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Manufacturers in the central region of the United States expect the prices of their products to expand at a faster rate over the next six months, a survey from the Federal Reserve Bank of Kansas City showed Thursday.

The Tenth District manufacturing survey’s index of expected price increases six months from now jumped to a seasonally adjusted 67 percent from December’s read of 53 percent.

That is the highest level in records that go back to 2001.

The percentages are derived from a survey that found that 74 percent of manufacturers expect to raise their prices, 20 percent expect prices to hold steady, and six percent expect to lower prices.

Expectations for inflation of the prices of raw materials also climbed in January, rising to 73 percent from 65 percent in December. Seventy-nine percent said they expect prices to rise.

Eighty-eight percent of manufacturers reported higher prices compared with a year ago and 51 percent said they had raised prices since December, pushing the index up to 49 percent from the prior month’s reading of 46 percent. Seventy-two percent reported paying more for materials, resulting in a slight decline in the index from 67 percent. Four percent of manufacturers said they had lowered their prices and six percent said prices of materials had fallen.

“Purchasing, costs, supply chain are still massive issues… have basically started raising prices on select items to almost extreme levels to intentionally limit or eliminate demand,” one manufacturer told the Kansas City Fed.

The survey covers manufacturing activity in Kansas, Colorado, Nebraska, Oklahoma, Wyoming, the northern half of New Mexico, and the western third of Missouri.

The pace of the expansion of manufacturing activity increased in January, pushing the composite index increased to 24 in January from a revised 22 in December.

“Factory growth was driven more by activity at durable goods plants in January, especially primary metals, machinery, electrical, furniture, and transportation equipment manufacturing,” said Kansas City Fed economist Chad Wilkerson.
But it was not all good news. While the production gauge showed output expanding at a faster pace, demand slowed. The index tracking the volume of shipments dropped to five from 13 and new orders dropped to 14 from 22.

The employment index increased to 24 from 18, but more than half of firms indicated that ten percent or more of their employees were out at some point during the month because of Covid-19.

“Covid-19 isolations and quarantines lead to construction delays for labor shortages, and increased supplier lead times for the same reason,” one manufacturer explained.

 

Supplier delivery times eased for the second consecutive month, a signal that supply chain bottlenecks may be clearing up.

The prices of products manufactured in the U.S. central Atlantic region rose in January at the fastest annual pace recorded in data that stretches back twenty-five years, according to a survey from the Federal Reserve Bank of Richmond released Tuesday. Manufacturers say they expect to raise their prices 5.97 percent over the next six months, an increased pace of inflation from December’s Richmond survey.

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Report: Joe Bidens Globalists Quietly Fight to Slash U.S. Tariffs on China

Economic globalists embedded in President Joe Biden’s administration are quietly fighting to cut United States tariffs on China-made products, first imposed by former President Trump, despite opposition from America’s union workers.

In recent weeks, Biden has said his administration is reviewing potential cuts to Section 301 tariffs on billions of dollars worth of China-made products. The tariffs have long been applauded by labor unions for helping boost U.S. wages and American manufacturing.

An exclusive report from Reuters details how Treasury Secretary Janet Yellen is leading the charge within the Biden administration to cut U.S. tariffs on China. U.S. Trade Representative Katherine Tai, an economic nationalist, is trying to stave off cuts to tariffs.

Reuters reports:

President Joe Biden will have to resolve a heated internal debate among his aides over whether to cut taxes on goods from China as his administration tries to battle inflation, according to two U.S. officials and three other people familiar with the conversations. [Emphasis added]

U.S. Treasury Secretary Janet Yellen is among those who want to slash many of these tariffs, while U.S. Trade Representative Katherine Tai wants to hold off for a broader China trade strategy that addresses protecting U.S. jobs and China’s behavior in global markets, sources say. This approach could even include new strategic tariffs. [Emphasis added]

Yellen believes some of the tariffs are not in the U.S.’s economic interest and cost consumers irrespective of the inflation argument, according to a person familiar with the discussions. [Emphasis added]

The Chamber of Commerce is likewise lobbying Biden to cut U.S. tariffs on China and re-enter negotiations for free trade deals with foreign countries.

Meanwhile, Sen. Josh Hawley (R-MO) sent a letter to Tai urging that cutting U.S. tariffs is a “misguided policy proposal” that would amount to a “strategic blunder” for the American economy and the nation’s workforce.

“To cut tariffs at this juncture would be a strategic blunder. Not only would it reward China for its latest act of deceit, but it would give them a green light to do so again in the future,” Hawley wrote to Tai.

Last week, Ohio GOP Senate candidate J.D. Vance called out Biden officials like Yellen for attempting to preserve their “managed decline” of the American economy by cutting U.S. tariffs on China.

“… unfortunately far too many Republicans and of course the entire Democrat party that’s gotten rich off the way we do business with China, this is one of the things,” Vance said. “… you know managed decline is bad for normal Americans but it’s actually pretty good if you’re one of the people who’ve profited from the decline.”

Already, the Biden administration has eliminated U.S. tariffs on more than 350 China-made products — a major win for multinational corporations that have long outsourced manufacturing to China.

From 2001 to 2018, U.S. free trade with China eliminated 3.7 million American jobs from the economy — 2.8 million of which were lost in American manufacturing. During that same period, at least 50,000 American manufacturing plants closed down.

Those massive job losses have coincided with a booming U.S.-China trade deficit. In 1985, before China entered the WTO, the U.S. trade deficit with China totaled $6 billion. In 2019, the U.S. trade deficit with China totaled more than $345 billion.

Meanwhile, a study from 2019 found that permanent U.S. tariffs of 25 percent on all Chinese imports would create more than a million American jobs in five years. American manufacturing is vital to the U.S. economy, as every manufacturing job supports an additional 7.4 American jobs in other industries.

John Binder is a reporter for Breitbart News. Email him at [email protected] Follow him on Twitter here. 

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