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Durable goods make up ~20% of the US economy at best (~12.7% on average according to the Cleveland Fed [1]). Food, energy, & financing are >50% of the US econo

Durable goods make up ~20% of the US economy at best (~12.7% on average according to the Cleveland Fed [1]). Food, energy, & financing are >50% of the US economy. The rest of the economy is primarily services - which have very little impact from the supply of screws & toasters coming out of China going down. [1] https://www.clevelandfed.org/en/newsroom-and-events/publications/economic-trends/2012-economic-trends/et-20120706-durable-goods-consumption-and-gdp.aspx#:~:text=Relative%20to%20nondurables%20and%20services,over%20the%20past%2030%20years https://www.clevelandfed.org/en/newsroom-and-events/publicat....

chii 5y ago
most services require some material goods associated with the service. Even if wages aren't raised, those materials would cause prices to rise.
- onlyrealcuzzo 5y ago
  The vast majority of "services" in the US are healthcare, food services, technology, and financial services. Aside from cloud hardware, the impact on the rest due to supply constraints from China has been extremely minimal. Very little food comes from China. Almost 0 energy. And financing costs are 100% set by the Fed. China plays a very small part in the US inflation story.
  - deleted 5y ago
    [deleted]
  - chii 5y ago
    > "services" in the US are healthcare, food services, technology, and financial services. with the exception of financial services, all of the other services you listed require commodity materials to work - things like food services require utensils, plates, napkins, not to mention the food. Healthcare has a lot of materials (not just the direct, but indirect materials like reagents for labs and diagnostics) which often come from overseas rather than locally produced. As for technology, it's such a broad area that i dont know what to say about it but at least for compute, there's a lot of shortages of commodity hardware recently. Not saying that all of the shrinkage and inflation is caused by the supply chain slowdown from china, but a large percentage of it is. The rest is from labour shortages.
    - onlyrealcuzzo 5y ago
      Utensils and napkins are a rounding error on restaurant costs.
  - dragonwriter 5y ago
    > Very little food comes from China. Food per se may not come much from China, industrial food production is as exposed to supply chain issues involving China as anything else.
gumby 5y ago
> The rest of the economy is primarily services - which have very little impact from the supply of screws & toasters coming out of China going down. That feels intuitively correct to me, but I’d like to see some data. For example the shampoos and ointments and such used in hair and nail salons all comes from China. OTOH essentially all restaurant food is domestic.
- onlyrealcuzzo 5y ago
  The shampoo used in a hair salon is maybe 10% of the price you pay. The rest is labor, rent (finance), debt (finance), utilities (energy). The vast majority of traditional services have ~50% of revenue going directly to labor.

chii 5y ago

most services require some material goods associated with the service. Even if wages aren't raised, those materials would cause prices to rise.

onlyrealcuzzo 5y ago
The vast majority of "services" in the US are healthcare, food services, technology, and financial services. Aside from cloud hardware, the impact on the rest due to supply constraints from China has been extremely minimal. Very little food comes from China. Almost 0 energy. And financing costs are 100% set by the Fed. China plays a very small part in the US inflation story.
- deleted 5y ago
  [deleted]
- chii 5y ago
  > "services" in the US are healthcare, food services, technology, and financial services. with the exception of financial services, all of the other services you listed require commodity materials to work - things like food services require utensils, plates, napkins, not to mention the food. Healthcare has a lot of materials (not just the direct, but indirect materials like reagents for labs and diagnostics) which often come from overseas rather than locally produced. As for technology, it's such a broad area that i dont know what to say about it but at least for compute, there's a lot of shortages of commodity hardware recently. Not saying that all of the shrinkage and inflation is caused by the supply chain slowdown from china, but a large percentage of it is. The rest is from labour shortages.
  - onlyrealcuzzo 5y ago
    Utensils and napkins are a rounding error on restaurant costs.
- dragonwriter 5y ago
  > Very little food comes from China. Food per se may not come much from China, industrial food production is as exposed to supply chain issues involving China as anything else.

gumby 5y ago

> The rest of the economy is primarily services - which have very little impact from the supply of screws & toasters coming out of China going down. That feels intuitively correct to me, but I’d like to see some data. For example the shampoos and ointments and such used in hair and nail salons all comes from China. OTOH essentially all restaurant food is domestic.

onlyrealcuzzo 5y ago
The shampoo used in a hair salon is maybe 10% of the price you pay. The rest is labor, rent (finance), debt (finance), utilities (energy). The vast majority of traditional services have ~50% of revenue going directly to labor.