Prices of household goods, clothing, vehicles and other items showed signs of cooling in March, as companies built up additional inventory of products in storerooms and warehouses and reduced deficits.
The monthly price growth rate in a basket of key products has slowed to 0.4 percent in March from a growth rate of 1 percent in recent months.
Prices of used cars and trucks fell 3.8 percent in March from a month earlier, and new cars and trucks rose 0.2 percent. Prices of household furniture and supplies rose 1 percent in March, the eighth consecutive monthly increase in this category.
But disruptions in supply chains are showing signs of worsening, suggesting that American consumers may see further shortages of products such as electronics – and potentially renewed price increases – in the coming months.
In particular, massive lockdowns in China in an attempt to stamp out the omicron variant of the coronavirus have created new risks for the supply of American manufacturing components and finished products. Although China has tried to keep its ports operational through the epidemic, restrictions on truck drivers have hampered the flow of electronics, car parts and other goods out of the country.
Arian Curtis, global economist at Capital Economics, said in a note last week that in emerging markets, “new deficits – especially in electrical goods – and higher shipping costs could keep product inflation longer than we expected.”
Freight rates have dropped slightly in recent weeks, but they remain much higher than before the epidemic. The cost of shipping a 40-foot container from China to the west coast of the United States was $ 15,817 as of Friday, up from $ 5,893 a year ago and $ 1,584 at the same time in 2019, according to Freights, a freighter. Tracking firm.
Umair Sharif, president of the research firm Inflation Insights, said it was impossible to accurately predict how long China’s lockdown would disrupt the global supply chain and what the impact of their inflation would be. But companies have recently made progress in creating badly-expanded inventories before the epidemic, he said, and these additional products will help mitigate the effects of inflation.
Consumers also seem to be reducing their spending on products, possibly to reduce high food and petrol prices, Mr Sharif said.
“People are falling behind elsewhere due to inflation and high prices, so warehouses are starting to accumulate somewhat,” he said. “With inventories we are definitely in a better position to handle the slowdown without a big knock-on effect on inflation.”
Some car industry experts say inventory improvement in used cars may be partly a seasonal trend and new car prices may be restrained as manufacturers are cracking down on dealers who list prices higher.
Phil Levy, chief economist at Flexport, a logistics company, said there was “grave concern in the logistics industry that companies had overstated orders, accumulating excess inventory” and would return.
“The crystal ball is unusually cloudy at the moment,” Mr Levy said.