Supply pressure → US inflation

Common explanation (Knock-on · same direction): Clogged supply chains and higher freight costs make goods cost more.

This issue: Supply pressure at 91 (hot), US inflation at 64 (warm) — both above normal, in line with the common explanation.

Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.

Where it stands now

Where the two indicators stand this issue

Supply pressure: Now 1.28 standard deviations. US inflation: 0.41 percentage points above its 10-year average.

Tests

Does this link hold up?

Common explanationClogged supply chains and higher freight costs make goods cost moreSource: Federal Reserve Bank of New York, “The Global Supply Side of Inflationary Pressures” (2022).
Tested against our dataAgreement between the positions of Supply pressure and US inflation (6-month lag), measured in the direction of the common explanation: +0.45. Looking at every 5-year period (shifted one year at a time), the two moved in that direction in all 14, but that does not mean they always will; data start only in 2007. Supported by the data
Periods when it did not holdAcross 14 5-year periods, out of step in none.

History

The two lines, overlaid

Data: Federal Reserve Bank of New York, Global Supply Chain Pressure Index (GSCPI); US: Bureau of Labor Statistics, via FRED (Federal Reserve Bank of St. Louis); Japan: World Bank Global Economic Monitor (CC BY 4.0); others: OECD. Positions: our calculation.

Supply pressureUS inflation

Time lag

At what lag do they match best?

Longer bar = moves more in the direction of the common explanation (the number is the agreement).

same month+0.38
3-month lag+0.45
6-month lag+0.45
9-month lag+0.49
12-month lag+0.50
18-month lag+0.37

Limits

What this card cannot tell you

Moving together does not prove that one causes the other.
Links change over time; periods when this one did not hold are listed in full.
This is the historical record, not a forecast.

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