Crypto News: Supply Lines: Follow the pallets

Demand for shipping pallets in the US isn't as hot as last year, but it's a long way from cold.

"Not awful" was the description used by Howe Wallace, the CEO of Florida-based PalletOne, a large American maker of wooden pallets.

If business in Wallace's industry is any guide, the US economy isn't seeing a sudden cratering in goods orders like might occur before a recession.

"Our market is still strong" and "it's a pretty stable market," he said in an interview. "We're still pretty busy. Could we be busier? Yes," but production capacity has been constrained by lengthy shortages and higher costs for key materials despite lower lumber prices, he said.

"The combination of what we've been paying more for labor, more for freight, more for nails — every cost has gone up significantly," Wallace said. "To the extent that wood is cheaper than it was a year ago, everything else is higher so our pricing remains pretty consistent."

Pallets are among several below-the-radar indicators of commerce, like corrugated boxes or railcars loaded with freight. When it comes to physical goods, they can serve as a weather vane for economic activity several weeks before government data are reported.

Conventional wisdom holds that as US consumers spend more on services this year, and as inflation dents their wallets, they'll buy less merchandise. But it's been a mixed picture lately.

Customers "are still going to make sure they have too much compared to running out," Wallace said.

According to Chaille Brindley, editor of the Pallet Profile, demand remains strong. "Pallet manufacturers and recyclers remain very busy. Many are worried about a downturn that could be coming. But they haven't seen it materialize yet," he wrote in a market report this month.

Some of these more obscure gauges are currently signaling that the US economy is indeed slowing, while others reflect continued strength — making it tricky for people who monitor supply chains and global trade to predict what happens next.

Check out the full story here.

—Brendan Murray in London

Just in Case | Big retailers rushed to build up inventories last year amid soaring consumer demand and transportation bottlenecks — going so far in some cases as to rent their own cargo ships. Now, they're trying to figure out how to sell all that stuff. Inventories rose $44.8 billion for companies on S&P consumer indexes with a market value of at least $1 billion that reported earnings over the last two weeks, according to data compiled by Bloomberg. That's up 26% from this time last year. The glut dented profits at some retailers, with Walmart paying more for storage and Target and Gap cutting prices. (Click here for the full story.)

Trading barbs | Chinese Foreign Minister Wang Yi mocked President Joe Biden's wide-ranging economic framework for failing to lower tariffs, in some of the strongest criticism yet of the US plan to counter Beijing's influence in Asia.
End in sight | China's factories still struggled in May, but a slower pace of contraction suggests that the worst of the current economic fallout may be coming to an end. Separately, Japan's factory output dropped in April for the first time in three months.
Europe's inflation | German inflation hit another all-time high on surging energy and food costs, adding urgency to the European Central Bank's exit from crisis-era stimulus after numbers from Spain also topped economists' estimates.
Retaining the title | Toyota looks poised to repeat as the world's largest automaker for a third straight year, having outsold Volkswagen by more than 1 million vehicles through April.
Running low | Sri Lanka is recommending airlines carry enough jet fuel to last return trips or fill up elsewhere, as the island grapples with a shortage of everything from oil to food due to a foreign-exchange crisis.
Energy rush | Oil headed for the longest run of monthly gains in more than a decade as European Union leaders agreed to pursue a partial ban on imports of crude from Russia while China further eased anti-virus curbs. Brent crude topped $123 a barrel, a two-month high.

Road to recovery | Shanghai's relaxed Covid restrictions and relief package could mark the start of a recovery in China's economy. But it will be a long haul, according to Bloomberg Economics.
Summer of shortages | The potent mix of holiday driving, warm weather, and supply shakeups are a recipe for surging energy demand, raising the specter of power shortages, according to Bloomberg Intelligence.
Use the AHOY function to track global commodities trade flows.
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