Go Out to Eat to Help Fix the Economy’s Supply-Chain Problems

(Bloomberg) -- Economic growth is still very rapid, but as everyone knows, the U.S. economy remains beset with bottlenecks and shortages up and down the supply chain.

In a sign of how stressed things are: the Unfilled Orders component of the latest Philadelphia Fed Manufacturing Survey soared to its highest level since the early 1970s.

Other measures of price pressure show a similar size and scope.

So when does this all even out? How long does transitory last? On TV yesterday we spoke with Ryan Petersen, the CEO of the logistics firm Flexport, who we also had on our podcast recently.

Unfortunately, despite his role in helping companies manage their logistics, Ryan didn’t have any clear answers about when all this stress would end. But he did say that the key thing is that with the re-normalization of the economy, we should start to see pre-crisis consumption patterns start to re-emerge, which in theory would allow the overall supply chain to find its rhythm again.

Of course, for the last year, there’s been this huge increase in goods purchases at the expense of services. So really the answer lies in normalizing things. In other words, if people start to buy less stuff, and shift some more of their consumption to restaurants, movies and haircuts, that could help a little bit. (As long as these places can find employees.)

©2021 Bloomberg L.P.