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(NEW YORK) — Inflation has loomed over the U.S. economy like a movie villain, haunting grocery store trips and gas runs. While costs remain much higher than they were a few years ago, those rapid price increases have mostly vanished.

Inflation stands at its lowest level in more than three years, hovering right near the Federal Reserve’s target rate of 2%, U.S. Bureau of Labor Statistics data this week showed.

Not long ago, a once-in-a-century pandemic upended the economy, sending millions nationwide into lockdown and snarling the global supply chain. Meanwhile, trillions of dollars in government support helped Americans spend amid the calamity.

A resulting imbalance between supply and demand sent prices soaring. The Russia-Ukraine war exacerbated the problem, causing gas and food shortages. Within a few years, the massive issue has largely been resolved.

“This was the highest inflation over the longest period that we’ve seen in decades. It was serious,” Claudia Sahm, chief economist at New Century Advisors and a former Fed official, told ABC News.

Here’s what to know about how inflation has come back down:

Repaired supply chain

During the pandemic, factories worldwide shut down. Workers stayed home for fear of getting sick. Freight ships waited off the coast of overwhelmed U.S. ports.

The pandemic clogged the global supply chain, imposing shortages for everything from cars to lumber to exercise equipment. Meanwhile, people stuck at home focused their spending on those exact sorts of products, since COVID-19 shutdowns prevented them from going out to eat or taking a vacation.

When too much money chased after too few products, prices climbed.

“The pandemic was the root of all evil in the economy,” Sahm said.

When lockdown rules were lifted, demand for goods slowed and manufacturers revved up production as workers returned. The nation’s ports loosened up the backlog of container ships, cutting freight prices dramatically and lowering costs for retailers.

Economists disagree over the role that elevated corporate profits played in driving inflation, as some say they account for more than half of the increase in prices while others say they have caused little or none of the hikes.

In some cases, the easing of supply chain blockages took months or even years to work their way through the global economy.

Take car prices, for example. When semiconductor production slowed nearly to a halt, carmakers lost out on a part necessary for production. Car prices skyrocketed, sending many consumers to the used car market. In turn, used car prices soared. So did costs for car repairs and, as a result, car insurance.

“Those have all now unwound,” William English, a professor of finance and former economist at the Federal Reserve, told ABC News.

Interest rate hikes

In response to rising inflation, the Fed embarked upon an aggressive series of interest rate hikes. Beginning in 2021, the Fed rapidly hiked interest rates, eventually putting borrowing costs at their highest level in more than two decades.

In contrast with the supply chain fixes, the interest rate hikes aimed to address the other side of the equation driving inflation: excess demand.

In March 2020, then-President Donald Trump signed into law a $2.2 trillion economic stimulus package, including direct payments of $1,200 and expanded unemployment insurance, among other measures. Months later, in December, Trump enacted a second $900 billion round of government support.

The following year, President Joe Biden signed a $1.9 trillion economic stimulus package of his own, including another round of $1,400 direct payments as well as an expansion of the child tax credit.

The government support helped buoy demand, even as the pandemic posed major challenges for the supply chain and decimated the service economy made up of sectors like restaurants and hotels.

“Now you have money, and nowhere to go and buy things,” said Hernan Moscoso Boedo, an economist at the University of Cincinnati.

By raising interest rates, the Fed made borrowing more expensive for consumers and businesses alike, making it difficult for them to take on loans for big purchases or large investments.

“Over the last few years, we’ve seen less money in the market because of the interest rates,” Boedo said, adding that the reduction of demand has helped ease prices.

Last month, the Fed reversed course, cutting interest rates by half a percentage point and dialing back the fight against inflation. While interest rates remain high relative to recent decades, the landmark shift suggests that the Fed considers the end of the inflation battle to be in sight.

“They’re close to being done,” Boedo said.

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(TAMPA, Fla.) — Hurricane Milton left widespread gasoline shortages across Florida after it made landfall on Wednesday night and cut across the state. The damage exacerbated fuel outages that began before the storm arrived, as millions fled from its path.

Nearly a quarter of the roughly 7,900 gas stations in the state have run dry, petroleum data firm GasBuddy reported Thursday. Oil Price Information Service, or OPIS, another company that tracks the sector, found as much as half of the state’s gas stations lack fuel, Denton Cinquegrana, chief oil analyst at OPIS, told ABC News.

Across Tampa Bay and St. Petersburg, almost two thirds of gas stations are without fuel, according to GasBuddy.

