The reason prices are rising is because of the stranding of container ships at ports. Also, unloaded goods are still waiting for trucks. This has led to a prolonged bout inflation and mass shortages. Rising costs are affecting worker wages, causing a drag on growth, and provoking Republican criticism of Biden as his multitrillion dollar tax, climate, and infrastructure agenda goes through the crucible that is congressional negotiations.
The White House has responded to the backlog with an agreement that the Port of Los Angeles will become a 24-hour operation, seven days a week. Nighttime operations are expected to help break the logjam, reduce shipping delays, and allow for toasters, sneakers and bicycles to be shipped faster.
Biden stated at the White House that "with holidays approaching, you might wonder if the presents you plan to purchase will arrive on-time." "Today, we have good news: We are going to speed up delivery of goods across America."
The expansion of port operations also reflected the unspoken recognition that inflation continues to rise long after the economy reopened from the coronavirus pandemic. Businesses were worried about the long delays in shipping containers, but the administration formed its supply chain taskforce that month and appointed a port envoy to address the problem on August 27.
Biden stated that ports are only one part of the puzzle. Biden stated that the country needs more truck drivers and private retailers, better infrastructure, and a supply chain that is less susceptible to disruption by extreme weather and pandemics. The president wants to make this a selling point for his policies, which are currently being scrutinized by Congress.
He stated that "We must take a longer perspective and invest in building greater resilience to withstand the types of shocks we have seen year in and year-out, the risk of pandemics, extreme weather, climate changes, cyberattacks and weather disruptions."
Many Americans are beginning to feel anxious.
Betsey Stevenson, University of Michigan economist, noted that the "economy" is in a fragile and unimaginable place. Prices have risen at over 5% and trade in goods has slowed. More Americans are leaving their jobs as the coronavirus pandemic risk and the delta variant has caused more people to quit their jobs.
40% of all US shipping containers enter the United States via Los Angeles or Long Beach ports. According to the Marine Exchange of Southern California, 64 ships were berthed at these ports as of Tuesday. There were also 80 vessels waiting to dock or unload.
The backlog will be relieved by commitments from the Los Angeles port's operator and longshoremen, as well as several of the largest shipping and retail companies in the country.
Walmart, FedEx and UPS, Target, Samsung, Target, UPS, Target, Samsung, and The Home Depot all committed to loading during off-peak hours to make it easier for Los Angeles to continue to operate nonstop. For the past three weeks, the Long Beach port has been open for approximately seven days and is now operating 24 hours a day for seven days.
Before his speech, Biden held a virtual roundtable, among others, with representatives from Walmart, FedEx Logistics and Target.
Republican lawmakers claim that Biden's $1.9 billion coronavirus relief program has driven up prices. According to Goldman Sachs, supply-constrained goods account for 80% in this year's inflation increase. However, the criticisms continue to hurt as rising oil and housing prices contribute to the inflationary pressures.
Senator Republican Leader Mitch McConnell from Kentucky has made inflation one his central accusations against Biden. This is a sign that Democrats could need to get prices under control if they want to retain their congressional seats next year.
"The Democrats' inflation is so bad that even though the average American worker has gotten a multiple-percentage-point pay raise over the last year, their actual purchasing power has been cut," McConnell said in a Senate speech last week. Even dollar stores are being forced to increase their prices. Ask any American family about their recent trips to the grocery store, gas station or toy shop. It is a terrible thing if they have had to take part in the housing or auto markets.
Biden's administration has claimed that higher inflation is temporary. The supply chain problems have remained months after the economy reopened and recovered. Vaccinations had reduced many of the pandemic risk factors.
The Bureau of Labor Statistics reported Wednesday that consumer prices rose 5.4% compared to a year ago. This is significantly higher than the Federal Reserve's target of 2%. Price increases in September were primarily driven by higher energy, food, and shelter costs.