Postal Problems, Supply Chain, and Trade Wars: How America Ruined Christmas

Although the pandemic ignited the game, the United States has kindled this campfire of supply chain failures for years. The government has slashed investment in manufacturing, paralyzed postal services, and waged small trade wars that made the pandemic era particularly painful for consumers.

Exempt mail: The U.S. Postal Service is in a hot mess right now – it is short of funds and manpower, and it’s weighed down by the influx of parcels in the pandemic era.

It gets worse. As of last Friday, mail in the United States has been more expensive and, in many cases, much slower thanks to a new and controversial standard of service that is reducing mail times and charging consumers peak shipping costs. Just in time for the holidays!
The USPS’s dire financial condition is largely due to Congress. Ironically, the USPS cash flow is positive. But the agency, which does not receive taxpayers ‘money, was crippled by the 2006 decision by Congress that it had to pre-finance 75 years’ worth of retirement benefits – a mysterious system that no other government agency follows.

Manufacturing problems: Washington is also to blame for the US’s reliance on global supply chains.

For decades, the U.S. has been innovating domestically and building overseas, making high-end manufacturing (and the high-paying jobs that come with it) all but disappearing.

Take semiconductors, for example – those tiny bits of etched silicon that power virtually every aspect of modern life, from your car to your refrigerator to the device you’re reading this on.

“The reason we’re really in this mess is that we haven’t invested in a long time,” Trade Minister Gina Raimondo recently told CNN. “We used to be the world leader in semiconductor manufacturing and now we are no longer. We just disinvested.”

Over the past three decades, the United States’ share of global semiconductor manufacturing has fallen to just 12% – from 37% in 1990, according to the Semiconductor Industry Association.

Meanwhile, competitors in Asia have ramped up their capacities, putting the United States at a “competitive disadvantage,” the trading group said. Although the Biden administration is pushing Congress to pass a $ 52 billion bill that would bolster semiconductor manufacturing and research domestically, the impact of legislation (yet to be voted on in the House of Representatives) would be years away .

Trade Wars: To further complicate matters, the United States is embroiled in a trade war with China. Long before the pandemic, the Trump administration imposed tariffs on goods valued at more than $ 300 billion. Rather than pressuring China to reform its trade practices, the tariffs have harmed American consumers and manufacturers who rely on materials made in China (read: everyone). Treasury Secretary Janet Yellen has confirmed this, but the Biden administration has yet to act.

Bottom line: even if you don’t buy Christmas presents, the end of the year still looks like a mess as inflation remains stubbornly high.

Winter maintenance bills are another huge drag on household finances as inflation infiltrates almost every consumer product on the market. The prices of natural gas – a non-renewable fossil fuel that remains the most common method of heating homes in America – skyrocket as the northern hemisphere moves into fall and winter.

The open fire that you roast your chestnuts on may have to act as a heating system for your home.

U.S. employment report

U.S. consumer spending spiked in August, according to data released last week, suggesting the summer impotence caused by the Delta variant of the coronavirus may be coming to an end.

But another big test comes on Friday when the US government releases its job report for September.

Recall: America’s recovery hit a major roadblock in August when the economy only created 235,000 jobs. That was the fewest new jobs since January, and the economic slowdown shocked economists who had expected three-quarters of a million jobs.

Analysts hope for a stronger result this time. You will also closely monitor wage growth, which can affect inflation.

Low-wage workers are making “noticeable” gains on their paychecks, Goldman Sachs said last week.

The wages of the low-wage workers increased by 5.3% in the second quarter compared to the previous year, the bank said. Preliminary data for the third quarter suggests wage increases are at a three-year high of 6%.


Monday: OPEC + meeting; PepsiCo revenue; US factory orders

Tuesday: US trade balance data

Wednesday: EIA report on crude oil stocks; Constellation Brands and Levi Strauss won

Thursday: US Unemployment Claims; Conagra profit

Friday: US employment report for September


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