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U.S. manufacturing activity slowed in October, with all industries reporting record-long lead times for raw materials, indicating that stretched supply chains continued to constrain economic activity early in the fourth quarter, Bloomberg News reported. The Institute for Supply Management (ISM) survey on Monday also hinted at some moderation in demand amid surging prices, with a measure of new orders dropping to a 16-month low. Still, demand remains strong as retail inventories continue to be depressed, which should keep manufacturing humming. According to the ISM, "companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand." The government reported last week that the economy grew at its slowest pace in more than a year in the third quarter because of widespread shortages tied to the COVID-19 pandemic. "Stress in U.S. supply chains isn't abating, lending downside risk to our forecast for GDP growth in the near term and a clear upside risk to the forecast for inflation," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. The ISM's index of national factory activity slipped to a reading of 60.8 last month from 61.1 in September. The ISM reported 26 commodities were in short supply in October, some for as long as 13 straight months. That compared to 24 in September.

With inflation at its highest point in three decades, the Federal Reserve is set this week to begin winding down the extraordinary stimulus it has given the economy since the pandemic recession struck early last year, a process that could prove to be a risky balancing act, the Associated Press reported. Chair Jerome Powell has signaled that the Fed will announce after its policy meeting Wednesday that it will start paring its $120 billion in monthly bond purchases as soon as this month. Those purchases are intended to keep long-term loan rates low to encourage borrowing and spending. Once the Fed has ended its bond purchases by mid-2022, it will then turn to a more difficult decision: When to raise its benchmark short-term rate from zero, where it’s been since COVID-19 hammered the economy in March 2020. Raising that rate, which affects many consumer and business loans, would be intended to make sure inflation doesn’t get out of control. But it would carry the risk of discouraging spending and undercutting the job market and the economy before they’ve regained full health.

Supermarket chains are revamping their operations to navigate persistent product shortages, expanding storage space and curbing discounts to make sure they don’t run out, the Wall Street Journal reported. Companies are planning for shortages of popular brands of food and staples to continue for months and managers are trying to keep up as different products run short from week to week, industry executives said. While food supplies overall remain plentiful, Nutella spread, Prego pasta sauces and Pringles chips are among many items that have been tough to secure in recent weeks, some supermarket companies said. Lunchables snacks and Capri Sun drinks have been hit-or-miss for months. “The fact is, it’s like whack-a-mole,” Vivek Sankaran, chief executive of Albertsons Cos., said on a conference call recently. “On any given day, something is out of stock in the store.” Ferrero U.S.A. Inc., the maker of Nutella, and Pringles producer Kellogg Co. said they have seen heightened demand for their products. Campbell Soup Co. said it is increasing production and looking to hire to meet demand for Prego sauces. Kraft Heinz Co. said that orders for Lunchables and Capri Sun are exceeding expectations and that it is accelerating investments to increase production. Some packaged-food makers, struggling with stretched staffing and hard-to-find raw materials, are limiting shipments of products, companies said. In response, grocery buyers, who are in charge of planning and coordinating orders, are spending more time tracking down vendors, managing trucks that arrive late and searching for substitutes for out-of-stock items. Food retailers are buying extra inventory whenever they can, ordering items months earlier than usual and sending their own trucks directly to manufacturing plants to make pickups and speed up delivery times.

Small businesses are having increasing difficulty finding job candidates with the skills they need, a new survey found, the Washington Examiner reported. The U.S. Chamber of Commerce and MetLife survey reported that 49% of small businesses now say they are struggling to find qualified workers, a number that is up sharply from June, when 34% said the same. Additionally, 46% said it is either somewhat hard or very hard to find candidates with the right amount of experience, up from 35% in June. Small businesses also reported double-digit increases when asked about difficulty finding enough talent to fill open positions and their ability to compete for candidates with larger businesses in their area.

The city of Boston has set aside $5 million in emergency funds to help local homeowners avoid foreclosure, the Associated Press reported. Eligible residents can apply for assistance under the program, which is open to local residents who are at least 90 days behind on payments and who meet income guidelines. Boston Mayor Kim Janey announced the program Thursday, saying it was an effort to address pandemic-related job losses and the local residents who are now struggling to make ends meet. The city is working with local non-profit agencies to oversee the fund. Recipients will also be offered foreclosure counseling to help them learn how to avoid the risk of foreclosure in the future. “The pandemic has exacerbated inequities in our city, and highlighted the importance of safe, stable housing,” Janey said in a statement. Boston is using federal pandemic relief funds to pay for the program.

The Transportation Department will team up with California to provide billions in loans to strengthen the state’s overwhelmed ports and supply-chain infrastructure, in an effort to prevent a repeat of the bottlenecks that have crippled the flow of goods into and out of the United States, officials announced yesterday, the New York Times reported. Most of the projects will probably take years to fund and complete, a department spokesman said, so the initiative will offer little relief for the supply-chain crisis now gripping the globe. But with potentially more than $5 billion in loan money on offer, officials say the investment is a necessary step to bolster the state’s aging infrastructure. The loans could be used to upgrade ports, expand capacity for freight rail, increase warehouse storage and improve highways to reduce truck travel times. The Transportation Department will provide some of the loan money through its own programs, while also working with the California State Transportation Agency to identify other financing opportunities. Backlogs of ships at ports and shortages of shipping containers, truck drivers and warehouse workers have aggravated the delivery delays and rising prices that began when coronavirus outbreaks shut down factories around the world even as demand for goods spiked. The Biden administration moved this month to nearly double the hours that the Port of Los Angeles is open, shifting to a 24/7 operation.