The Global Supply Chain Pressure Index worth following

 

The New York Fed Global Supply Chain Pressure Index (GSCPI) is a good way to look at the driver that affect supply pressure shocks on inflation. The numbers exploded after the pandemic began and got worse during the second COVID wave and is still at high levels versus spring of 2020. The numbers have come off the 4 standard deviation peaks, but there the decline has now plateaued. For more details see the NY Fed May 2022 paper #1017 "The GSCPI: A New Barometer of Global Supply Chain Pressures". 

The following graphs provide insights on the areas which have had the greatest impact on the recent GSCPI. The China lockdown is having a global effect. The color graphs show the impact of supply chain, oil supply, and oil demand on US PPI and CPI and Euro area PPI and CPI. Oil supply and demand have had a more variable impact on inflation, but supply chain price pressures have been consistent over the last two years.

The bottom-line is that if this global supply chain index declines, we will see an appreciable impact on the PPI and CPI indices.