Nebraska Furniture Mart Chairman Irv Blumkin says the price of one shipping container has jumped over the past six months to $10,000 from $3,500. Short on containers, his suppliers abroad are out of storage and halting production, exacerbating Blumkin’s order backlogs that are six times as long as they were a few months ago. Broadly, Blumkin says his vendors for all manner of goods and services have increased prices multiple times over the past three months, each ranging from 3% to 8%.
“Is this temporary? I would hope it’s that way. But the reality is that they’re putting surcharges and increases on, and some suppliers here and abroad are sold out for the rest of the year,” says Blumkin, whose grandmother started the company that operates in Nebraska, Texas, Kansas, and Iowa, and sold a majority stake to Berkshire Hathaway in 1983. “It’s the highest rate of inflation I’ve ever seen, except for in the ’70s.”
What is happening at Nebraska Furniture Mart is playing out across America. Yet monetary and fiscal policy remains on autopilot, geared to an economy stuck in recession, as the Federal Reserve’s favorite inflation gauge remains close to its longstanding 2% target. There is nothing to see here, say Fed Chairman Jerome Powell and other key central bankers, contending that inflation figures that have risen are about reopening bursts and comparisons to data gathered during pandemic-driven lockdowns, and will be, in that oft-repeated word, “transitory.”
For business owners and consumers on the ground, official inflation data and policy makers’ commentary are an alternate reality. Inflation is here, say grocery shoppers, home buyers, manufacturers, and retailers who insist that their dollars are buying less. They don’t have the luxury of ignoring the food and energy costs that are backed out of the price metrics preferred by policy makers, and they can’t help but notice the … [ FULL ARTICLE ]