Experts said they expect the gas shortages to persist for days, hamstringing businesses and everyday people as Florida begins to recover from Hurricane Milton.

The delayed return of gasoline in the region owes to disruption at Port Tampa Bay, which says it handles more than 43% of the state’s petroleum imports. Far-reaching power outages will also impede gas service, since gas stations depend on power to pump fuel from storage tanks and deliver it into vehicles, experts said.

“This kind of situation isn’t solved overnight,” Jon Davis, chief meteorologist at Everstream Analytics, told ABC News. “It’s going to take many days to work itself out and get the situation back to normal.”

Port Tampa Bay, which remains closed, appears to have averted serious damage from the storm, the port said in a statement on Thursday morning. However, the port also noted that it continues to face road closures and flood concerns in the surrounding area.

“Some damage was observed to buildings but there has been no significant damage to docks, so far,” said the statement. “We are working with our fuel terminal operators to assess their facilities and learn when they will be able to return to service.”

Port Tampa Bay did not respond to an ABC News request for comment about the extent of damage from the storm.

While the port escaped a disaster that could have hampered fuel supplies in the state for weeks, the ongoing disruption still poses significant challenges for gas delivery in the short term, Jason Miller, a professor of supply-chain management at Michigan State University, told ABC News.

“It does seem we’ve avoided a worst-case scenario,” Miller said.

Depending on the extent of damage at the port, gas stations may come to rely on truck deliveries for the transport of fuel, Miller said. In that case, it would take some time to build up the capacity necessary to overcome the state’s gas outages, he added.

“It’s not a solution that you could implement tomorrow,” Miller said.

The potential return of port operations or the supplemental fuel from trucks would both rely on the state’s roads, some of which were damaged by the storm, experts noted. Such infrastructure may require repairs before gasoline carriers can safely deliver fuel to stations.

“The road issue can get taken care of in the next day or two,” Davis said.

Even if Port Tampa Bay comes back online and trucks join in to aid the recovery, a significant additional problem must first be addressed: power shortages. Gas stations require power to pump fuel from storage tanks into customers’ vehicles, and more than 3.4 million customers are currently without power in Florida, according to the tracking site poweroutage.us.

Port Tampa Bay said on Thursday that it remains without power, which it needs to operate oil terminals that make up a critical step in the supply chain.

More than 50,000 linemen have been pre-staged across Florida to restore power, Gov. Ron DeSantis said Thursday.

“In a perfect world, power comes back quickly,” OPIS’ Cinquegrana said. “I think by early next week we might still see some stations out but for the most part you’ll get pretty close to normal.”

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(NEW YORK) — An escalation of conflicts in the Middle East in recent weeks has triggered a sharp increase in oil prices, raising uncertainty about where costs will head in the final weeks before Election Day.

Oil prices surged about 13% over an 11-day stretch ending on Monday. Prices fell markedly on Tuesday, however, as nearly a week passed without the onset of a widely anticipated Israeli counterattack on Iran.

The rise of oil prices carries potential implications for the presidential election next month. A hike in the cost of crude oil typically raises the price of gasoline, which holds substantial sway over general consumer attitudes, experts told ABC News.

For now, the recent increase in oil prices is not large enough to impact the election, experts said. However, they added, a further spike over the coming weeks could sour consumer sentiment and weaken approval of Vice President Kamala Harris, since her party occupies the White House.

“People use gasoline as a gauge of the economy and how they’re feeling about it,” Denton Cinquegrana, chief oil analyst at the Oil Price Information Service, told ABC News.

“A small change in prices probably won’t move the needle. If the price of a gallon goes up 50 cents, then that gets people’s attention,” Cinquegrana added, noting that such an increase is possible, but unlikely.

At least one expert cast doubt over the impact of even a sharp hike in oil and gas prices, saying it is unclear whether voters would fault Harris for the price spike and, even if they did, whether the few weeks remaining in the campaign affords enough time for higher prices to register with voters.

“People look at the economy over the long term, not the last month,” Jon Krosnick, a professor of political science at Stanford University who studies the relationship between gas prices and political perceptions, told ABC News.

In the aftermath of the Iranian attack on Israel last week, petroleum analysts told ABC News that the resulting spike in oil prices could push up gasoline prices between 10 and 15 cents per gallon. An increase of that magnitude would not affect the election, experts said, since the moderate uptick would do little to irk consumers and diminish their opinion about the nation’s economy.

