The Econmist - USA (2021-11-06)

TheEconomistNovember6th 2021 63

Finance & economics

America’seconomy

Inner strength

M

anagers athub group,  a  transport
company,  used  to  be  able  to  click  a
few  buttons  at  their  headquarters  in  Illi­
nois  and,  eight  weeks  later,  receive  a  new
shipping  container  from  China,  ready  for
use  in  America.  Recently,  though,  Phillip
Yeager,  the  firm’s  president,  faced  a  head­
ache.  After  a  long  wait  at  the  congested
port of Long Beach, its container was at last
next  in  line  to  go  ashore.  But the  ship  in
front did not have a chassis for moving its
freight and was blocking the landing berth.
Mr Yeager’s team scrambled to find a chas­
sis for it. Only then could Hub get its con­
tainer, a full month late.
Multiply  by  thousands  of  containers,
and  the  tale  helps  explain  how  supply
chains have become so snarled, particular­
ly in America, the world’s biggest consum­
er market. And this is just one of the cross­
cutting  forces  buffeting  the  economy.  De­
mand  for  goods  is  incredibly  strong,  but
companies  are  struggling  to  find  workers
and supplies, which in turn is pushing up
wages and prices, all against a backdrop in
which the pandemic—the original cause of

the distortions—isfading but notgone.

Andofficials,poisedtowithdrawtheex­

traordinaryfiscalandmonetarystimulus

ofthepast 18 months,arethrowinganoth­

erelementintothefray.Attheendofits

policymeetingonNovember3rd,theFed­

eralReservesaidthatitwouldstartparing

backits$120bnmonthlybond­buyingpro­

gramme, puttingitontracktohaltallpur­

chasesbyJunenextyear.

Allthismakesfora volatilemix,aswas

illustratedbythird­quartergdp, published

onOctober28th.Theeconomygrewatan

annualrateof2%comparedwiththeprevi­

ous three months. That, depending on

yourframeofreference,waseithermost

impressive or very disappointing. Com­

paredwithforecasts madeinlate2020,

growthduringthefirstthreequartersof

thisyearhasbeenmorethana thirdfaster

thanprojected.Butforecastshadzoomed

highersince:atonepointeconomistsex­

pected third­quarter growth to be more

thanthreetimesasfastasit actuallywas.

Thefourthquartermaybringa bounce­

back. Consumerconfidence fellprecipi­

touslyasthesummerworeonandtheDel­

tavarianttookhold.NowDeltaisreceding

andconfidencerebounding,whichbodes

wellforshoppingandtravellingduringthe

holidayseason.Supplychains,thoughstill

farfromnormal,maybeimprovinga bit.

MrYeagertalksofbetter“networkfluidity”,

with more trains arriving on time and

warehousesrunningmoreefficiently.An­

alysts at Bank of America reckon that

growthcouldpickuptoanannualrateof

6%overthefinalthreemonthsoftheyear.

Anynear­termreboundaside,however,

howmuchlongerbeforetherecoveryruns

outofair?Threebigfactorssuggestthatit

maybenearingitsend:a tightlabourmar­

ket,stubbornlyhighinflationanda rapid

WASHINGTON, DC
Despite supply snarls, inflation and stimuluswithdrawal,theeconomy
is still in high gear

→Alsointhissection

64 Bondmarketsv centralbanks

65 Highinflation—acautionarytale

66 ThescrambleforAfricanfintech

67 Buttonwood:Lessonsfromphysics

68 Freeexchange:Greedyjobs

Making quick work

United States, unemployment rate

before and after selected recessions, %

Source:HaverAnalytics

1

15

12

9

6

3

0

8642024

Quartersbefore/after end of recession

Covid-19

2007-09

2001

1990-91

191-2

End of recession