A Huge Change in Personal Spending Helps Explain Supply Chain Bottlenecks

Here's 10 years of the relationship between our consumption of goods and our consumption of services. It explains a lot about why we're experiencing bottlenecks and disruptions. We were simply not prepared for the massive uptick in goods consumption. pic.twitter.com/5bABU3NxeH

— Invictus (@TBPInvictus) November 5, 2021

Personal Consumption Expenditures 1959-Present

As Invictus noted, manufacturers were totally unprepared for this massive shift in spending patterns.

February 2020 vs September 2021

• Services: 10,231 to 10,517
• Goods: 5,555 to 5543

Spending on services since February 2020 is up 2.8%. Spending on goods since February 2020 is up an amazing 21.7%.

The jump in spending on goods is unprecedented dating to 1959.

Moral: Consumers will find a way to spend money no matter what (and government handed plenty of it out in three rounds).