people buy it now and are often told that they can only get it after the vacation is over,” she said.
Federal Reserve Bank of San Francisco President Mary Daly discussed the economy and vacation spending on Sunday on “Face the Nation.”
The sudden acceleration in the reopening of the economy is straining the cross-border supply chains that keep factories open and shelves stocked. In the photo, container ships sit off the Long Beach / Los Angeles port complex in Long Beach
“So there are going to be delays,” as well as “some pressure on the prices of holiday items,” the Fed official said.
To remedy this, it will be necessary “to increase the supply on the labor market, on the goods market”.
In other words, to speed up the flow and production of goods, people who have left the labor market due to the coronavirus pandemic and who can no longer return due to constraints such as childcare or health problems, must be able to return to work.
The US labor market, which rebounded strongly in June and July, adding more than a million jobs each month, slowed in August and September.
In September, only 194,000 jobs were created.
Delays and price hikes are expected in the United States for holiday goods, a Federal Reserve official warned on Sunday, including those toys seen at a holiday showcase last month.
The billion-dollar backlog of toys, clothing, electronics, vehicles and furniture came amid the 2020 outbreaks caused by COVID.
The United States has since largely returned to normal life – but the demand for goods has increased as people get used to returning to normal.
Americans who were able to save money during COVID lockdowns are now splashing the money, with increased demand more credited with rising prices.
The trillions of dollars in COVID relief printed to help people become unemployed by the pandemic has also been blamed for inflation.
Supply chains are far behind consumer demand due to a lack of manpower at U.S. ports and restrictions linked to the COVID-19 outbreak early last year. These constraints, which include social distancing and mandatory quarantines, have severely limited the number and ability of port workers to do their jobs.
“The global infrastructure was not designed to handle goods at such a rate,” a logistics expert, who asked not to be named, told DailyMail.com.
“Supply chains are the artery that feeds our entire ecosystem. The government must step in to stop this crisis immediately, or face rising inflation and unemployment, and an economic crisis – or face the end of world trade.
“It’s a volatile time that we find ourselves in right now, Covid is not behind us so I don’t expect the job market to be just continuous,” Daly said.
“There are going to be these ups and downs, especially with the Delta variant,” she added, referring to the variant of the coronavirus that has spurred recent spikes in cases.
The Fed has said it wants to start cutting back on its asset purchases, which have supported the United States during the pandemic, but it wants to see progress in the job market before announcing the exact timeline.
Most economists believe that disappointing job creation in September, however, should not be an obstacle to announcing tapering at the next central bank meeting in November.
The Federal Reserve has said it wants to start cutting back on its asset purchases, which have supported the United States during the pandemic, but wants to see progress in the job market before announcing the exact timeline.