“I do suspect that prices are going to continue to move higher, but I don’t think it will be significantly higher,” Cinquegrana said. “Unless something really goes haywire, I don’t expect prices to spike ahead of the election.”

A slight increase in gas prices may not matter much to consumers because costs at the pump have eased significantly over the past year, experts said.

Fuel prices have plummeted in recent months due to sluggish demand for gas as the busy summer traveling season has given way to an autumn slowdown. The average price of a gallon of gas is about 15% lower than where it stood a year ago, AAA data shows.

Despite its recent uptick, the price of oil has also fallen from a 2022 peak reached when the blazing-hot economic rebound from the pandemic collided with a supply shortage imposed by the Russia-Ukraine war.

A major escalation of the conflict between Israel and Iran, however, could send oil and gas prices much higher, analysts said, pointing to potentially dire consequences of an anticipated retaliatory strike by Israel against Iran.

While sanctions have constrained Iranian oil output in recent years, the nation asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply.

Intensification of the war could limit Iranian oil production or transport through the Strait of Hormuz, cutting global supply and sending prices upward, some experts said.

“The risk of a wider war in the Middle East has gone up,” Jim Burkhard, vice president and head of research for oil markets, energy and mobility at S&P Global, told ABC News. “There’s the risk of something happening that could lead to higher prices.”

A further surge in oil prices would send gas prices skyrocketing, which could damage Harris’ political fortunes if voters fault the Biden administration for the sudden increase in costs right before they cast their ballots, Carola Binder, an economics professor at the University of Texas at Austin who studies the relationship between gas prices and consumer attitudes, told ABC News.

“If there was a huge increase in gas prices, I could imagine that hurting Harris’ chances,” Binder said. “Consumer sentiment does affect elections.”

Such a forecast drew sharp disagreement from Krosnick, even though his research helped establish an understanding of the political implications of rising gas prices.

Krosnick co-authored a 2016 study in the academic journal Political Psychology that examined the relationship between gas prices and presidential approval rating between the mid-1970s and mid-2000s. The study found that elevated gas prices drove a president’s approval downward. To be exact, each 10-cent increase in the gas price was associated with more than half a percentage point decline in presidential approval, the research showed.

The findings do not shed light on a scenario in which gas prices spike ahead of next month’s election, Krosnick said, noting that his research examined shifts in public opinion over a much longer period of time. Plus, he added, voters may not fault Harris for the Middle East conflict that would drive the potential price increase.

“There isn’t enough time for there to be a sustained change in prices,” Krosnick said. “It takes a while to ripple out to consumers.”

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(NEW YORK) — U.S. hiring surged in September, blowing past economist expectations and rebuking concern about weakness in the labor market. The fresh report marks one of the last major pieces of economic data before the presidential election.

Employers hired 254,000 workers last month, far exceeding economist expectations of 150,000 jobs added, U.S. Bureau of Labor Statistics data showed. The unemployment rate ticked down to 4.1%.

Weaker-than-expected jobs data in both July and August has stoked worry among some economists about the nation’s economic outlook.

Despite an overall slowdown this year, the job market has proven resilient. Hiring has continued at a solid pace; meanwhile, the unemployment rate has climbed but remains near a 50-year low.

“The labor market is still healthy, but we have clearly seen a slowdown,” Roger Aliaga-Diaz, chief Americas economist at investment firm Vanguard, told ABC News in a statement before the new data was released. “Now we are approaching an inflection point.”

The new data arrived two weeks after the Federal Reserve cut its benchmark interest rate a half of a percentage point. The landmark decision dialed back a years-long fight against inflation and offered relief for borrowers saddled with high costs.

Inflation has slowed dramatically from a peak of about 9% in 2022, though it remains slightly higher than the Fed’s target of 2%.

Speaking at a press conference in Washington, D.C. last month, Fed Chair Jerome Powell described the rate decision as a shift in approach as the Fed focuses more on ensuring robust employment and less on lowering inflation.

“This recalibration of our policy stance will help maintain the strength of the economy and the labor market, and enable further progress on inflation,” Powell said.

In theory, lower interest rates help stimulate the economy and boost employment. However, the Fed’s interest rate decisions typically take several months before they influence economic activity. In any case, the soon-to-be released report tracks hiring for September, meaning the majority of the period reflected in the data took place before the rate cut.

Still, the jobs report on Friday held significant implications for further rate decisions over the coming months. The Federal Open Market Committee, or FOMC, a policymaking body at the Fed, has forecast additional interest rate cuts.

