Import air freight prices have doubled over 2 months.
Import air freight prices only doubled for products coming from Asia. The reason for this is because of a scarcity of flights from Asia to the world, pushing up air freight prices.
What this means is that producers outside of Asia will need to pay a lot more for their imports to produce things. This will increase their cost of production. As a result, the Producer Price Index will go higher and the producers will need to push these costs to the consumer, which will increase the Consumer Price Index for many consumer goods.
This will also have a large effect on the trade deficit as imports rise while exports decline. I expect trade deficits to balloon in May 2020.
Import air freight prices only doubled for products coming from Asia. The reason for this is because of a scarcity of flights from Asia to the world, pushing up air freight prices.
What this means is that producers outside of Asia will need to pay a lot more for their imports to produce things. This will increase their cost of production. As a result, the Producer Price Index will go higher and the producers will need to push these costs to the consumer, which will increase the Consumer Price Index for many consumer goods.
This will also have a large effect on the trade deficit as imports rise while exports decline. I expect trade deficits to balloon in May 2020.
