- Feb 22, 2017
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America isn't running out of everything just because of a supply-chain crisis. America is running out of everything because Americans are buying so much stuff.
Claims that the US is running short on everything miss a key point. Record imports are part of the reason for the epic supply-chain congestion.
www.yahoo.com
America isn't running out of everything just because of a supply-chain crisis. America is running out of everything because Americans are buying so much stuff.
- But US imports are at record levels at some ports, and Americans are breaking shopping records, too.
To understand the situation, consider the country's inventory to sales ratio. This metric, tracked by the US Census Bureau, compares how much stuff sellers have on hand to how much stuff consumers are buying. The ratio is at a 10-year low, which indicates that we're low on stuff.
But the Port of Los Angeles reported a 30% uptick in incoming cargo in the first nine months of this year. (Important note, most of nonfood goods sold in the US come from abroad.) The Port of Charleston, South Carolina, has been breaking all-time records since March. Prologis, a major industrial real-estate player, is "effectively sold out" of warehouse space.
All of that means that the inventory to sales ratio isn't low because the US is short on stuff. It's low because sales have gone completely nuts.
In the first nine months of 2021, retail sales were up 14.5% over the same period in 2020 - a year in which retail sales jumped 8% over 2019. The NRF expected to end the year with sales up 10.5% to 13.5%. Lots of imports and even more spending have driven the inventory to sales ratio down because businesses imported a lot of stuff, and then Americans bought it.