Although the pandemic lit the match, the United States has been setting this bonfire of supply chain failures for years. The government has significantly reduced investment in manufacturing, scuttled the postal service and indulged in petty trade wars that made the pandemic era particularly painful for consumers.
groping mail: The US Postal Service is a hot mess right now – low on funding and workers, and burdened by a pandemic-era influx of packages.
Manufacturing Crisis: Washington also has to share the blame in America’s dependence on global supply chains.
For decades, America has been innovating at home and manufacturing abroad, allowing high-level manufacturing (and the high-paying jobs that go with it) to disappear for all.
Take semiconductors, for example—those tiny bits of etched silicon that power nearly every aspect of modern life, from your car to your fridge, to the device you’re reading this on.
Commerce Secretary Gina Raimondo recently told Granthshala, “We haven’t really been investing long enough to cause this mess.” “We used to lead the world in semiconductor manufacturing and now we don’t. We just dived.”
According to the Semiconductor Industry Association, over the past three decades, the United States’ share of global semiconductor manufacturing has declined to just 12%—from 37% in 1990.
Meanwhile, competitors in Asia ramped up capacity, putting the United States at a “competitive disadvantage”, the trade group said. Although the Biden administration is pushing Congress to pass a $52 billion bill that would boost semiconductor production and research at home, the effect of any legislation (which has yet to be voted on in the House) would be years away. .
trade war: Just to complicate things even more, the United States is locked in a trade war with China. Just before the pandemic, the Trump administration imposed tariffs on more than $300 billion worth of goods. Instead of pressuring China to reform its trade practices, the tariffs have hurt American consumers and manufacturers who rely on Chinese-made materials (read: everyone). Treasury Secretary Janet Yellen has acknowledged as much, but the Biden administration has yet to act.
Bottom Line: Even if you’re not shopping for holiday gifts, the end of the year is looking like a slog because inflation is so high.
Winter utility bills are about another major drain on home finances as inflation creeps into almost every consumer product on the market. Prices of natural gas – a non-renewable fossil fuel that is the most common way to heat homes in the US – slide in fall and winter as the Northern Hemisphere.
That open fire over which you roast your chestnuts may be needed to double as a home heating system.
US jobs report
US consumer spending ticked higher in August, with data published last week suggesting the heatwave caused by the delta version of the coronavirus may be ending.
But another big test comes Friday, when the US government releases its jobs report for September.
This time around, analysts would expect a stronger performance. They will also keep a close eye on wage hikes, which can play into inflation.
Goldman Sachs said last week that low-wage workers are making “eye-popping” gains in their paychecks.
Monday: OPEC+ meeting; PepsiCo earnings; American factory orders
Tuesday: US trade balance data
Wednesday: EIA report on crude oil inventories; Constellation Brands and Levi Strauss Earnings
Thursday: US jobless claims; conagra earnings
Friday: US jobs report for September
Credit : www.cnn.com