By the end of 2024, interest rates will fall another half of a percentage point from their current level of between 4.75% and 5%, according to FOMC projections. Interest rates will drop another percentage point over the course of 2025, the projections further indicated.

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(NEW YORK) — In the final weeks of the campaign, former President Donald Trump and Vice President Kamala Harris have sought to best each other on the all-important issue of the economy, which many voters rank as their top concern.

Both candidates have made manufacturing a centerpiece of their plans, but their respective approaches feature stark differences.

Harris aims to close corporate tax loopholes and throw government support behind the production of critical goods. By contrast, Trump wants to protect domestic manufacturers with tariffs on foreign products while cutting corporate taxes and easing regulations.

Manufacturing accounts for about 10% of U.S. gross domestic product and an even smaller share of the nation’s jobs. But the sector bears outsized importance since the production of essential goods holds national security implications and many manufacturing workers live in key swing states, experts said.

“There’s a belief that manufacturing is special,” Mary Lovely, a senior fellow at the Peterson Institute for International Economics who studies trade policy, told ABC News.

Here’s what to know about where Harris and Trump stand on manufacturing, and what experts think of their respective plans:

Trump: Tariffs and corporate tax cuts

On the campaign trail, Trump talks about tariffs more than just about any other policy proposal. The tax on imports makes up a key part of his plan for revitalizing manufacturing, alongside a lower tax burden for companies that he says would boost production and hiring.

Trump has promised a sharp escalation of tariffs enacted during his first term. Trump has proposed tariffs of between 60% and 100% on Chinese goods. A set of far-reaching tariffs would also include a tax as high as 20% on all imported products.

In theory, a tax on imports would give domestic producers a leg up in competition with foreign manufacturers, Christopher Conlon, a professor of economics at New York University who studies trade, told ABC News.

“His plan is based on the idea that foreign competitors are pricing their products too low and what we need to do is erect a wall of tariff barriers around the U.S.,” Conlon told ABC News.

An escalation of tariffs could expand certain areas of U.S. manufacturing vulnerable to foreign competition, which could result in added jobs at companies protected by the policy, experts said.

The economy added manufacturing over the first few years of his presidency, though the pandemic wiped out much of those gains.

Experts cautioned about a spike in input costs and consumer prices that could end up hindering many manufacturers and hammering household budgets. Evidence indicates that the Trump tax cut did not provide a significant boost for the economy, they added.

U.S. manufacturers of sophisticated products like automobiles and advanced medical equipment often import raw materials. A tariff would likely raise costs for those companies and risk making them less competitive on the global market, Conlon said. While adding jobs at some manufacturers, the policy could cause layoffs at others.

“Nobody seems to have shared that wisdom with the Trump campaign,” Conlon said.

A similar cause and effect applies to prices paid by everyday people for imported goods at the grocery or department store. Broad tariffs on foreign goods would likely force importing companies to raise prices and reignite inflation, experts said.

In a statement to ABC News, the Trump campaign said its manufacturing plan would create jobs and cut taxes.

“President Trump is a businessman who built the greatest economy in American history, and certainly doesn’t need economics lessons from a professor who has never created jobs or built anything in his life,” Trump campaign spokesperson Karoline Leavitt said.

“President Trump successfully imposed tariffs on China in his first term AND cut taxes for hardworking Americans here at home — and he will do it again in his second term. President Trump’s plan will result in millions of jobs and hundreds of billions of dollars returning home from China to America,” the statement added in part.

Harris: Close tax loopholes and provide government support

Harris has proposed a different approach to manufacturing that emphasizes closing tax loopholes for some large corporations and providing government support for high-priority areas within the sector.

The agenda carries over a key part of the strategy undertaken by the Biden administration, which invested billions into manufacturing through a series of measures focused on bolstering key industries.

The Inflation Reduction Act spent hundreds of millions of dollars to boost U.S. production of renewables as the nation pursues ambitious carbon emissions goals and a supply chain less dependent on China. While the CHIPS and Sciences Act infused tens of billions into the production of semiconductors.

“The Biden administration has picked sectors, and in those sectors companies are eligible for assistance,” said Lovely.

Last week, Harris put forward a plan calling for $100 billion investment in manufacturing to further bolster the sector. The policy would prioritize “industries of the future,” such as carbon-efficient steel production and data centers for artificial intelligence, the campaign said in a statement last week.

The Harris campaign said it aims to pay for the investment with a reform of the international tax code that prevents producers from skirting U.S. taxes in a “race to the bottom.”

