About this Video

• Video Title: Anna Wong: Empty Shelves Are Coming Soon | Odd Lots
• Channel: Bloomberg Podcasts
• Speakers: Joe Weisenthal, Tracy Alloway, Anna Wong
• Duration: 00:23:50

Introduction

This Odd Lots podcast episode discusses the potential for empty shelves in the US due to the impact of tariffs on goods imported from China. The hosts interview Anna Wong, Bloomberg's chief US economist, who analyzes data indicating a significant drop in container bookings and imports, leading to concerns about inventory shortages for the upcoming holiday season.

Key Takeaways

• Plummeting Container Bookings and Imports: Data shows a sharp decline in container bookings and imports from China and South Korea to the US, particularly impacting goods crucial for the holiday season.
• Imminent Risk of Empty Shelves: Due to the timing of these declines and the implementation of tariffs, there's a high probability of empty shelves and reduced product variety during the upcoming holiday season.
• Tariff Impact on Prices: Analysis of import prices (PPI and CPI) shows that the tariffs have largely been passed on to US importers, with some limited pass-through to consumer prices. However, a significant portion is absorbed by wholesalers and distributors, potentially affecting profit margins.
• Economic Consequences of Squeezed Margins: Squeezed profit margins due to tariffs lead to slower investment, reduced hiring, potential layoffs, and increased unemployment. The economist predicts unemployment rising to 4.8% by year's end and peaking at 5.3% the following year.
• Uncertainty Drives Order Cancellations: The high uncertainty surrounding future tariff policies is causing businesses to cancel orders to mitigate potential losses from further tariff increases.

To answer your question, we need to examine the transcript for Anna Wong's analysis of PPI and CPI and compare it to any mention of previous predictions.

Anna Wong states that data up to March shows that most of the Chinese tariffs have been fully borne by the US side, passed through to US importers at the border. Looking at PPI (Producer Price Index) data, she notes a positive correlation between tariff shocks and price increases, indicating some pass-through to PPI but not 100%. However, from PPI to CPI (Consumer Price Index), the pass-through breaks down, and there's limited evidence of it showing up in consumer prices. In fact, she observes a negative correlation between China-exposed goods and CPI changes, indicating deflationary pressure. This is attributed in part to China's own deflationary spiral and competitive domestic pricing.

The transcript does not explicitly detail previous predictions about the impact of tariffs on inflation. Therefore, a direct comparison cannot be made based solely on the provided text. The transcript only mentions that a year ago, people were talking about the impact of tariffs on inflation in the abstract, but no specific predictions are given for comparison with Wong's analysis.