Fed predicts shortages from nurses to chips and containers

The Federal Reserve is seeing a lot more shortages across the U.S. economy, in ways that might be construed as early warning signs of inflation if they persist.

In the Fed’s “beige book” report released Wednesday, the central bank mentions the word “shortage” or “shortages” 31 times, the most going back at least a decade. That’s a jump from 19 in the January edition and more than triple the average number of citations in the eight reports issued since the survey’s first reference of the coronavirus in March 2020.

The thought of shortages struck fear in the minds of American consumers when the pandemic first hammered the economy, prompting panic-induced sprints for lockdown life’s essentials - from backyard pools and bikes, to toilet paper and disinfectants. A year later, the Fed’s mentions are more frequent but in calmer economic terms.

Their latest regional radar is dotted with mentions of crunches in global supply chains for tech equipment. There are nine references to shortages of semiconductors - the memory chips made mostly in Asia that go into cars, home appliances and more. That’s up from zero such mentions in the January report.

The U.S. economy has contended with pockets of labor shortages for the better part of a decade, and prepandemic Beige Books often mentioned the need for more well-trained workers. While that has not changed much - 15 of the 31 mentions of shortages referred to challenges finding labor such as truck drivers and construction workers - the Atlanta Fed observed a need for another skilled position: nurses.