Over the past 15 months headlines have revolved around the growth of the economy and how it has impacted our supply chains. Consumer spending has been the greatest factor as generous government assistance has left Americans with extra cash. Even as airline travel, lodging, and entertainment have opened back up, retail sales remain strong. This is especially true as we approach the holiday season. The big question on most logistics professionals’ minds, however, is how long will this 15+ month peak season last? A handful of indexes such as Personal Consumption Expenditures, Savings Rates, the CPI, and TEU bookings may already be trending in a cooling direction.
For example, while Service Expenditures have remained above Durable and Nondurable Goods combined throughout the entire pandemic, since Q2 this year PCE Services have really started to pick up steam as COVID fears eased and vaccination counts began to increase. At the same time, Durable Goods seem to have peaked and are in a downward trend. Durable Goods represent items purchased by consumers that last more than 3 years such as electronics, appliances, and furniture. As we’ve discussed in past episodes, the influx in demand of these goods during the pandemic has kept an enormous amount of pressure on our supply chains.
