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This, as you will remember, is the week Unhedged does not talk about inflation. Today, for example, we are talking about bottlenecks in a key supply chain. A bottleneck is a thing that makes you think there is inflation when really there isn’t any, which is very different.
Email me: Robert.Armstrong@ft.com
Or, rather, Luuummmberrrrr!
Here’s some data from Bloomberg:
Rising lumber prices have been everyone’s favourite example of what results from clogged pandemic supply chains and the booming post-virus economy. They left other fast-rising commodities prices in their (saw)dust. Production and distribution of lumber were hobbled by the virus, even as demand held strong due to a boom in lockdown home improvement projects. House building boomed as the US opened up. Lumber shot up, pushing house prices up with them, and raising anxieties about the economy’s ability to return to normal.
But things have started to revert to normal — fast. Lumber futures, pictured above, have given up half their pandemic gains in just a few weeks. This is from a Bloomberg story a couple of days ago:
“Sawmills appear to be catching up with the rampant home building demand . . . buyers are baulking at still historically elevated prices and awaiting additional supplies, setting off a cascading…