WASHINGTON (Reuters) - White House officials, scrambling to relieve global supply bottlenecks choking U.S. ports, highways and railways, warn that Americans may face higher prices and some empty shelves this Christmas season.
The supply crisis, driven in part by the global COVID-19 pandemic, not only threatens to dampen U.S. spending at a critical time, it also poses a political risk for President Joe Biden.
The latest Reuters/Ipsos poll shows the economy continues to be the most important issue for Democrats and Republicans alike.
The White House has been trying to tackle inflation-inducing supply bottlenecks of everything from meat to semiconductors, and formed a task force in June that meets weekly and named a “bottleneck” czar to push private-sector companies to ease snarls.
Biden himself plans to meet with top executives from retail giants Wal-Mart Inc (WMT.N) and Home Depot Inc (HD.N) and with unions and other stakeholders on Wednesday to discuss efforts to relieve transportation bottlenecks before delivering a speech on the topic.
Supply chain woes are weighing on retail and transportation companies, which recently issued a series of downbeat earnings outlooks. Meanwhile, the Federal Reserve last month predicted a 2021 inflation rate of 4.2%, well above its 2% target.
American consumers, unused to empty store shelves, may need to be flexible and patient, White House officials said.
“There will be things that people can’t get,” a senior White House official told Reuters, when asked about holiday shopping.
“At the same time, a lot of these goods are hopefully substitutable by other things. ... I don’t think there’s any real reason to be panicked, but we all feel the frustration and there’s a certain need for patience to help get through a relatively short period of time,” the official added.
Inflation is eating into wages. Labor Department data shows that Americans made 0.9% less per hour on average in August than they did one year prior.
The White House argues inflation is a sign that their decision to provide historic support to small businesses and households, through $1.9 trillion in COVID-19 relief funding, worked.
U.S. consumer demand stayed strong, outpacing global rivals, and the Biden administration expects the overall economy to grow at 7.1%, as inflation reaches its highest levels since the 1980s.
“We recognize that it has pinched families who are trying to get back to some semblance of normalcy as we move into the later stages of the pandemic,” said a second senior White House official.
In August, the White House tapped John Porcari, a veteran transportation official who served in the Barack Obama administration as a new “envoy” to the nation’s ports, but he’s known as the bottleneck czar.
Porcari told Reuters the administration has worked to make sure various parts of the supply chain, such as ports and intermodal facilities, where freight is transferred from one form of transport to another, are in steady communication.