Welcome to the first C-MACC macro blog. These will be less frequent than our industry and ESG blogs, and we will only publish when we feel we are making more sense than, or at least as much sense as everyone else.
Our Christmas Tree shortage comments a couple of weeks ago were a little tongue in cheek, but we thought it made sense at the time. With the White House now warning of shortages around the holidays we may now have a self-fulfilling prophecy, as consumers will now buy early and likely over-buy, and if there was not a shortage before there will be now! See our report from ten days ago - Deck The Halls With Less Than Last Year, Fa La La La La La La La!. Also, note what happened with UK gasoline this month.
In the meantime, the warning flags are up all over Europe and the US around trucking availability – and operating the Port of LA 24/7 will not make a difference if there is no more capacity to move the containers on trucks from the docks. On both sides of the Atlantic, we are seeing food price inflation and the inability to move more food by truck will only make it worse for consumers and for restaurants, many of whom are already having to raise wages to find and keep staff. As someone who is old enough to remember what it was like to live through the inflation of the 70s all we can add is “lookout”. As labor shortages increase in pockets of the economy – organized labor will see an opportunity to bargain for more pay and benefits – this could lead to strikes and further inflation triggers. Yes, Halloween is approaching and C-MACC is preaching a little bit of doom and gloom!!
Source: Baltic Exchange, Bloomberg, C-MACC Analysis, October 2021
