Inflation Surge to Add Pressure to Global Prices
In the U.S., materials shortages, shipping bottlenecks and hiring difficulties will likely continue to put broader upward pressure on prices in the months ahead. Importers there and in Europe were already faced with historically high shipping costs to move the record amounts of goods they’re buying from China, and this faster factory inflation will boost their costs just as they stock up for the holiday season.
China’s exports to the U.S. through the end of August are up by a third compared with 2020, as the boost to U.S. demand from stimulus and recovery combines with rising commodity costs and faster factory prices in China to drive up the value of goods trade. In addition to that, shipping costs have soared due to container shortages, shuttered ports, Covid outbreaks and other factors, adding to the cost of moving goods from China to the U.S. or elsewhere.
The rally in commodity prices has been a major driver of factory-gate inflation this year. The Chinese government’s targeted steps to curb the rapid gains, such as boosting supplies and attempting to cutting back on hoarding, But have had limited effect so far.
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