Consumer spending “will recover from the downward pressure, but because there are these negative factors, the question is how broad will that recovery be?” said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.

Japan’s prime minister, Fumio Kishida, has tried to offset the effects of price increases with large government subsidies for fuel and cash handouts for families with children. But Japanese consumers, wary of the pandemic’s economic effects, have largely been putting rounds of stimulus money into savings.

Japan’s growth is facing diverse challenges, but ultimately its recovery will depend on Covid, analysts said, a common refrain over the last two years.

While Japan has high vaccination rates and has performed better than most other wealthy countries at keeping the pandemic in check, the virus’s protean nature has made it difficult to predict its path. And that has made experts hesitant to commit to any forecasts about its future impact on global economies.

“The big risk is that corona starts to spread again,” said Naoyuki Shiraishi, an economist at the Japan Research Institute. “If a new variant appears, there will be new restrictions on activity, and that will suppress consumption.”

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New Supply Chain Risk: 22,000 Dockworkers Who May Soon Strike

In a world contending with no end of economic troubles, a fresh source of concern now looms: the prospect of a confrontation between union dockworkers and their employers at some of the most critical ports on earth.

The potential conflict centers on negotiations over a new contract for more than 22,000 union workers employed at 29 ports along the West Coast of the United States. Nearly three-fourths work at the twin ports of Long Beach and Los Angeles, the primary gateway for goods shipped to the United States from Asia, and a locus of problems afflicting the global supply chain.

The contract for the International Longshore and Warehouse Union expires at the end of June. For those whose livelihoods are tied to ports — truckers, logistics companies, retailers — July 1 marks the beginning of a period of grave uncertainty.

A labor impasse could worsen the floating traffic jams that have kept dozens of ships waiting in the Pacific before they can pull up to the docks. That could aggravate shortages and send already high prices for consumer goods soaring.

impacts of Russia’s invasion of Ukraine and as China imposes new Covid restrictions on industry.

The dockworkers have moved unprecedented volumes of cargo during the pandemic, even as at least two dozen succumbed to Covid-19, according to the union. They are aware that many of the shipping terminals in Southern California are controlled by global carriers that have been racking up record profits while sharply increasing cargo rates — a fact cited by President Biden in his recent State of the Union address as he promised a “crackdown” to alleviate inflation.

With ports now capturing attention in Washington, some within the shipping industry express confidence that negotiations will yield a deal absent a disruptive slowdown or strike.

“There’s too much at stake for both sides,” Mario Cordero, executive director of the Port of Long Beach, said during a recent interview in his office overlooking towering cranes and stacks of containers. “There’s an incentive because the nation is watching.”

Savannah, Ga.

“If they don’t come to a compromise, then freight will get permanently diverted to the East Coast,” Mr. Matinifar said.

Animating contract talks is the popular notion that the longshoremen are a privileged class within the supply chain, using the union to protect their ranks — a source of resentment among other workers.

“They treat us like we’re nobodies,” said Mr. Chilton, the truck driver. “The way they talk to us, they’re very rude.”

traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:

Union officials declined to discuss their objectives for a new contract.

Mr. McKenna, the maritime association chief executive, said the union had yet to outline demands while declining to engage in discussions before May.

He expected that the union would resist efforts to expand automation at the ports, a traditional point of contention. He said greater automation — such as adding self-driving vehicles and robotics to move cargo — was unavoidable in ports in dense urban places like Los Angeles. There, land is tight, so growth must come from increasing efficiency, rather than physically expanding.

The last time the I.L.W.U. contract expired, West Coast ports suffered months of debilitating disruptions — the source of enduring recriminations.

Terminal operators accused dockworkers of slowing operations to generate pressure for a deal. The union countered that employers were the ones creating problems.

Some dockworkers question whether terminal owners are sincerely seeking to speed up cargo handling, given that shipping rates have soared amid chaos at the ports.

Jaime Hipsher, 45, drives a so-called utility tractor rig — equipment used to move containers — at a pair of Southern California shipping terminals. One is operated by A.P. Moller-Maersk, a Danish conglomerate whose profits nearly tripled last year, reaching $24 billion.

She said maintenance of equipment was spotty, producing frequent breakdowns, while the terminals were often understaffed — two problems that could be fixed with more spending.

A Maersk spokesman, Tom Boyd, rejected that characterization.

“Freight rates have been impacted by the global Covid-19 recovery and the demand outpacing supply,” he said in an emailed statement. “Ships at anchor are not productive, nor are they earning revenue against a backdrop of large fixed costs.”

That Ms. Hipsher spends her nights on the docks represents an unexpected turn in her life.

Her father was a longshoreman. He urged her to attend college and do something that involved wearing business attire, in contrast to how he spent his working hours — climbing a skinny ladder to the top of ships and loading coal onto vessels.

“He would come home after work and he would have coal dust coming out of his ears, out of his nose,” Ms. Hipsher recalled. “His hands would just be completely black.”

But in 2004, when she was working as a hairstylist, her brother — also a longshoreman — suggested that she enter a lottery for the right to become a casual dockworker.

The ports had changed, her brother said. Growing numbers of women were employed.

Eighteen years later, Ms. Hipsher has gained the security of seniority, health benefits and a pension.

As contract talks approach, she pushes back against the notion that the union poses a threat to the global economy.

