Here are today’s highlights:
Inflation seems to be easing.
Manufacturers are trying to buy steel wherever they can find it.
And now there’s a shortage of paint.
In a time of climate change, a Wisconsin manufacturer of stand-by home generators thieves: “Demand for backup generators has soared over the last year, as housebound Americans focused on preparing their homes for the worst, just as a surge of extreme weather ensured many experienced it. ... The vast majority are made by a single company: Generac, a 62-year-old Waukesha, Wis., manufacturer that accounts for roughly 75 percent of standby home generator sales in the United States. Its dominance of the market and the growing threat posed by increasingly erratic weather have turned it into a Wall Street darling.”
“Generac’s stock price is up almost 800 percent since the end of 2018, and its profits have roughly doubled since June 2020.”
“The company recently opened a new plant in Trenton, S.C. — its third producing residential generators — while demand and pandemic-related supply chain snarls have pushed customers’ wait times to roughly seven months.”
“Ms. Freeman spent $12,400 last year to install a Generac backup generator at her home on Johns Island, a sea island near the Charleston peninsula. The wait — about three months — seemed long. But she was lucky: The wait is twice as long now.” READ MORE
THE COVID ECONOMY
Inflation appears to be easing: “Data released Tuesday by the Bureau of Labor Statistics showed that prices rose 0.3 percent in August compared with July. The August data breaks an eight-month streak of rising or steady inflation — and is a welcome sign for policymakers at the Fed and the White House, who argue that inflation will start to cool down as the economy heals. Their expectation is that as supply chains catch up with consumer demand, prices will land closer to the Fed’s 2 percent annual target for inflation. But there’s still plenty of uncertainty about whether the shift will stick.”
“Over the past year, prices for used cars and trucks have taken up a huge share of inflation, in large part due to chip shortages. Overall, prices for the vehicles are up nearly 32 percent compared with last year. But from July to August, prices for used cars and trucks fell 1.5 percent.”
“Similarly, prices for hotels and motels fell 3.3 percent from July to August. Airline fares fell 9.1 percent over the same period. Even rent, which some economists feared would keep rising as home values soared, rose only 0.3 percent over the previous month.” READ MORE
High prices are forcing manufacturers to look for steel wherever they can find it: “A Midwest steel index calculated by CRU Group estimated prices at $1,940 a ton at the start of September, up from around $560 in September for both 2019 and 2020. A U.S. government index tracking the price of steel and iron nearly doubled in August from the year before, the biggest relative increase since records began in the 1920s. The higher costs are already hitting consumers, especially for products like cars and appliances. Household appliance prices rose by 6.8 percent in August, the highest year-over-year increase in a decade, according to Labor Department data.”
“The rising cost of steel, aluminum and other metals poses another challenge for the $5.9 trillion U.S. manufacturing sector, which has been struggling with a shortage in semiconductor chips, logistics problems and scarce labor.”
“Manufacturers and trade groups that represent them say steel prices are rising because of high demand for manufactured goods.”
“Tariffs on imported steel that were implemented by the Trump administration, and continue under the Biden administration, are also contributing to the higher steel prices ...” READ MORE
The latest shortage? Paint: “A confluence of factors, from an unusual freeze earlier this year in Texas to surging demand to ongoing supply chain issues, has created a paint shortage and a price surge. Customers around the country are finding it tougher to get the paint they want as store owners struggle to keep product on the shelves and meet rising costs from their suppliers. ‘We’ve had multiple price increases across the board from every manufacturer we deal with,’ said Randy Moser, owner of Buss Paints, a specialty store in Emmaus, Pennsylvania, about 53 miles north of Philadelphia in the Lehigh Valley. ‘It’s been this way for a while now, and it seems like it’s not going to get any better over the next three to six months, either.’”
“The deep freeze in the South slowed production of petroleum, a critical ingredient for paint.”
“Shortages of other goods have clogged up supply chains, all while the demand for Chantilly lace, tricorn black and green smoke — to name three of the most popular colors – has abounded.” READ MORE
Fox News has a tougher vaccine mandate than President Biden’s: “In a memo obtained by CNN reporter Oliver Darcy, Fox Corp. human resources chief Kevin Lord bragged that the vast majority of the company’s workforce is now vaccinated after calling upon staffers to input their vaccination status into a company-wide database. ‘Following our request for employees to upload their vaccination status in our secure system, we are pleased to share that more than 90 percent of our full-time employees reported that they are fully vaccinated,’ Lord wrote in the memo. ‘This is important for our company to know as we continue to implement our phased return to office timing and procedures.” Besides boasting of the media giant’s own version of a vaccine passport—the very system the Biden administration has touted in an appeal to vaccine-hesitant conservatives—Lord also announced that Fox Corp. would soon enact an even more aggressive policy than the one President Joe Biden is requiring for private-sector employers.”
“‘Soon we will introduce another important health and safety measure for access to our facilities—daily Covid testing for the small group of employees who are not vaccinated or have not provided their vaccination status,’ he wrote.”
“Biden’s proposed rules require weekly testing.” READ MORE
Amazon is opening dozens of facilities, adding 125,000 workers, and increasing wages: “The tech giant on Tuesday said it has opened more than 250 facilities this year and plans to open another 100 across the country in September, deepening its pool of locations used to store, sort and ship its packages. It said it has lifted pay for workers in such facilities to an average of $18.32 an hour as it seeks to fill those locations and replace workers who leave existing jobs. That follows a move in April to increase wages between 50 cents and $3 an hour for more than 500,000 employees.” READ MORE
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THE 21 HATS PODCAST
Episode 76: Our Best New Accounts Are Coming Through LinkedIn: This week, Stephanie Stuckey talks about how she’s been winning her biggest retail accounts for Stuckey’s candies without a sales pitch. She also explains her latest manufacturing snafu, which she calls, “the case of the squishy pecan log rolls.” Laura Zander, meanwhile, tells us about the supply chain challenges she’s faced getting products from China, Vietnam, and South Africa. Plus, she talks us through how her latest price increases have resulted in a doubling of orders.
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If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren