Install the Sina Finance client to receive the most comprehensive market information at the first time →[download link]
Original title: March CPI continued to hit a 40-year high
Wang Yinggui, a special writer for 21st Century Business Herald The core consumer price index after energy and energy rose 6.5%, the fastest increase in a 12-month period since August 1982. The two indicators reaffirmed that Fed officials’ concerns about inflation are not superfluous.
The minutes of the Federal Reserve’s monetary policy meeting on March 15-16 indicated that the most discussed topics were the uncertain economic outlook, a tight labor market, high inflation and risk factors for economic growth. Among them, the participants spent most of their time discussing inflation, involving labor market, conflict between Russia and Ukraine, general rising prices, soaring energy prices, China’s epidemic prevention and control policies, supply chain issues, chip shortages, and other factors from domestic and foreign sources.
Participants believed that U.S. economic growth will slow this year, and reached the following consensus: it is appropriate to raise the target range of the federal funds rate at the March meeting to reduce the stimulus effect of monetary policy; A target range for the funds rate is also necessary; shrinking the Fed’s balance sheet will play an important role in tightening monetary policy, and it should be appropriate to initiate that policy operation at a future meeting (as early as May). On April 5th, Federal Reserve official Lyle Brainard (nominated by US President Biden as the new vice chairman, but not yet formally approved by the Senate) officially said that the Fed will announce the reduction of its balance sheet at its meeting in May as soon as possible. However, it was just a statement of the policy consensus of the participants.
Congestion at U.S. West Coast ports intensifies pressure on global supply chains
The causes of this round of US inflation are more complicated. The Fed officials at the meeting talked more about the tight labor market, the large wage increase, the spread from manufacturing to service industries (such as education, clothing, health care, etc.), and companies must adjust the prices of goods and services; the reason why inflation remains high , because of strong aggregate demand, sharp rise in world energy and commodity prices, and supply chain disruptions; in terms of external factors, the Russian-Ukrainian conflict has made the already deteriorating global supply chain even worse, leading to rising energy, food prices and some industrial products. Economic sanctions will continue to push up prices and lead to higher prices of downstream products; the lack of coordination of global epidemic prevention policies, the surge in cases and blockades in many countries make the bottleneck problem of the world supply chain even more unsolvable.
The problems mentioned by the Fed are relatively macro, and the in-depth understanding of supply chain problems must start from port operations. The largest port on the west coast of the United States is Los Angeles-Long Beach, which undertakes 30% of the export business and 40% of the import business of the United States, making it the largest international trade port in the United States. In October 2021, President Biden called on the Port of Los Angeles to implement a 24/7 operation mode to address the unprecedented congestion of container ships. However, although the port chief administrative officer actively responded to the presidential call, the actual effect was lower than expected. Before the epidemic, there were no more than three container ships waiting to enter the port every day, and most of the time there was no need to wait to enter the port directly; according to the data of the Marine Exchange of Southern California, after the outbreak, on December 8, 2020 Waiting for ships to reach 8, after that there is a slight increase, but it is generally controllable. The number of ships queuing to enter the port after June 2021 has risen sharply, reaching 38 on August 24, 2021, and 77 on October 22, 2022. January 9 to 109 (peak), with 50 still waiting on March 9. It will take time for the Port of Los Angeles to return to normal, and it is now entering a tough phase.
The Los Angeles port has a complex governance structure. Under the one-port multi-enterprise model, solving the congestion problem requires multi-party negotiation. The Port of Los Angeles consists of three major parts: the Port Authority, the Dock Workers Association, and Dock Handling (production) management. Although the Los Angeles Port Authority is a government agency, it operates on a business model, with leasing and shipping services as its source of revenue; the port handling platform is handled by a specialized company, and the container turnover (container delivery and recycling) is specifically responsible for dockworkers. In 2019, the container throughput of the Port of Los Angeles decreased slightly by 1.28% year-on-year, reflecting the impact of Sino-US trade friction on the port business; the throughput of the whole year in 2020 decreased slightly by 1.33%, but rebounded rapidly in the second half of the year (see Table 1 below); 2021 Throughput increased by 15.89%, but the second half was weak. The port authority’s efforts have not completely solved the problem of terminal congestion. According to the latest statistics, from January to February 2022, throughput increased by 3.6% and 7.31% year-on-year respectively. Solving the problem of port congestion requires coordination among various parties, and the adjustment of wages for port workers is particularly difficult.
From terminals, warehousing to distribution centers, the road or rail transport of containers cannot be avoided, and the shortage of truck drivers is one of the most serious challenges. In the 1980s, truck drivers were definitely the best blue-collar jobs: stable income and job security, but today truck drivers are not as financially as they used to be. Except for a few large logistics companies, small and medium-sized logistics companies are struggling. For a novice, 30 cents per mile is a bummer, and for a few seasoned drivers, 70 cents per mile is a reason to hold on. Truck drivers only spend 7-8 hours a day in real sports cars, and the remaining 7 hours either wait (each distribution center has working hours, it is impossible to operate 24 hours a day), or do other work for free, and their actual income drops, it is difficult to Attracting new truck drivers into the industry shows that industry transformation (unmanned driving) has become an inevitable trend.
In other words, the United States does not lack truck drivers, but lacks favorable economic conditions to attract talent. Terminals, warehousing and distribution centers have to work in harmony, and it’s not enough for management to shave off one’s head.
Tariffs push up inflation, U.S. dependence on Chinese goods is difficult to reduce
Despite the severe challenges in the international political and economic environment and the rise of anti-globalization ideology, China’s central position in the global supply chain remains unchanged. Table 2 lists the status of the import and export trade between mainland China and the top 40 countries or regions in the global economy in 2021. In terms of import trade, Mainland China is an important source of imported commodities from these countries or regions; in terms of export trade, Mainland China is also an important market for commodity exports from these countries or regions. In terms of GDP in 2021, the total economic size of mainland China and these trading partners accounts for 98.15% of the world‘s total. It is no exaggeration to say that the global economic integration that has emerged since the early 1990s has achieved a clearer and more detailed division of labor in the world, and has determined a more efficient supply chain system in the world. China’s centrality to global supply chains is the result of the ultimate choice of competitive markets, keeping most of the world‘s economies out of danger of inflation. Any rhetoric or operation that disregards the trend of world economic development and advocates “trade decoupling” will end in failure.
The first phase of the Sino-US economic and trade agreement did not put a stop to the trade dispute between the two countries. On the contrary, the United States continued to restrict high-tech (chip) trade, sanction Chinese companies, and imposed tariffs on about two-thirds of China’s exports to the United States. Some Chinese companies listed in the U.S. have been delisted, and Sino-U.S. relations are still at a historical low. After the signing of the agreement, the global epidemic broke out and the various actions of the US government were superimposed, and the goals of the first phase of the economic and trade agreement could not be achieved. According to a study by the Peterson Institute of International Economics in the United States, based on the trade volume between China and the United States in 2017, China was required to purchase US$380.5 billion in designated goods and services from the United States, but it was actually completed in two years. The amount was less than expected. The United States should correctly take the pulse and adjust its relationship with China from a strategic height, because the relationship between the two countries is the most important bilateral relationship in the world. The trade war fought under Trump’s presidency has slowed down the growth of the U.S. economy and the world economy. Despite inflationary pressures that emerged in April last year, the U.S. Trade Representative’s office only announced on March 23 this year that 352 Chinese goods would be exempted from tariffs. Obviously, if the United States does not adjust bilateral economic and trade relations as soon as possible, inflationary pressure will be difficult to ease in the near future.
The last five years have seen some interesting changes in Sino-US trade. First, China’s exports to the United States recovered to $505.2 billion in 2017. From 2018 to 2021, China’s exports to the US will be 538.5 billion (according to US statistics), 450.8 billion, 434.7 billion and 506.4 billion US dollars respectively. Second, China’s trade in goods imported from the U.S. exceeded $130 billion in 2017. From 2018 to 2021, the trade volume of goods imported by China from the United States was 120.3 billion, 106.5 billion, 124.5 billion and 151.1 billion US dollars, respectively. Finally, the trade balance between China and the United States has narrowed significantly, reaching 375.1 billion, 418.2 billion, 344.3 billion, 310.3 billion and 355.3 billion US dollars in 2017-2021, respectively. However, the U.S. trade deficit with the world has been expanding year by year, reaching $792.4 billion, $870.9 billion, $850.9 billion, $911.1 billion, and $1,078.9 billion in the last five years, respectively. The United States has tried to reduce its dependence on Chinese goods, but it cannot change the dilemma of the growing trade deficit. In the end, it has to choose to import from China, because the overall production efficiency and capacity of Chinese enterprises still surpass those of any other country or region.
Market sentiment is pessimistic, investors focus on earnings
The inflation situation in the United States is not optimistic, and the Fed’s efforts alone are not enough, because the Russian-Ukrainian conflict and Sino-US relations are not under the control of the Fed. With the development of global economic integration, all countries share weal and woe. Inflation has become a common challenge faced by the world, affecting every corner of the world. At present, the global epidemic situation is still severe. The longer the conflict between Russia and Ukraine lasts, the greater the impact on the global supply chain, and the greater the harm of inflation to economic growth.
In addition, investors in the U.S. financial market have begun to worry that inflationary pressures will continue for a long time, and the market sentiment appears pessimistic. Many Wall Street bigwigs predict that the U.S. economy will decline. This week is the first week of the company’s performance in the first quarter of this year, and many heavyweight companies will hand over transcripts: JPMorgan Chase Bank, Delta Airlines, BBBY, a home textile store, and BlackRock (the largest fund management company in the United States) on Wednesday. Companies such as UnitedHealth, Citibank, Goldman Sachs, Morgan Stanley, Wells Fargo and other financial institutions appeared on Thursday. Of course, the focus is on corporate cost management and profitability in an inflationary environment. In other words, how do U.S. companies absorb the cost of inflation? By transferring to the client or self-digesting? Can the company maintain a high level of profitability? How can the top management of the enterprise take the pulse of the future development prospects? An in-depth analysis of the financial reports of listed companies is a compulsory course for investors this month.
海量资讯、精准解读，尽在新浪财经APP
责任编辑：王珊珊