“You’re complaining about my wages, thinking that my wages are the source of inflation, and we don’t deserve it,” she said. “Well, look at the billions that the owners are making.”

Emily Steel contributed reporting.

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Supply Chain Woes Could Worsen as China Imposes Covid Lockdowns

WASHINGTON — Companies are bracing for another round of potentially debilitating supply chain disruptions as China, home to about a third of global manufacturing, imposes sweeping lockdowns in an attempt to keep the Omicron variant at bay.

The measures have already confined tens of millions of people to their homes in several Chinese cities and contributed to a suspension of connecting flights through Hong Kong from much of the world for the next month. At least 20 million people, or about 1.5 percent of China’s population, are in lockdown, mostly in the city of Xi’an in western China and in Henan Province in north-central China.

The country’s zero-tolerance policy has manufacturers — already on edge from spending the past two years dealing with crippling supply chain woes — worried about another round of shutdowns at Chinese factories and ports. Additional disruptions to the global supply chain would come at a particularly fraught moment for companies, which are struggling with rising prices for raw materials and shipping along with extended delivery times and worker shortages.

China used lockdowns, contact tracing and quarantines to halt the spread of the coronavirus nearly two years ago after its initial emergence in Wuhan. These tactics have been highly effective, but the extreme transmissibility of the Omicron variant poses the biggest test yet of China’s system.

Volkswagen and Toyota announced last week that they would temporarily suspend operations in Tianjin because of lockdowns.

Analysts warn that many industries could face disruptions in the flow of goods as China tries to stamp out any coronavirus infections ahead of the Winter Olympics, which will be held in Beijing next month. On Saturday, Beijing officials reported the city’s first case of the Omicron variant, prompting the authorities to lock down the infected person’s residential compound and workplace.

If extensive lockdowns become more widespread in China, their effects on supply chains could be felt across the United States. Major new disruptions could depress consumer confidence and exacerbate inflation, which is already at a 40-year high, posing challenges for the Biden administration and the Federal Reserve.

“Will the Chinese be able to control it or not I think is a really important question,” said Craig Allen, the president of the U.S.-China Business Council. “If they’re going to have to begin closing down port cities, you’re going to have additional supply chain disruptions.”

thrown the global delivery system out of whack. Transportation costs have skyrocketed, and ports and warehouses have experienced pileups of products waiting to be shipped or driven elsewhere while other parts of the supply chain are stymied by shortages.

For the 2021 holiday season, customers largely circumvented those challenges by ordering early. High shipping prices began to ease after the holiday rush, and some analysts speculated that next month’s Lunar New Year, when many Chinese factories will idle, might be a moment for ports, warehouses and trucking companies to catch up on moving backlogged orders and allow global supply chains to return to normal.

But the spread of the Omicron variant is foiling hopes for a fast recovery, highlighting not only how much America depends on Chinese goods, but also how fragile the supply chain remains within the United States.

American trucking companies and warehouses, already short of workers, are losing more of their employees to sickness and quarantines. Weather disruptions are leading to empty shelves in American supermarkets. Delivery times for products shipped from Chinese factories to the West Coast of the United States are as long as ever — stretching to a record high of 113 days in early January, according to Flexport, a logistics firm. That was up from fewer than 50 days at the beginning of 2019.

The Biden administration has undertaken a series of moves to try to alleviate bottlenecks both in the United States and abroad, including devoting $17 billion to improving American ports as part of the new infrastructure law. Major U.S. ports are handling more cargo than ever before and working through their backlog of containers — in part because ports have threatened additional fees for containers that sit too long in their yards.

Yet those greater efficiencies have been undercut by continuing problems at other stages of the supply chain, including a shortage of truckers and warehouse workers to move the goods to their final destination. A push to make the Port of Los Angeles operate 24/7, which was the centerpiece of the Biden administration’s efforts to address supply chain issues this fall, has still seen few trucks showing up for overnight pickups, according to port officials, and cargo ships are still waiting for weeks outside West Coast ports for their turn for a berth to dock in.

work slowdowns and shipping delays.

“If you have four closed doors to get through and one of them opens up, that doesn’t necessarily mean quick passage,” said Phil Levy, the chief economist at Flexport. “We should not delude ourselves that if our ports become 10 percent more efficient, we’ve solved the whole problem.”

Chris Netram, the managing vice president for tax and domestic economic policy at the National Association of Manufacturers, which represents 14,000 companies, said that American businesses had seen a succession of supply chain problems since the beginning of the pandemic.

“Right now, we are at the tail end of one flavor of those challenges, the port snarls,” he said, adding that Chinese lockdowns could be “the next flavor of this.”

Manufacturers are watching carefully to see whether more factories and ports in China might be forced to shutter if Omicron spreads in the coming weeks.

Neither Xi’an nor Henan Province, the site of China’s most expansive lockdowns, has an economy heavily reliant on exports, although Xi’an does produce some semiconductors, including for Samsung and Micron Technology, as well as commercial aircraft components.

Handel Jones, the chief executive of International Business Strategies, a chip consultancy, said the impact on Samsung and Micron would be limited, but he expressed worries about the potential for broader lockdowns in cities like Tianjin or Shanghai.

stay away from any vehicle collisions involving Olympic participants, to avoid infection.

Last year, terminal shutdowns in and around Ningbo and Shenzhen, respectively the world’s third- and fourth-largest container ports by volume, led to congestion and delays, and caused some ships to reroute to other ports.

