The holiday shopping season kicked off this weekend, but supply chain issues and surging inflation threaten the retail recovery. The rapid spread of the Omicron variant of coronavirus could also amplify the forces driving up inflation.
Axios says Democrats “are scrambling to show action and deflect blame,” with the White House saying reports of empty store shelves are overblown, and pointing the finger at “the cartel of shipping companies” for price-gouging. The White House also says President Biden has taken steps to deal with supply-chain disruption, including issuing executive orders and expanding port operating hours.
But economist Mohamed El-Erian, appearing on Fox News Sunday, said more needs to be done: “I don't think we have an issue with demand. I think incomes are strong. Retail sales are strong. … The problem is the supply side. And unless we fix the supply side, it will contaminate the demand side.” El-Erian also warned that the new COVID variant could exacerbate supply chain issues, impacting inflation.
Some Democrats say President Biden needs to do more. In a letter to the President last week, Rep. Abigail Spanberger (D-VA) wrote, “I urge you to appoint a Supply Chain Czar responsible for coordinating a federal response to supply chain disruptions across all relevant agencies, working with state and local governments to address bottlenecks wherever they occur, and finding ways to bolster American manufacturing and supply chain resilience at home.”
The Washington Post says “supply chain issues that have made some products scarce” are one of the key drivers of inflation. Consumer prices rose at a three-decade high in October. Bipartisan solutions like the Ocean Shipping Reform Act of 2021, backed by the House Problem Solvers Caucus, might offer some relief.