Global supply stress worsened in April, NY Feds index shows

　　div classBodysc17zpet90 cdBBJodivpBy Howard Schneiderp

　　pWASHINGTON Reuters – Stress on global supply chains worsened in April as coronavirus lockdown measures in China and the war in Ukraine lengthened delivery times, and air freight costs between the United States and Asia rose, the New York Federal Reserve reported in its latest update to a worldwide index of supply problems.pdivdivdiv classBodysc17zpet90 cdBBJodiv

　　pThe rise in the index partially reversed the easing of supply problems seen in the previous four months, and, if it continues, potentially means more persistent inflation even as central banks struggle to control rising prices.p

　　p“This estimate suggests that the moderation we have observed in recent months has been partially reversed, as lockdown measures in China and geopolitical developments are putting further strains on delivery times and transportation costs in China and the euro area,” a team of New York Fed economists wrote about the April release of the regional banks Global Supply Chain Pressure Index.p

　　pThe index incorporates data on shipping costs, delivery times, backlogs and other statistics into a single measure compared to historical norms. It rose sharply in February of 2020, as the coronavirus spread and governments imposed restrictions to contain it, and has remained elevated since. p

　　pThe index was first published in January and will now be released monthly in an effort to track what has become a key issue in the global recovery from the pandemic, and in the efforts of the Fed and other major central banks to curb inflation.p

　　pThe U.S. central bank and some other institutions are already raising interest rates or laying plans to do so in an effort to curb consumer and business demand for goods and services.p

　　pBut they are also hoping supply chains rebound, and the pace of rate hikes and the ultimate level of rates – and the amount of global demand and growth that needs to be trimmed – will depend partly on how fast that occurs.p

　　pThat has thrown a particular focus on whether Chinas strict COVID policies will be relaxed, and if so how fast the countrys output of manufactured goods and industrial products can recover.p

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　　pp Reporting by Howard Schneider Editing by Paul Simaop

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