But if the coronavirus does manage to enter a big port again, the effects could quickly be felt in the United States. “If one of the big container terminals goes into lockdown,” Mr. Huxley said, “it doesn’t take long for a big backlog to develop.”

Airfreight could also become more expensive and harder to obtain in the coming weeks as China has canceled dozens of flights to clamp down on another potential vector of infection. That could especially affect consumer electronics companies, which tend to ship high-value goods by air.

For American companies, the prospect of further supply chain troubles means there may be another scramble to secure Chinese-made products ahead of potential closures.

Lisa Williams, the chief executive of the World of EPI, a company that makes multicultural dolls, said the supply chain issues were putting pressure on companies like hers to get products on the shelves faster than ever, with retailers asking for goods for the fall to be shipped as early as May.

Dr. Williams, who was an academic specializing in logistics before she started her company, said an increase in the price of petroleum and other raw materials had pushed up the cost of the materials her company uses to make dolls, including plastic accessories, fibers for hair, fabrics for clothing and plastic for the dolls themselves. Her company has turned to far more expensive airfreight to get some shipments to the United States faster, further cutting into the firm’s margins.

“Everything is being moved up because everyone is anticipating the delay with supply chains,” she said. “So that compresses everything. It compresses the creativity, it compresses the amount of time we have to think through innovations we want to do.”

Ana Swanson reported from Washington, and Keith Bradsher from Beijing.

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Why Tesla Soared as Other Automakers Struggled to Make Cars

For much of last year, established automakers like General Motors and Ford Motor operated in a different reality from Tesla, the electric car company.

G.M. and Ford closed one factory after another — sometimes for months on end — because of a shortage of computer chips, leaving dealer lots bare and sending car prices zooming. Yet Tesla racked up record sales quarter after quarter and ended the year having sold nearly twice as many vehicles as it did in 2020 unhindered by an industrywide crisis.

Tesla’s ability to conjure up critical components has a greater significance than one year’s car sales. It suggests that the company, and possibly other young electric car businesses, could threaten the dominance of giants like Volkswagen and G.M. sooner and more forcefully than most industry executives and policymakers realize. That would help the effort to reduce the emissions that are causing climate change by displacing more gasoline-powered cars sooner. But it could hurt the millions of workers, thousands of suppliers and numerous local and national governments that rely on traditional auto production for jobs, business and tax revenue.

Tesla and its enigmatic chief executive, Elon Musk, have said little about how the carmaker ran circles around the rest of the auto industry. Now it’s becoming clear that the company simply had a superior command of technology and its own supply chain. Tesla appeared to better forecast demand than businesses that produce many more cars than it does. Other automakers were surprised by how quickly the car market recovered from a steep drop early in the pandemic and had simply not ordered enough chips and parts fast enough.

G.M. and Stellantis, the company formed from the merger of Fiat Chrysler and Peugeot, all sold fewer cars in 2021 than they did in 2020.

Tesla’s production and supply problems made it an industry laughingstock. Many of the manufacturing snafus stemmed from Mr. Musk’s insistence that the company make many parts itself.

Other car companies have realized that they need to do some of what Mr. Musk and Tesla have been doing all along and are in the process of taking control of their onboard computer systems.

Mercedes, for example, plans to use fewer specialized chips in coming models and more standardized semiconductors, and to write its own software, said Markus Schäfer, a member of the German carmaker’s management board who oversees procurement.

traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:

It also helps that Tesla is a much smaller company than Volkswagen and Toyota, which in a good year produce more than 10 million vehicles each. “It’s just a smaller supply chain to begin with,” said Mr. Melsert, who is now chief executive of American Battery Technology Company, a recycling and mining firm.

recall more than 475,000 cars for two separate defects. One could cause the rearview camera to fail, and the other could cause the front hood to open unexpectedly. And federal regulators are investigating the safety of Tesla’s Autopilot system, which can accelerate, brake and steer a car on its own.

“Tesla will continue to grow,” said Stephen Beck, managing partner at cg42, a management consulting firm in New York. “But they are facing more competition than they ever have, and the competition is getting stronger.”

The carmaker’s fundamental advantage, which allowed it to sail through the chip crisis, will remain, however. Tesla builds nothing but electric vehicles and is unencumbered by habits and procedures that have been rendered obsolete by new technology. “Tesla started from a clean sheet of paper,” Mr. Amsrud said.

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Supply Chain Woes Prompt a New Push to Revive U.S. Factories

When visitors arrive at the office of America Knits in tiny Swainsboro, Ga., the first thing they see on the wall is a black-and-white photo that a company co-founder, Steve Hawkins, discovered in a local antiques store.

It depicts one of a score of textile mills that once dotted the area, along with the workers that toiled on its machines and powered the local economy. The scene reflects the heyday — and to Mr. Hawkins, the potential — of making clothes in the rural South.

Companies like America Knits will test whether the United States can regain some of the manufacturing output it ceded in recent decades to China and other countries. That question has been contentious among workers whose jobs were lost to globalization. But with the supply-chain snarls resulting from the coronavirus pandemic, it has become intensely tangible from the consumer viewpoint as well.

Mr. Hawkins’s company, founded in 2019, has 65 workers producing premium T-shirts from locally grown cotton. He expects the work force to increase to 100 in the coming months. If the area is to have an industrial renaissance, it is so far a lonely one. “I’m the only one, the only crazy one,” Mr. Hawkins said.

