White House officials, scrambling to relieve global supply bottlenecks choking U.S. ports, highways and railways, warn that Americans may face higher prices and some empty shelves this Christmas season.
The supply crisis, driven in part by the global COVID-19 pandemic, not only threatens to dampen U.S. spending at a critical time, it also poses a political risk for President Joe Biden.
The White House has been trying to tackle inflation-inducing supply bottlenecks of everything from meat to semiconductors, and formed a task force in June that meets weekly and named a “bottleneck” czar to push private-sector companies to ease snarls.
Biden himself plans to meet with top executives from retail giants Wal-Mart Inc and Home Depot Inc and with unions and other stakeholders on Wednesday to discuss efforts to relieve transportation bottlenecks before delivering a speech on the topic.
American consumers, unused to empty store shelves, may need to be flexible and patient, White House officials said.
“There will be things that people can’t get,” a senior White House official told Reuters, when asked about holiday shopping.
“At the same time, a lot of these goods are hopefully substitutable by other things. … I don’t think there’s any real reason to be panicked, but we all feel the frustration and there’s a certain need for patience to help get through a relatively short period of time.”
Inflation is eating into wages. Labor Department data shows that Americans made 0.9% less per hour on average in August than they did one year prior.
The White House argues inflation is a sign that their decision to provide historic support to small businesses and households, through $1.9 trillion in COVID-19 relief funding, worked.
U.S. consumer demand stayed strong, outpacing global rivals, and the Biden administration expects the overall economy to grow at 7.1%, as inflation reaches its highest levels since the 1980s.