There are more problems for the increasingly problematic economy.
• Gas and diesel prices hit record highs Monday in Oregon and Washington state and are at or near national all-time levels, according to AAA.
• The stock market continued its bearish string of major sell offs Monday after the U.S. posted negative economic growth in the first quarter (-1.4%) and concerns about inflation and the impacts of interest rate hikes aimed at higher prices.
• Grocers, drug stores and consumers are facing serious shortages of baby formula resulting in empty shelves and caps on purchase quantities akin to past pandemic supply troubles such as for toilet paper.
As much as 40% of baby formula brands were sold out at U.S. stores in late April, according to market analytics from Datasembly. Some major stores that do have baby formula in stock are rationing sales.
“Due to increased demand and various supplier challenges, infant and toddler formulas are seeing constraints across the country. Similar to other retailers, we put into effect purchase limits of three per transaction on all infant and toddler formula to help improve inventory. We continue to work diligently with our supplier partners to best meet customer demands,” said a Walgreens spokesperson in a statement.
CVS Health is taking a similar path, limited baby formula purchases to three products in stores and online, according to spokesperson Tara Burke.
Target is limiting baby formula purchases to four items. A number of major grocery chains, who have raked in major profits during the pandemic and inflation wave, did not respond to requests for comments about baby formula shortages and rationing.
The scarcity of baby formula is the latest problem for global supply chains which have seen shortages of bathroom tissue, cream cheese, meats, auto parts and vehicles for sale.
There have been some recent major recalls.Abbott Nutrition, which makes major formula brands, issued a recall in February and shutdown production plant in Michigan after a baby died from a bacteria potentially linked to a batch of Similac.
The formula shortages have also resulted in some price gouging online.
Fresh rounds of restrictive coronavirus shutdowns in China — including major ports and economic hubs such as Shanghai — are also poised to result in more shortages and higher prices on shelves in Oregon and across the U.S.
The Chinese government shutdowns have resulted in hundreds of cargo ships, logistics centers and productions operations being put in limbo.
There are also concerns about whether the U.S. supply chain which has seen shortages of truck drivers, port workers and frontline warehouse and retail staff to get products on shelves.
Record high gas prices
The U.S. government will release new inflation numbers on Wednesday, May 11.
In March, the U.S. inflation rate was 8.5% compared to a year ago with higher energy and agricultural costs magnified by U.S. sanctions on Russia and other impacts of the war in Ukraine.
The Federal Reserve Bank raised its baseline interest rate by a half-point May 4 after a previous quarter-point hike. The hikes aim at the highest U.S. inflation rates since 1981 but could also slow lending including for mortgages.
Gas prices and diesel fuel prices both hit all-time records in Oregon on Monday, according to AAA’s Fuel Gauge Report.
The average price of gas in Oregon is $4.81 per gallon. Diesel fuel — which is key to farmers, truckers and other businesses — averaged $5.60 per gallon. Those are both record highs, according to AAA.
The state saw record fuel prices in late March after a spike in crude oil prices. Gasoline in some southern Oregon counties is now at or near $5 per gallon.In California, gas prices are approaching or more than $6 per gallon.
Washington state also posted all-time record highs for diesel and gas prices. AAA reports the average prices in Washington average $4.83 per gallon for gasoline and $5.70 per gallon for diesel.
Nationally, gas prices are poised to surpass a record high of $4.33 per gallon set in late March. Diesel prices did set a new record Monday of $5.54 per gallon, according to the auto club.
Stock market growls
Investors are also feeling the current economic pain.
The Dow Jones Industrial Average closed down 653.67 points Monday. The Dow is down 4,300 points this year or 11.8%. The S&P 500 was also down 3.2% Monday. The U.S. stock index is down 16.9% this year.
President Joe Biden is expected to talk about inflation Tuesday as the economy is poised to vex Democrats in the midterm elections.
The U.S. economy created 428,000 jobs in April, according to the U.S. Bureau of Labor Statistics. That surpassed economists’ expectations of 380,000 jobs being added last month.