The U.S. economy is on a strong growth path and cash-rich consumers are spending robustly on both services and goods. Roughly 80 percent of the U.S. adult population has now received at least one vaccination shot, leading to renewed participation in many public activities. But while the U.S. economy is running hot, it is still very much in the grips of the pandemic. Its negative influence, however, has steadily shifted from curtailing demand to derailing supply chains.
According to a new Quarterly report from CoBank’s Knowledge Exchange, supply chains are arguably in the most dire condition since the start of the pandemic, as lead times for manufacturing inputs recently reached record highs. Persistent supply chain disruptions and labor shortages are adding significant costs to business operations, and consumers will feel these effects through higher prices for months to come.