January poses a triple threat to US imports

Our supply-chain stress index rose in October, reaching its highest level in two years. The gain this month was primarily concentrated in the prices index, which reflects an increase in inbound air freight prices. 

What you will learn:

• Supply-chain stress now lies at its highest level in two years, adding some downside risk to our forecast for manufacturing industrial production in the near term, while the inflation risks are less concerning because of noticeable disinflation that the US is importing from China.
• Some of the added supply-chain stress is self-inflicted. We identify three reasons why retailers and manufacturers will likely frontload shipments ahead of January: a second potential port worker’s strike, new tariffs under the Trump administration, and the Chinese Lunar New Year.
• Another wave of frontloading would raise congestion issues at West Coast ports again and could delay deliveries to manufacturers. However, the inflationary risks remain low.

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