Producer cost pressures still rising

<p>Kia ora, </p><p>Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news costs seem to be rising steeply everywhere now, far from any 'transitory' indications.</p><p>The rise, rise and rise of shipping container freight hit a new milestone this week, with the <a href="https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry" target="_blank"><strong>global average exceeding US$10,000 for the first time</strong></a> for a 40ft unit per journey. That is three times higher than a year ago. All this cost is outbound from China's ports. Going the other way into China it is surprisingly cheap.</p><p>For some key commodities the overnight movements were very mixed. Aluminium and coal rose again, natural gas prices hit a seven year high overnight, but iron ore and wheat fell again. In the case of iron ore, that is down to a 13 month low.</p><p>In the US, the initial jobless claims <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20211631.pdf" target="_blank"><strong>reported</strong></a> for last week fell to 284,000, and lower than the week before. There are now 2.6 mln people on these claims, the lowest level since the start of the pandemic. But some of this recent decrease is because of expiring qualifications rather than them moving off to work. That may have involved about 50,000 people last week. Only ten states now have benefit extensions in place.</p><p>There were Fed officials out speaking or being interviewed overnight (Williams, Bowman, Bostic, Bullard, Kaplan) and their message seemed to be that they are still likely to taper their bond buying program in 2021.</p><p>In China, and consistent with a slowing domestic economy, <a href="http://www.stats.gov.cn/tjsj/zxfb/202109/t20210909_1821859.html" target="_blank"><strong>consumer inflation fell</strong></a> to under +1% i