General Motors disclosed in December that it was considering spending upward of $4 billion to expand electric vehicle and battery production in Michigan. Just days later, Toyota announced plans for a $1.3 billion battery plant in North Carolina that will employ 1,750 people.

little change in the balance of trade or the inclination of companies operating in China to redirect investment to the United States.

Since the pandemic began, however, efforts to relocate manufacturing have accelerated, said Claudio Knizek, global leader for advanced manufacturing and mobility at EY-Parthenon, a strategy consulting firm. “It may have reached a tipping point,” he added.

Decades of dependence on Asian factories, especially in China, has been upended by delays and surging freight rates — when shipping capacity can be found at all.

Backups at overwhelmed ports and the challenges of obtaining components as well as finished products in a timely way have convinced companies to think about locating production capacity closer to buyers.

“It’s absolutely about being close to customers,” said Tim Ingle, group vice president for enterprise strategy at Toyota Motor North America. “It’s a big endeavor, but it’s the future.”

New corporate commitments to sustainability are also playing a role, with the opportunity to reduce pollution and fossil fuel consumption in transportation across oceans emerging as a selling point.

Repositioning the supply chain isn’t just an American phenomenon, however. Experts say the trend is also encouraging manufacturing in northern Mexico, a short hop to the United States by truck.

traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:

“Incentives to help level the playing field are a key piece,” said David Moore, chief strategy officer and senior vice president at Micron. “Building a leading-edge memory fabrication facility is a sizable investment; it’s not just a billion or two here and there. These are major decisions.”

In the aftermath of the coronavirus and restrictions on exports of goods like masks, moving manufacturing closer to home is also being viewed as a national security priority, said Rick Burke, a managing director with the consulting firm Deloitte.

“As the pandemic continues, there’s a realization that this may be the new normal,” Mr. Burke said. “The pandemic has sent a shock wave through organizations. It’s no longer a discussion about cost, but about supply-chain resiliency.”

Despite the big announcements and the billions being spent, it could take until the late 2020s before the investments yield a meaningful number of manufacturing jobs, Mr. Burke said — and even then, raw materials and some components will probably come from overseas.

Still, if the experts are correct, these moves could reverse decades of dwindling employment in American factories. A quarter of a century ago, U.S. factories employed more than 17 million people, but that number dropped to 11.5 million by 2010.

Since then, the gains have been modest, with the total manufacturing work force now at 12.5 million.

But the sector remains one of the few where the two-thirds of Americans who lack a college degree can earn a middle-class wage. In bigger cities and parts of the country where workers are unionized, factories frequently pay $20 to $25 an hour compared with $15 or less for jobs at warehouses or in restaurants and bars.

Even in the rural South, long resistant to unions, manufacturing jobs can come with a healthy salary premium. At America Knits, a private-label manufacturer that sells to retailers including J. Crew and Buck Mason, workers earn $12 to $15 an hour, compared with $7.50 to $11 in service jobs.

The hiring is being driven by strong demand for the company’s T-shirts, Mr. Hawkins said, as well as by a recognition among retailers of the effect of supply-chain problems on foreign sources of goods.

“Retailers have opened their eyes more and are bringing manufacturing back,” he said. “And with premium T-shirts selling for $30 or more, they can afford to.”

A few years ago, Julie Land said she would naturally have looked to Asia to expand production of outerwear and other goods for her Canadian company, Winnipeg Stitch Factory, and its clothing brand, Pine Falls.

Instead, the 12-year-old business is opening a plant in Port Gibson, Miss., in 2022. Fabric will be cut in Winnipeg and then shipped to Port Gibson to be sewn into garments like jackets and sweaters. The factory will be heavily automated, Ms. Land said, enabling her company to keep costs manageable and compete with overseas workshops.

“Reshoring is not going to happen overnight, but it is happening, and it’s exciting,” she said. “If you place an order offshore, there is so much uncertainty with a longer lead time. All of that adds up.”

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Parents Face Long Waits for Car Seats and Other Baby Items

Almost as soon as Eryn Yates made it through her first trimester of pregnancy last spring, she started shopping for her dream nursery.

But getting the items she wanted turned into a nightmare.

The crib that she had ordered from Crate & Barrel arrived within weeks, but the rocking chair from Pottery Barn Kids was back-ordered for months, and then lost somewhere in transit. The delivery of the dresser she was going to use as her changing table was repeatedly postponed until West Elm informed her that it would be delivered in late April or May 2022 — more than six months after her daughter’s birth.

“I definitely thought that we were ahead of the game since we started ordering everything so early,” said Ms. Yates, 27, who lives in Winter Garden, Fla., and works in health care. “I was wrong.”

Global supply chain disruptions wrought by the pandemic have snarled the delivery of items as varied as medical devices, toys and Grape-Nuts. But perhaps no delays have provoked more familial angst in the last two years than those for baby items.

more than 3.6 million births in the United States in 2020.

The result of the baby-supply upheaval — besides higher prices and an ever-bustling hand-me-down market — has been an injection of new stress and uncertainty into an already emotionally delicate time. Expectant parents are scrambling to get items before they bring their babies home, and retailers and manufacturers are racing to reassure them that their goods will come, and devising hasty solutions if they won’t. Message boards on sites for new parents teem with complaints over back orders and repeated shipment delays. Retailers have become accustomed to soothing anxious parents-to-be.

