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Should Joe Biden be concerned about higher wood prices?

WASHINGTON – If a tree falls in a Canadian forest and a logger has to drive 16 hours to pull it out, will it ruin the US president’s economic agenda?

That improbable question may be on the minds of some in Washington, as rising timber prices to used cars to corn kernels have become a troubling signal for President Joe Bai. Dane after the economic outbreak and Democrats of Congress are waiting to keep power.

Consumer demand soared due to Covid-19 limitations, some were declining, but supply chains struggled to keep prices up and leading to shortages.

Government data since April showed disappointing job growth and unexpected surge in consumer prices. Basic commodities such as copper and iron ore are at all times the highest levels. Gas prices are at $ 3 a gallon and analysts have warned of a gas shortage even before the shutdown of a major gas pipeline in recent days. And a shortage of computer chips has forced manufacturers to halt cars, home appliances and more.

Add it all, and some economists, such as Clinton̵

7;s Treasury Secretary Larry Summers, worry the country is on the verge of experiencing rapid inflation for the first time since the 1970s, when rising costs drove wages and wages. People’s savings fell and helped. Overthrow President Jimmy Carter

“Inflation is a key factor in American politics,” said Democratic strategist Chris Kofinis. “It doesn’t matter which side you are, it destroys you.”

So far, price hikes have been largely industry-specific. Lumber this month hit an all-time high of $ 1,686 per thousand board feet, up 406 percent from $ 333 per thousand board feet traded at the same time last year; and 438 percent of prices five years ago

Just as a country is leaving the epidemic forest, it is running out of timber. The price has tripled, and some creators have had trouble finding it at all. The low plywood was so valuable that workers had to lock and lock it in after a burglary.

In the British Columbia forest, which spans two-quarters of America, logger Chace Barber feeds his seemingly insatiable demand with a 16-hour drive to pull logs, which he won’t be bothered by when prices go down.

“I can’t find a log trailer for sale anywhere. I have two trucks that I want to haul and I can’t find the trailer anywhere. You talked to the manufacturer and they say there are years and years – wait a minute. “And you can’t find any lumberjack driver who can and want to drive a lumberjack already drives a lumberjack.”

Customers load lumber at a Home Depot store in Pleasanton, Calif. On Feb. 22.David Paul Morris / Bloomberg via Getty Images file

The barber, who has become a timber influencer with more than 300,000 followers on TikTok, has gained more attention in the industry, with more and more people asking how he could break into it, though, he warned. That wood’s fortune is not really a worker’s deceit.

On the other side of the supply chain, builders have to deal with rising costs and unreliable supplies, which they say now add up to $ 36,000 to new home prices.

Home prices have already soared due to a long housing shortage – fewer homes are now sold out than they have been in the past decade, and besides wood, things like insulation garage doors and windows are priced. Too high or open Orders reversed for several weeks as manufacturers were able to meet the growing demand.

“The truth is, if it continues, you will see the home building sector slow and come to a halt,” said Jerry Howard, CEO of the National Home Builders Association, who said housing is often the case. Economic health indicator “The problem with wood and other building materials costs is creating the perfect storm for homes that will put us in a recession.”

Lumber’s unprecedented spike prices can be attributed to a number of areas specific to the industry.

Construction has never recovered after the Great Recession over the past decade, so the supply chain has shrunk. Add a beetle outbreak in British Columbia, European producers selling to China, and taxes that former President Donald Trump applied to Canadian timber.

Then, early in the pandemic, timber producers cut production into what turned out to be the false assumption that construction would halt with the rest of the economy. But consumers are stuck at home, returning home to renovating, while others decide to move to a new home because they are free to work remotely.

Jared Feltman gathers wood on a forklift at Adams Lumber Co. in Centennial, Colo., On May 4.Hyoung Chang / Denver posted via Getty Images file.

“Covid has added more fuel to the already underworld,” said Thom Rafferty, a merchandise trader at Millbrook Lumber Inc. outside Boston. “It has nothing to do with inflation”

In a parliamentary hearing this month, Commerce Minister Gina Raimondo said she would set the price of timber a top priority.

The creators and others want Biden to eliminate Trump’s tariffs on Canada’s timber, which fell from 20 percent to 9 percent in the final months of his presidency.

“The truth is that record wood prices are making the American dream of home ownership inaccessible to hundreds of thousands of potential home buyers,” said R-Kan Sen. Jerry Moran. Said in the Senate floor last week “American homebuyers, not Canadian lumber producers, pay the bills.”

For now, most economists, including those in the Federal Reserve, think the price hikes are just a temporary malfunction of the economy that puts the idle engine back into gear.

As with the big shortage of toilet paper in 2020, they hope it will come and go without suggesting anything bigger. But no one knows for sure, and much of Covid-19’s economic impact is unpredictable.

“We have had a very unusual impact on our economy,” Finance Minister Janet Yellen told reporters at the White House this month. After an outbreak with so many bottlenecks, I think it’s a bumpy process. ”

Biden is relying on a strong economic recovery to maintain his popularity and agenda as he tries to push through his mega-infrastructure package, partly due to tax hikes. And Democrats in Congress on both sides hope a strong economy will help them stick to the majority in next year’s elections by overcoming the historic tendencies the president’s party tends to. Lost a seat in the middle of the term

But Republicans have struggled to find rising costs to contend with Biden’s infrastructure plans.

“You’re watching food costs go up, you’re watching housing costs, wood there is inflation everywhere,” R-Calif House Minority Leader Kevin McCarthy said after a meeting with Biden at the White House on Wednesday. “So the tax hike will be the biggest mistake you can make.”

Meanwhile, some people, such as Melissa Miller, 38, of Saginaw, Michigan, felt a knot at the grocery store.

“Food prices will kill us,” she said. “Do it or die?”

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