The U.S. economy is trying to restart its engine after tumbling into its deepest recession in generations, but a variety of supply-chain constraints are threatening the country’s rebound.
The country is faced with major shortages in everything from labor to semiconductors, lumber and packaging materials. Not even swimming pools can be counted on this summer with the U.S. running low on chlorine. The scarcity left and right is not only preventing the economy from reaching its full potential, but also raising fears of higher inflation as companies are forced to hike prices amid the low supply.
“These shortages, both labor and non-labor, will affect the speed under which the economy recovers,” said Michael Gapen, head of U.S. economics research at Barclays. “Labor and non-labor inputs are complements in production. You need both. If I can’t get my semiconductors to make my autos, then I don’t necessarily need to hire more labor right now.”