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Rising supply chain prices: Gasoline, housing, timber and chicken are rising



The stimulated economy is recovering and Americans are once again spending on shopping, traveling and eating out. But the pandemic is far from over, and supply chain woes mean supply is out of demand – shipping prices are even higher.
US consumer prices rose 4.2 percent in April from a year earlier, more than economists forecast at 3.6 percent. This was the largest 12-month increase since September 2008, at the height of the financial crisis.

Here’s what’s getting more expensive and why, according to CNN Business writers.

Chicken prices are rising.

The chickens are in short supply, which leads to higher prices. Part of the blame is for Tyson’s roosters.

The meat processor, which sells poultry along with beef and pork, said the volumes of chicken meat are partly low because the roosters it uses for breeding do not live up to expectations.

“We’re changing a male, which we honestly made a bad decision about,” said Donnie King, Tyson’s chief operating officer and president of the group of birds, during an analyst interview this week.

To increase the supply of chicken, Tyson (TSN) returns to the male breeding chicks they used before. The company declined to say what would happen to the discarded roosters or how many were exchanged.

Food as a whole is also rising: Prices rose 0.4% in April as food and restaurant prices rose. On an annual basis, food prices increased by 2.4%.

Gasoline

The average price per gallon of gas reached $ 3 this week.
A growing number of East Coast gas stations have run out of fuel in the past week as nervous drivers aggressively fill their tanks after a ransomware attack that shut down the colonial pipeline, a critical artery for gasoline, for six days.

Buying panic threatens to intensify the supply shock. Gasoline demand in the United States rose 14 percent on Tuesday from a week earlier, according to the GasBuddy app, which tracks fuel prices and demand.

The pipeline opened on Wednesday night, but before making average prices, the pump rose above the key psychological milestone of $ 3 a gallon on Wednesday for the first time in more than six years, according to AAA.

Homes

The limited stock has caused housing prices to rise.
At the beginning of 2021, house prices continue to rise to new record highs, with prices rising in almost every major metro area. Limited inventory is partly the reason.

In 99% of metro areas monitored by the National Brokers Association, prices in the first quarter of 2021 increased over the same period last year, according to a NAR report. Nationwide, the average selling price for existing housing has risen 16 percent since the first quarter of 2020 to $ 319,200, both at record highs since the NAR began tracking data on cities in the 1989 quarter.

Nearly 90% of metro areas saw double-digit percentage price increases last year. In comparison, only 25% of the regions saw similar growth in the first quarter of 2020, when the housing inventory was at a healthier level and better in line with the pace of monthly demand.

Timber

Timber is becoming more expensive.

As the pandemic crushed the US economy last spring, sawmills halted timber production to prepare for a downturn in housing. The decline never came and now there is not enough wood to feed the hot housing market.

The shortage is slowing down the construction of much-needed new homes, complicating repairs to existing ones and causing a shock of stickers for buyers in the already burning market.

Random timber futures hit a record high of $ 1,615 last week, a staggering sevenfold low-profit gain in early April 2020. That’s a big deal, as timber is the most significant supply homeowners buy. On Wednesday, the price fell to 1533 dollars.

Used cars and trucks

The increase in the prices of used cars and trucks is 10%.
The biggest driver of the inflation jump in April was the steep 10% increase in used car and truck prices. This jump represents more than a third of the overall rise in inflation and is the largest rise in prices since the government began tracking data on used cars in 1953. Over the past year, used car prices have risen by 21%.

To make matters worse, car dealers’ accounts have only a small fraction of the vehicles they usually have from both new and used vehicles. This sends prices to record levels. For example, the average price of a new car was $ 37,200 in the first quarter, according to JD Power, which is 8.4% more than the same period a year ago.

“This puts used wholesale prices at the highest level ever,” said David Paris of JD Power. “And we see that the retail prices used are accelerating rapidly.”

– Anna Bahney, Matt Egan Chris Isidore, Anneken Tappe and Danielle Wiener-Bronner contributed to this report.


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