After initially shutting down factories and stores, the pandemic sparked demand for goods as home-bound consumers funneled stimulus money into shopping sprees rather than trips and dining out. But supply snarls continue to hamper producers, Reuters reported. Earlier this week, the world's No.4 carmaker Stellantis told investors that raw materials like metals would remain a problem for the industry this year. But the company said that the semi-conductor shortage, which cost the company about 20% of its planned production last year, peaked in the third quarter. A key question for economists now is to what degree inflation coursing through the economy is becoming a circular force, with higher prices at gas pumps and grocery stores fueling demands from workers for higher wages, adding again to pressure for more price hikes. U.S. consumer prices rose at their fastest annual rate in four decades in January. For now, it remains unclear whether a spiral will be averted, though most Federal Reserve policymakers remain optimistic that inflation will ease as supply chains untangle later this year and into next, although Russia's invasion of Ukraine may complicate the central bank's efforts to rein in inflation this year.
