The New York Federal Reserve (NY Fed) released a report on March 6th, 2023 that showed supply chain pressures have returned to normal levels as of February. The NY Fed’s Survey of Consumer Expectations found that after experiencing an increase in input cost pressures during the first quarter, those pressures moderated towards the end of the period.
Also according to the NY Fed’s Survey Survey of Consumer Expectations, “Median one-year-ahead inflation expectations declined by 0.8 percentage point to 4.2 percent, according to the February Survey of Consumer Expectations. Three-year-ahead expectations remained at 2.7 percent, while the five-year-ahead measure increased by 0.1 percentage point to 2.6 percent. Labor market expectations improved, with unemployment expectations and perceived job loss risk decreasing and job finding expectations increasing. Expectations for voluntary job quits reached the highest level since the start of the pandemic.”
This news is crucial for businesses and consumers alike, as it means the prices of goods and services won’t rise, at least not due to disruptions in supply lines. In addition, companies can rest assured they will be able to receive materials from their suppliers when needed.
Reuters reports, “In a development that could also point to softening inflation, the New York Fed said its monthly Global Supply Chain Index fell to a reading of negative 0.26 in February, down from a revised 0.94 seen in January. The negative turn for February – which indicates pressures are below the index’s historic norm dating from 1998 – was the first since August 2019.”
In other words, despite a return to normal supply chain operations and an increase in input costs, consumers don’t anticipate an acceleration of prices for goods and services due to these effects. This could be due to a number of factors, including continued low demand as well as European economy delivery times.
The NY Fed’s report is good news overall, as it means businesses can continue their operations without disruption and consumers won’t face unexpected price increases thanks to fewer supply chain pressures. Going forward, it will be interesting to see if these trends continue and how they affect inflation and consumer prices.
At Alba, we keep our finger on the pulse of the supply chain so that we can keep our customers informed. Subscribe to our newsletter so you never miss a blog and reach out to our expert team today to learn how we can keep your cargo moving.
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