Scoring Boxes
Average Hourly Earnings by Industry
(% Change, December 2020-2021) (Total Private Prior Business Cycle = 2.4%/yr)
behavior in 2020. The quit rate for 2021 has jumped to a record high of 26%, as trended in the chart at the top of page 4. Currently, inflation is growing faster for producers than for consumers. The producer price index for December was 9.7% higher than in the prior December, compared to the CPI’s 7% growth over the same period. The bottom chart on page 4 shows this trend and illustrates how higher producer prices end up costing consumers more over time. The top chart at right shows average hourly earnings by industry for December 2021. Total private employee wages are now growing at 4.7%, nearly double the 2.4% growth rate over the last economic cycle. The manufacturing sector now reports the largest number of unfilled job openings on record. While the growth rate varies by industry, independent box converters can anticipate that their customers will be facing pressures much like those currently being felt in the corrugated industry. Historically low wages in the leisure and hospitality sector are the prime driver for the most rapid rise in their earnings. Wages in the manufacturing sector, which has the largest share of corrugated consumers, have been growing at a 4.4% rate, almost twice the average growth rate as during the last business cycle. The middle chart at right expands on the overall 9.7% rise in the PPI in December 2021 to show the range of growth of some key commodities and products. Recycled paper has increased the most but is a good example of a commodity whose price can change rapidly, depending on market pressures. The final chart depicts the high growth rates of selected consumer products. Gasoline’s hefty increase from December 2020 reflects the comparison to the many fewer miles traveled in the prior year. To sum it up, inf lation will be a top-of-mind issue for consumers and corrugated converter customers for the
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BOXSCORE March/April 2022
Leisure & Hospitali ty Transportation & Whsg
14.10% 5.60% 5.40%
Retail Whol esale Total Private
4.80% 4.70%
Construct ion Manufacturing
4.60% 4.40% 3.30%
Mini ng & Logging Information Technology
2.40%
0.00%
5.00%
10.00%
15.00%
Source: Bureau of Labor Statistics
Change in Producer Prices December 2020-2021 (Overall Change = 9.7%) Recyclable Paper
127.70%
Wheat
55%
Industrial Chemicals
47.90%
Slaughter chickens
46.10%
Plastic Construction Prod
32.50%
Truck Freight
16.30%
Consulting Servi ces
15.80%
Warehousing Serv ices
16.60%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
Source: Bureau of Labor Statistics
Change in Select Consumer Prices
December 2020-2021 (Overall Change = 7.0%) Gasoline
49.60%
Used Vehicles
37.30%
Beef Steaks
21.40%
Bacon
19%
Lodgi ng
13.90%
Furniture
11.80%
Eggs Fresh Seafood Apples Total 0.00% Source: Bureau of Labor Statistics
11% 10.20% 7.80% 7.00% 10.00%
next year and more, as interest rates are set to rise and while supply chain bottlenecks become unclogged. What remains most unclear presently is how much initiatives to tamp down inflation will also weaken overall economic growth.
20.00%
30.00%
40.00%
50.00%
Dick Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or storatre@aol.com.
