A look into how supply chain issues translate into 2022 inflation
Last year was plagued with issues such as backed-up shipping ports, worker shortages, and rising costs continuing to disrupt the supply chain and create a lot of extra shopping complications for consumers and retailers.
Many are anxious about the higher prices as inflation impacts us all. The consumer-price index, a measure of the price of goods and services from groceries to cars, jumped 7% for the 12 months ending December, according to the U.S. Bureau of Labor Statistics (BLS), the largest 12-month increase since the period ending June 1982.
The Federal Reserve indicated in their recent news conference they believe the work force will return and inflation will decline. Their new economic projections are for inflation to be at 2.6% in 2022 and then to fall to 2.3% in 2023. And unemployment is seen dropping to 3.5% in 2022. The Fed plans on backing away from their pandemic monetary stimulus for the economy.
According to DAT Freight & Analytics, 2021 did not fare well in the freight market; from purchasing trucks and equipment to empty shelves. Access to new or used trucks has been very limited and even repairs to trucks have been backed up. Recent data from DAT shows the cost of used trucks nearly doubling in 2021, contract rates escalating, and the supply chain issues continuing to keep shelves bare. Access to rail freight and is also costing more and shipping containers are at an all-time high. Thankfully, it is not all doom and gloom. We are hopeful that The Federal Reserve’s positive economic projections are accurate.