“These are pregnant women that are all having their babies,” said Lauren Logan, the owner of the Juvenile Shop, a family-run baby retailer in the Sherman Oaks neighborhood of Los Angeles. “They are hormonal, but they are pregnant — they want their stuff. I don’t blame them. I want their stuff for them.”

traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:

On the receiving end are customers who don’t need another source of anxiety. First-time parents often research heavily before selecting strollers, cribs, car seats and other wares. And out-of-stock items can crimp registries; Babylist says new parents often select 100 to 200 items.

After Gina Catallo-Kokoletsos, 33, and her husband finally agreed on a crib from Pottery Barn Kids, her father placed the order as a gift in July. Originally, the crib was supposed to ship in October, giving just enough time before the couple’s baby was due in November. But when Ms. Catallo-Kokoletsos checked in September, she saw that the shipment date had been pushed to January.

“I called them, and they were like, ‘Oh, yeah, it’s going to be delayed.’ And I said, ‘Well, my baby is due before that,’” said Ms. Catallo-Kokoletsos, who lives in Chico, Calif., and works at an animal shelter. She ended up canceling the order and choosing a crib from a small company she had never heard of. That crib arrived on time, but other items on her baby registry, including a rocking chair, went out of stock before she could get them.

“I knew none of it was the end of the world,” she said. “It just kind of gets frustrating after a while.”

Further complicating matters for some expectant parents are deeply ingrained beliefs about buying or receiving items before their babies are born.

Joelle Fox, 35, a naturopathic physician in Scottsdale, Ariz., who is expecting a baby boy in January, said she was wary of ordering anything in part because of a custom among many Jewish people of not having baby things in the house until the baby arrives.

“It’s kind of a tradition that women have done, and I was kind of following that,” she said, adding that she also wanted to research items carefully to make sure they were not harmful. But the supply chain issues compelled her to start buying some items for the nursery at the end of October, a decision that she said prompted “a lot of emotions.”

Even still, she said, the dresser she ordered from Wayfair is not supposed to ship until mid-January. “That has definitely put a bit of a damper on everything, because I can’t get the room completely set up,” she said.

At around 36 weeks pregnant, Ms. Yates in Florida, whose daughter was born in October, gave up on receiving the West Elm dresser and bought one from Ikea. She cut off its legs and replaced them with metal ones that matched the crib she had bought.

She had less luck with her Pottery Barn Kids chair, which she had ordered in June. After it failed to arrive, she felt so desperate that she emailed corporate customer service and copied the chief executive. By the time she was told in October that the chair had been lost, the color and fabric she wanted were no longer available. The company ended up sending her a loaner chair, in a different color, “so I at least had something in the room for me to use.”

Ms. Yates said that she was sympathetic to the companies’ struggles, but that the ordeal still had left her in tears.

“I was not a very emotional pregnant woman — I had a very short temper, rather than being a crier,” she said. “But when it came to the nursery, I cried a lot, because I had this picture of exactly what I wanted, and then it just felt like one thing after another.”

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Supply Chain Shortages Help a North Carolina Furniture Town

HICKORY, N.C. — Six months into the coronavirus pandemic, as millions of workers lost their jobs and companies fretted about their economic future, something unexpected happened at Hancock & Moore, a purveyor of custom-upholstered leather couches and chairs in this small North Carolina town.

Orders began pouring in.

Families stuck at home had decided to upgrade their sectionals. Singles tired of looking at their sad futons wanted new and nicer living room furniture. And they were willing to pay up — which turned out to be good, because the cost of every part of producing furniture, from fabric to wood to shipping, was beginning to swiftly increase.

More than a year later, the furniture companies that dot Hickory, N.C., in the foothills of the Blue Ridge Mountains, have been presented with an unforeseen opportunity: The pandemic and its ensuing supply chain disruptions have dealt a setback to the factories in China and Southeast Asia that decimated American manufacturing in the 1980s and 1990s with cheaper imports. At the same time, demand for furniture is very strong.

In theory, that means they have a shot at building back some of the business that they lost to globalization. Local furniture companies had shed jobs and reinvented themselves in the wake of offshoring, shifting to custom upholstery and handcrafted wood furniture to survive. Now, firms like Hancock & Moore have a backlog of orders. The company is scrambling to hire workers.

12 percent nationally through October. Furniture and bedding make up a small slice of the basket of goods and services that the inflation measure tracks — right around 1 percent — so that increase has not been enough to drive overall prices to uncomfortable levels on its own. But the rise has come alongside a bump in car, fuel, food and rent costs that have driven inflation to 6.2 percent, the highest level in 31 years.

The question for policymakers and consumers alike is how long the surge in demand and the limitations in supply will last. A key part of the answer lies in how quickly shipping routes can clear up and whether producers like the craftsmen in Hickory can ramp up output to meet booming demand. But at least domestically, that is proving to be a more challenging task than one might imagine.

container ships cannot clear ports quickly enough, and when imported goods get to dry land, there are not enough trucks around to deliver everything. All of that is compounded by foreign factory shutdowns tied to the virus.

With foreign-made parts failing to reach domestic producers and warehouses, prices for finished goods, parts and raw materials have shot higher. American factories and retailers are raising their own prices. And workers have come into short supply, prompting companies to lift their wages and further fueling inflation as they increase prices to cover those costs.

