Consumers wait or pay more as businesses struggle with supply

For months, cars were driven sporadically or not at all. So as the economy reopened, when many people grabbed keys and headed out the door to work, shop or visit with friends, an odd thing happened.

Nothing.

Many vehicles didn’t start. Others badly needed service. And while that is good for a mechanic’s business, it has been bad for getting the parts needed to do the work all at once, said Kevin Keller, a Norcross, Ga.-based mobile technician for YourMechanic.com.

Prices are higher and everything has to be ordered early or the job gets postponed — which has happened, Keller said. “Even for simple stuff, like brake pads, I have to be pre-emptive. I need a fuel pump tomorrow for a Dodge Charger. I better have it today.”

The problem — supplies coming up short as demand suddenly rebounds — is widespread. And it means consumers sometimes can’t get what they want right away, or they have to pay more to get it.

Inflation as measured by the U.S. Consumer Price Index soared 5.4% in June from a year earlier, its fastest pace in 13 years. Prices for used vehicles surged 10.5% from the previous month, fueling much of the run-up, amid a global shortage in semiconductor chips used in cars and trucks. But prices on other goods and services also rose sharply last month, from airline fares to apparel.

That worries some economists and businesses, who wonder whether it’s time for the Federal Reserve to lift interest rates and choke off inflation. Pressed on the idea, Fed Chairman Jerome Powell this week told Congress he thinks price spikes will be temporary, but that depends on how long the supply chain’s gears keep grinding.

It is, of course, all about the pandemic.

Fifteen months ago, business closures and stay-at-home orders triggered shortages of consumer products like toilet paper and yeast. Most kinks got straightened out but reopening the economy jangled the supply chains. Like a machine revving up after running in low gear for months, the multitrillion-dollar global supply network has bucked, rattled and run rough.