The New York Federal Reserve said on Thursday that pressure on global supply chains eased in July, reaching its lowest level since January 2021, as ports and other barriers eased; This is among the latest data for a global indicator of supply problems.
Pressure eased for a third straight month in an encouraging sign for Federal Reserve policymakers eager to ease supply chain problems to help curb four decades of high inflation in the world’s largest economy.
The Federal Reserve’s Global Supply Chain Stress Index aggregates data on shipping costs, delivery times, delays and other statistics into one metric and compares them to common standards.
The index has now fallen more than 50 percent from the highest level recorded last December, but it is still higher than the level before the start of the Covid-19 pandemic.
The data is consistent with a survey released by the Supply Management Institute earlier this week that also showed improvement in the speed of supplier delivery.
Supply chain issues have become a key issue in the global recovery from the coronavirus pandemic and efforts by the Federal Reserve and other major central banks to control inflation.
The supply chain problem worsened earlier in the year; China’s lockdown measures to combat the spread of the coronavirus and tackling the war in Ukraine have extended delivery times.
The U.S. Federal Reserve and other central banks have already started raising interest rates rapidly in an effort to curb demand for goods and services in hopes of solving the supply chain problem in order to better balance the economy.
(Reuters)