Chad Ballard, 31, has gone from making $15 per hour building furniture in Hickory at the start of the pandemic to $20 as he moved into a more specialized role.

according to data from Zillow.

toilet paper to new cars. The disruptions go back to the beginning of the pandemic, when factories in Asia and Europe were forced to shut down and shipping companies cut their schedules.

“We have a labor market that is tight and getting tighter,” said Jared Bernstein, a White House economic adviser. Mr. Bernstein said the administration was predicting that solid wage growth would outlast rapid inflation, improving worker leverage.

domestic manufacturing. This moment could help that agenda as it exposes the fragility of far-flung supply networks.

But pandemic employee shortages, which are happening across the United States in part because many people have chosen to retire early, could also serve as a preview of the demographic shift that is coming as the country’s labor force ages. The worker shortages are one reason that ambitions to bring production and jobs back from overseas could prove complicated.

Hickory’s furniture industry was struggling to hire even before the coronavirus struck. It has a particularly old labor force because a generation of talent eschewed an industry plagued by layoffs tied to offshoring. Now, too few young people are entering it to replace those who are retiring.

Local companies have been automating — Hancock & Moore uses a new digital leather cutting machine to save on labor — and they have been working to train employees more proactively.

Several of the larger firms sponsor a local community college’s furniture academy. On a recent Thursday night, employers set up booths at a jobs fair there, forming a hopeful ring around the doorway of the school’s warehouse, welcoming potential candidates with branded lanyards and informational material. It was the first furniture-specific event of its kind.

But progress is slow, as companies try to assure a new — and smaller — generation of young people that the field is worth pursuing. Corporate representatives far outnumbered job seekers for much of the night.

“It’s such a tough market to find people,” said Bill McBrayer, human resources manager at Lexington Home Brands. Companies are turning to short-term workers, but even firms specializing in temporary help cannot find people.

“I’ve been in this business 35 years,” he said, “and it’s never been like this.”

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Retail Sales Jumped 1.7 Percent in October

“Everybody believed during 2021 that we’d see a significant shift away from goods back to services as the economic environment opened up as we got our arms around the pandemic,” Craig Menear, Home Depot’s chief executive, told analysts after the company reported its earnings Tuesday. “Clearly, we have not seen that.”

Strong October sales may partly reflect an early start to the holiday shopping season. In mid-September, L.L. Bean added a banner to its website warning customers about holiday shipping delays and shortages and urging early shopping. Best Buy offered its Black Friday deals well before Halloween, from Oct. 19 to Oct. 22. Target started “early Black Friday” deals on Oct. 31.

“I’m sure some folks started looking earlier because of worries that they won’t be able to find the item they’re looking for once everybody gets out to shop,” said Beth Ann Bovino, chief U.S. economist at S&P Global.

There are some signs, however, that shortages are beginning to ease, in part because retailers, too, shopped early this year. At the Port of Los Angeles, holiday orders usually begin arriving in late August or early September; this year, they began arriving in June, Gene Seroka, executive director of the port, said at an event on Tuesday with Transportation Secretary Pete Buttigieg.

Economists warned that if consumers simply got a head start on holiday spending, that could lead to disappointing sales in November and December. But most forecasters expect spending to remain strong because of the improved public health picture and the underlying strength of the U.S. economy.

Unemployment has fallen to 4.6 percent, from close to 20 percent at the height of the pandemic, and wages are rising, particularly for low-income workers. Households are sitting on a collective $2.5 trillion in savings built up during the pandemic — and, unlike last Christmas, when the pandemic reduced the appeal of browsing, fitting rooms and lingering indoors, many Americans feel comfortable going out and spending.

Tom Nolan, chief executive of Kendra Scott, a fashion jewelry business with 119 locations, said that its sales were up “materially” over both last year and 2019 and that he expected the performance to continue through the end of the year.

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Biden Says Spending Bill Will Slow Inflation. But When?

Rocketing inflation has become a headache for U.S. consumers, and President Biden has a go-to prescription. He says a key way to help relieve increasing prices is to pass a $1.85 trillion collection of spending programs and tax cuts that is currently languishing in the Senate.

A wide range of economists agree with the president — but only in part. They generally accept his argument that in the long run, the bill and his infrastructure plan could make businesses and their workers more productive, which would help to ease inflation as more goods and services are produced across the economy.

But many researchers, including a forecasting firm that Mr. Biden often cites to support the economic benefits of his proposals, say the bill is structured in a way that could add to inflation next year, before prices have had time to cool off.

Some economists and lawmakers worry about the timing, arguing that the risk of fueling more inflation when it has reached record highs outweighs the potential benefits of passing a big spending bill that could help to keep prices in check while addressing other social goals. Prices have picked up by 6.2 percent over the past year, the fastest pace in 31 years and far above the Federal Reserve’s inflation target.

Joe Manchin III of West Virginia, has questioned whether high and rising prices should persuade lawmakers to tone down their ambitions.

“West Virginians are concerned about rising inflation,” he said on Twitter last week. “We cannot throw caution to the wind & continue to pile on debt that our country can’t afford.”

Democrats preparing to push it to a House vote as early as next week. But timing is uncertain in the Senate, where a vote is likely to be changed or delayed in response to Mr. Manchin’s concerns.

The extent to which Mr. Biden’s $1.85 trillion bill exacerbates inflation largely depends on how much it stimulates the economy and whether Americans increase their spending as a result of the legislation — and when all of that occurs.

