Global supply chains that ran efficiently for years broke down as factories, ports and freight yards buckled under the weight of surging orders.
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But the governments of the wealthiest nations, scarred by the achingly slow recovery from the financial crisis just over a decade earlier, poured money into rescuing their economies. The United States was particularly aggressive: It supplied $5 trillion in COVID-related stimulus aid to individuals, businesses and municipalities this year and last.
Beginning earlier this year, vaccines accelerated the return to something much closer to ordinary pre-pandemic life. Capital Economics calculates that households in advanced economies like the United States and the European Union were holding “excess savings’' at mid-year of $3.7 trillion — the amount above what they would likely have saved if the pandemic had never happened.Robust demand, especially for autos, appliances and other physical goods, overwhelmed global manufacturers. Factories couldn’t obtain enough raw materials and parts. Ports and freight yards were swamped.
[Most read] The Chicago Bears took a late lead — and finally kept it. Brad Biggs’ 10 thoughts after Nick Foles’ rally in the 25-24 win over the Seattle Seahawks in Week 16.Across the Atlantic, MTA, an auto components manufacturer that endured Italy’s first lockdown in February 2020, reopened within a week and ended 2020 with unexpectedly healthy business. But the recovery bred new troubles.“Plastic is lacking. Metals are lacking. Paper is lacking. Microchips — don’t even mention.
“The sharp rise in sea freight has eaten into manufacturers’ profits and ours,” said Max Chen, general manager of Makefigure Co., a toy exporter in the southern Chinese city of Shenzhen. “If we want to stay in the business, we need to lower our profit expectations and develop new clients.” Inflationary pressures were especially intense in the United States. In addition to energy, some of the largest cost spikes were for such necessities as food, housing, autos and clothing — goods and services that millions of Americans regularly depend upon. Especially hard hit were lower-income households with little or no cash cushions. Last month, U.S. consumer prices shot up 6.8% from 12 months earlier — the biggest year-over-year increase since 1982.
“We still have to do what we have to do to survive,” Ray Khoury, a hospital administrator, said as he filled up a Mercedes at a BP station in Yonkers. “The everyday needs of your families, your kids — it trickles down. Forget about savings. Savings are shot.”Even while absorbing higher prices, workers, especially in America, were benefiting from a tighter labor market that gave them leverage to secure better pay and benefits.
Keeping European workers on company payrolls, he noted, made it “much more seamless to reopen the economies in Europe because basically people just went back to their old job.’’Workers in some cases gained a rare upper hand in negotiations over wages and working conditions.
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Despite supply issues and omicron, holiday sales rise 8.5%Holiday sales rose at the fastest pace in 17 years, even as shoppers grappled with higher prices, product shortages and a raging new COVID-19 variant in the last few weeks of the season, according to one spending measure.
Les mer »
Despite supply issues and omicron, holiday sales rise 8.5%Holiday sales rose at the fastest pace in 17 years, even as shoppers grappled with higher prices, product shortages and a raging new COVID-19 variant in the last few weeks of the season, according to one spending measure
Les mer »
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