- Houses, cars, bikes, electronics, and other goods are getting pricier due to a supply shortage.
- A fiscal stimulus and vaccine rollout has left Americans ready to spend, sending demand soaring.
- But firms underestimated demand, US shipping ports are congested, and the Texas freeze made it all worse.
- See more stories on Insider’s business page.
You might have noticed that you’ve been shelling out more for things like houses, gas, and cars. And it’s been hard to get your hands on things like fitness gear, sofas, and roller skates.
That’s because America is reopening to a more expensive economy than the one that existed pre-pandemic.
For now, it has a lot to do with a shortage of materials that manufacturers need to make these things. When supply is low, prices climb for manufacturers, and consumers end up paying more for the end product.
The materials shortage has to do with several factors. The work-from-home economy placed unprecedented pressures on companies that both struggled to estimate demand and halted factory production for safety reasons. And as imports have picked up speed on the back of surging, unpredictable consumer behavior, US shipping ports have become unusually congested. February’s Texas Freeze compounded these problems, suspending the oil sector and the manufacturers who rely on it.