Price pressures on household goods, clothing, vehicles and other items showed signs of easing in March as businesses built up additional inventories of products in stores and warehouses and shortages eased.
The monthly rise in prices for a basket of basic goods stabilized, falling from a growth rate of 1% in recent months to a decline of 0.4% in March.
The price of used cars and trucks fell 3.8% in March from the previous month, and the price of new cars and trucks rose 0.2%. The price of home furnishings and supplies rose 1% in March, the eighth consecutive monthly increase in this category.
But the disruptions that have affected supply chains continue to show signs of worsening, suggesting that American consumers could see more shortages of goods like electronics – and potentially further price hikes – in the months to come. .
In particular, sweeping lockdowns in China in an attempt to eradicate the Omicron variant of the coronavirus have posed new risks to the US supply of manufacturing components and finished goods. Although China has tried to keep its ports operating during the pandemic, restrictions on truckers have stemmed the flow of electronics, auto parts and other goods out of the country.
Ariane Curtis, global economist at Capital Economics, said in a note last week that, in developed markets, “further shortages – especially of electrical goods – and higher shipping costs could keep goods inflation going. longer than expected.”
Freight rates have fallen slightly in recent weeks, but they remain much higher than they were before the pandemic. The price to ship a 40ft container from China to the West Coast of the United States was $15,817 on Friday, down from $5,893 a year ago and $1,584 at the same time in 2019, data shows. of Freightos, a freight-tracking company.
Omair Sharif, chairman of research firm Inflation Insights, said it was impossible to accurately predict how long Chinese lockdowns might continue to disrupt global supply chains and therefore what their inflationary impact would be. But businesses have recently made progress in building up inventory that had been in high demand at the start of the pandemic, he said, and those excess assets will help cushion the inflationary impact.
Consumers also appear to be reducing their spending on goods, likely to offset rising food and gasoline prices, Sharif said.
“People are shrinking because of inflation and high prices elsewhere, so things are starting to pile up a bit in the warehouses,” he said. “With stocks, we are definitely in a better position to handle a downturn without a big knock-on effect on inflation.”
Some auto industry experts said the improvement in used-car inventories may be partly a seasonal trend and that new-car prices may have moderated as automakers have cracked down on charging dealers. higher prices than listed.
Phil Levy, chief economist at logistics firm Flexport, said there was “tremendous concern within the logistics industry that companies have overrun orders, are building up excess inventory” and will pull out . But inflation forecasts are complex, he said, because much of what happens will depend on consumer demand.
“The crystal ball is unusually cloudy right now,” Mr. Levy said.