Many economists say it could create a short-term stimulus because the plan is structured to raise money gradually by taxing wealthier Americans, who are less likely to spend each additional dollar they have, and redistribute it quickly to people who earn less and are more likely to spend newfound cash.

Because of the difference in timing between when the government spends money and when it starts to bring in more revenue, the bill is expected to pump money into the economy in its early years. Moody’s Analytics — the firm that the White House typically cites when arguing in favor of its legislation — estimates that the government will spend $163 billion more on the package than it takes in next year. And the redistribution could make the money more potent as economic stimulus.

“The spending is designed to go to the people who are more likely to spend it than to save it,” said Ben Ritz, the director of the Progressive Policy Institute’s Center for Funding America’s Future. But more than any specific program, “the bigger inflationary issue is the math.”

White House economists have countered those arguments. If the bill passes, they say, it would do relatively little to spur increased consumer spending next year and not nearly enough to fully offset the loss of government stimulus to the economy as pandemic aid expires. That the program spends more heavily next year is a feature, they say, because it will partly blunt the economic drag as fiscal help fades. They note that the bill is intended to be offset completely by tax increases and other revenue savings.

And they argue that by increasing the economy’s capacity to churn out goods and services, the president’s infrastructure plan and his broader program could both help to moderate costs over time.

Mr. Summers has argued.

There is less economic or political debate about Mr. Biden’s $1 trillion infrastructure plan, which cleared Congress last week and which the president will sign on Monday. Economists — including conservative ones — largely agree that it is likely to eventually expand the capacity of the economy, and that it is small and spread out enough that it will not meaningfully fuel faster inflation in the near term.

Among Democrats, there is widespread support for the economic ambitions contained in the administration’s broader spending bill, which aims to create more equity for low- and middle-class earners and a bigger safety net for working parents. But the measure is drawing more complicated reviews when it comes to its immediate effect on inflation.

Economists at Moody’s found in a recent analysis that the administration’s full agenda would slightly increase inflation in 2022, though they did not expect the program to ultimately raise it because of benefits that would later ease supply constraints. It estimates that with the infrastructure bill alone, inflation will be running at a 2.1 percent annual rate by the final quarter of next year. If the larger spending bill also passes, that grows to 2.5 percent.

But Moody’s baseline assumption that inflation will moderate by the end of next year is relatively optimistic. Bank of America’s economics team said that core consumer prices would still rise at a 3.2 percent rate at the end of next year, incorporating the assumption that Mr. Biden’s plan passes.

companies scramble for workers, prices rise and supply chains struggle to keep pace with booming demand, this is the wrong moment to hit the economy with any added juice.

“We don’t have a lot of spare capacity,” said Kristin J. Forbes, an economist at the Massachusetts Institute of Technology. “We certainly don’t have a lot of spare workers today.”

Inflation looms more significantly in the near term because it is currently high, and if it remains that way for an extended period, consumers could change their behaviors and expectations, locking in faster gains. People who worry about the proposals say that 2022 is the wrong time to hand households more money.

Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, said she was unsure whether the package would fuel inflation. But given the current pace of price increases, “you have to be more careful than you would be otherwise.”

The White House says the provisions of the bill that put money in families’ pockets, such as child care help, are not simple stimulus. They will allow caregivers into the labor market, they argue, an investment in the economy’s future that will allow it to produce more with time.

That makes the new program different from the spending passed earlier this year. The Biden administration increasingly acknowledges that sending households checks and offering expanded unemployment insurance supplemented savings, and that as households had more wherewithal to spend it helped to drive up prices.

Mr. Biden said in Baltimore on Wednesday. But the White House contends that this program is not the same as the previous package, and that it will make the price situation better, not worse.

“According to the economic experts, this bill is going to ease inflationary pressures,” the president said on Wednesday.

Still, the 17 Nobel Prize-winning economists that the White House regularly cites have specified that capacity improvements will ease inflation over time rather than imminently.

“Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy,” they wrote, “it will ease longer-term inflationary pressures.”

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October 2021 CPI: Inflation Rose at Fastest Rate Since 1990

Consumer prices surged at the fastest pace in more than three decades in October as fuel costs picked up, supply chains remained under pressure and rents moved higher — worrying news for economic policymakers at the Federal Reserve and for the Biden White House.

Overall prices rose 6.2 percent over the past 12 months, the fastest pace since 1990, and inflation began to accelerate again on a monthly basis.

Prices rose across the board in October, at deli counters and restaurants and car dealerships. The acceleration is an unwelcome development for the Biden administration, which had continually pointed out that while price gains were faster than usual, they were slowing down from rapid summertime readings. It is also a policy challenge for the Fed, which is charged with maintaining stable prices and fostering maximum employment.

Inflation rates remain far faster than the 2 percent annual gains the Fed aims for on average over time. While the Fed sets its goal using a separate measure of inflation — the Personal Consumption Expenditures index — that, too, has picked up sharply this year. The C.P.I. reports come out faster, and help feed into the central bank’s favored gauge, so they are closely watched by economists and Wall Street investors.

expressing concern about the impact more federal spending could have on inflation.

Part of the dilemma is that inflation is not moderating, as many economists had expected it would by the end of 2021. Instead, it jumped to 0.9 percent last month from September, a Labor Department report showed, faster than the prior month’s increase of 0.4 percent and well above economists’ expectations. So-called core prices, which strip out products like food and fuel, also climbed more quickly.

