Some positive news for US supply chain
In response to client demand, we introduce our new US supply chain indicator which provides perspective on supply chain conditions since 2011. This index incorporates more than 30 real and survey datapoints covering logistics, the labor market, inflation, inventories, and activity conditions from government and private-sector data sources, constructed using a principal components approach. Our new index points to slightly less stress last month. However, stress overall remained extremely high compared to the past 11 years.
What you will learn:
- The number of cargo ships waiting to unload at LA and Long Beach was down for the fourth consecutive month. China’s zero-Covid policy partly underpinned reduced backlogs, and moderating goods demand also gave shippers more breathing room. Lower shipment volumes via other modes of transportation corroborate less logistics stress.
- Goods and services prices climbed more slowly last month. Commodities prices fell 10% on average, with metals leading the way lower, offering some reprieve for production costs. We may be past inflation’s peak, but price pressures won’t diminish swiftly.
- Domestic activity continued to advance in May, offering assurance the economy hasn’t tipped into recession. Inventories rose, and while some businesses may moderate their pace of stockpiling (namely retailers), inventories will continue increasing at the national level.
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