Andrew Husby
BloombergNovember 16, 2022

The improvement in production is particularly apparent for big-ticket items like vehicles, where production since March has run at a faster clip than in 2019, before the pandemic. As inventories rise, prices for new and used cars are likely to ease, with the used-car market likely to see year-over-year price declines by year-end. Output of machinery and aerospace equipment also rose.

Looking ahead, there’s still a chance supply-chain disruptions re-intensify, but conditions are far different than they were last year when goods inflation started to surge. Stimulus has faded, interest rates have rocketed higher, and recession chatter is at a fever pitch. Barring another shock, that means the Fed will be much more attuned to labor-market developments and inflation expectations — which could serve as persistent sources of inflationary pressure — than they’ll be preoccupied with the extreme supply-demand imbalances that drove the initial inflationary wave.