Administration and Fed officials alike have maintained that rapid inflation should eventually fade. But they have had to revise how quickly that might happen: Supply chains remain badly snarled, and demand for goods is holding up and helping to fuel higher prices. As wages begin to rise in many sectors amid labor shortages, there are reasons to expect that some businesses might charge their customers more to cover climbing worker costs. October’s data did nothing to alleviate that growing sense of unease.

Shortages of used and new cars have sent prices skyrocketing, supply chain issues have made furniture costlier, labor shortages are raising some service-industry price tags, and rents are rising after a weak 2020. In the headline data, food and fuel prices have picked up sharply.

participation in the job market shows little sign of picking up, fueling wage gains, Ms. Meyer said.

“It’s obviously getting uncomfortable for the Fed,” she said.

Officials have avoided overreacting to an inflation surge driven by supply chain problems, worried that doing so would hurt the economy unnecessarily. If the trends persist, they will most likely come under growing pressure to hasten their plans to pull back economic support by ending their stimulative bond-buying program and raising interest rates from rock bottom sooner and more quickly.

Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said inflation had been “eye popping” but cautioned that the Fed was also paying attention to the many jobs still missing from the labor market. In an interview with Bloomberg Television on Wednesday, Ms. Daly said it was too soon to suggest that officials would need to speed up their process of slowing — or tapering — monthly bond purchases beyond the pace the Fed announced last week. Tapering that buying is a precursor to rate increases.

“It would be very premature to start asking whether we should quicken the taper,” Ms. Daly said.

Markets took note of the inflation figures, with stocks slowly sinking throughout the day. A key measure of the bond market’s expectations for inflation over the next five years rose to a new high of 3.10 percent shortly after the report was issued. That means investors expected inflation to average about 3 percent a year for the next five years, essentially, far higher than any time in the decade before the pandemic hit.

investors have come to more heavily expect a rate increase by the central bank’s meeting in June 2022.

For policymakers and investors alike, it is difficult to predict when price jumps might moderate. Many are intertwined with the reopening of businesses from state and local lockdowns meant to contain the coronavirus; the economy has never gone through such a widespread shutdown and restart before.

But officials have become wary that uncomfortably high inflation might linger. Consumers have been increasing their expectations for future price gains. Households expecting to face climbing grocery, department store and gas bills might demand pay raises — setting off an upward cycle in which wages and prices push one another ever upward.

Key measures of price expectations haven’t climbed into the danger zone yet, officials including Richard H. Clarida, the Fed’s vice chair, have said. And there are still reasons to believe that today’s price pop will fade. Households are sitting on huge savings stockpiles amassed during the pandemic, but should theoretically spend those down now that government support programs like expanded unemployment insurance have fully or mostly lapsed.

If demand moderates, it could open the door for a return to normal, as supply chains catch up. To the extent that suppliers have responded to this moment by ramping up their productive capacity, some prices might even fall.

Supply chain experts have been warning that some of the shortages driving up costs might get worse before they get better, especially headed into the busy holiday shopping season, which could further clog backed-up ports and understaffed trucking routes. The longer that prices for washing machines and electronics soar, the more risk there is that consumers will begin to plan for higher prices.

closely watched index that tracks wholesale vehicle costs. After that, they’re unlikely to actually fall; they will just increase less quickly than their current breakneck pace.

At #1 Cochran Subaru Butler County, a car dealership in western Pennsylvania, the general sales manager, Jim Adams, is offering a $500 bonus to customers who return leased vehicles early, and buying cars that people bring in for repairs. He is asked a few times a day when things might normalize.

“Until the manufacturers can get back up to speed, used car prices will continue to grow,” Mr. Adams said in an email.

As industries wait for balance to return, Republicans are pointing fingers at Mr. Biden and Democrats, saying the stimulus checks they provided to households and other pandemic-related benefits are responsible for the rise in prices.

The White House has tried to emphasize that prices are jumping while the country is staging a rapid economic rebound from a once-in-a-century disaster. And Mr. Biden has said his new policies, including an infrastructure bill that cleared Congress last week, will over time expand capacity and help to cool inflation.

But the president made clear on Wednesday that the onus for taming inflation rested with the Fed. “I want to re-emphasize my commitment to the independence of the Federal Reserve to monitor inflation, and take steps necessary to combat it,” Mr. Biden said in his statement.

At the Fed, some officials are already warning that the central bank may need to pull back economic support faster. Doing that could cool down prices by tempering demand, but would also weaken the job market when millions remain out of work compared with prepandemic employment levels.

recent news conference. “There is still ground to cover to reach maximum employment.”

Fed officials have been careful to acknowledge that high prices can be hard for consumers to absorb, especially for goods and services that households consume regularly.

Gasoline prices were 49.6 percent higher in October compared with a year earlier, and fuel oil, which is used for industrial and domestic heating, was up 59 percent.

Food at home cost 5.4 percent more this October than a year earlier, and some categories, including steak and bacon, posted gains in excess of 20 percent.

“I expect lots of eyeballs were bulging out of their sockets when they saw the number come in,” Seema Shah, chief strategist at Principal Global Investors, wrote in a note reacting to the October data. “Inflation is clearly getting worse before it gets better.”

Reporting was contributed by Ana Swanson, Talmon Joseph Smith, Matthew Phillips and Clifford Krauss.

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