The Federal Reserve Bank of New York this week said stress on the world's beleaguered supply chains had finally returned to normal—below normal, in fact.

Not so fast, responded a professor at the top-ranked U.S. university for supply-chain management.

After the New York Fed's Global Supply Chain Pressure Index (GSCPI) was posted Monday with a reading of -0.26, sinking below the zero level that's consistent with the historical average, Michigan State University (MSU) associate professor Jason Miller said in an email that it's wrong to declare an all-clear and cited other evidence:

  • The Bank of Canada's business-outlook survey for the fourth quarter of 2022, which showed some businesses said price adjustments related to previous supply disruptions continue to filter through their supply chains.
  • The Philly Fed's manufacturing survey for December, which found that 45 percent of respondents said supply-chain issues moderately or significantly constrained capacity use.
  • The U.S. Census Bureau's quarterly survey of plant use, which showed that issues relating to insufficient supply of materials were still about three times worse in the third quarter than before the pandemic, despite some betterment.
  • Institute for Supply Management data showing commodity shortfalls for some products including semiconductors running in excess of 25 months.

The field of economics prides itself on a rigorous peer-review process, and the data used to reach conclusions is often the starting point for such discussions. So it's worth pointing out that some of Miller's examples lag New York Fed inputs by a few months. Could, therefore, this debate be a comparison between Miller's older apples and the central bank's newer, more normal-looking ones?

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