“The facts are clear: When he was president, Trump lost nearly 200,000 manufacturing jobs and created new incentives for companies to ship American jobs to China. Economists warn if Trump takes power again, his policies will crush American manufacturing jobs, send even more jobs to China, and cost middle class families $4,000 a year. This is a fundamental contrast with Vice President Harris, who is leading an American manufacturing boom – creating jobs right here at home and outcompeting China,” Harris campaign spokesperson Joseph Costello said in a statement to ABC News.

It remains unclear whether the support for manufacturing provided by the Biden administration has yielded significant gains in output or jobs, experts said.

The measures, however, have elicited a burst of factory construction. Spending on manufacturing-related construction surged from $76.4 billion in January 2021 to $238.2 billion in August 2024, U.S. Census Bureau data showed.

The surge in construction marks a positive signal but the critical test will be whether the plants deliver strong output and well-paying, long-term jobs, said Conlon.

“We haven’t had enough time to see if there’s a real effect or not,” he added. “How many chips are getting built by these plants? We don’t know that yet.”

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(NEW YORK) — The Federal Trade Commission is asking a federal judge in New York to block the $8.5 billion merger of Tapestry, the company behind Coach, Kate Spade, and Capri, which controls Michael Kors.

In April, the FTC sued to block the sale, arguing that these brands dominate what’s known as the “accessible luxury” market and that if they combined, consumers would suffer by paying higher prices.

“This has to be the first time the focus of a federal court hearing turned to a $279 Kate Spade tote described as ‘colorful, joyful, feminine, green and white seen on Emily in Paris,” ABC News senior investigative reporter and correspondent Aaron Katersky said on Good Morning America Tuesday.

Tapestry argues the FTC is ignoring the reality of a marketplace, in which consumers have a lot of choices, suggesting it takes a mere stroll through Bloomingdale’s or Macy’s to see Gucci, Kors and Calvin Klein bags fighting for attention.

Michael Kors himself testified last month during a hearing, telling the judge there’s already plenty of competition for handbags, noting that he learned about one brand when he saw a photo of pop superstar Taylor Swift wearing an Aupen bag similar to those made by Kate Spade.

Kors also testified his handbags have “reached a point of brand fatigue” and a lawyer arguing in favor of the merger said it would revitalize the Michael Kors brand, so consumers have yet another choice. The goal, he said, is to sell more handbags to consumers.

The judge took these arguments under advisement and could rule at any time.

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(NEW YORK) — Oil prices climbed more than 3% on Tuesday in the immediate aftermath of an Iranian missile attack on Israel.

The spike in prices is expected to push up the price of U.S. gasoline, experts told ABC News.

Drivers could face a price increase of between 10 and 15 cents per gallon, experts estimated. The national average price of a gallon of gas currently stands at $3.20, AAA data showed.

A further escalation of the conflict between Israel and Iran could send oil and gas prices significantly higher, said Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston.

“Clearly this will have a huge impact on gas prices,” Krishnamoorti told ABC News. “There’s no doubt about that.”

Iran said the attack on Tuesday was retaliation for a wave of assassinations carried out by Israel over the last several weeks targeting Hezbollah leaders. Israel will have a “significant response” to Iran’s attack, an Israeli official told ABC News.

While sanctions have constrained Iranian oil output in recent years, the nation asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply.

Passage through the Suez Canal, another important shipping route for crude oil, could be impacted by further attacks, as happened with Yemen-based Houthi attacks on freight ships earlier in the war, Krishnamoorti said.

Despite a recent uptick, the price of oil stands well below a 2022 peak reached when the blazing-hot economic rebound from the pandemic collided with a supply shortage imposed by the Russia-Ukraine war. Gas prices, meanwhile, have plummeted in recent months.

The U.S. set a record for crude oil production in 2023, averaging 12.9 million barrels per day, according to the U.S. Energy Information Administration, a federal agency.

The surge in U.S. production would help limit the impact of a possible supply disruption, though oil prices are set on a global market, where a major supply shock could not be entirely accounted for with U.S. oil output, Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, told ABC News.

“This is less troubling than it would’ve been a generation ago,” Fitzgerald said. “Today, we export more crude oil than we import.”

If both sides deescalate, the price of crude oil could quickly drop back to where it stood before the Iranian attack on Tuesday, Fitzgerald added.

“There would be no lasting importance of that,” Fitzgerald said.

The rise in oil prices comes at a relatively quiet period in the U.S. gasoline market. Drivers have enjoyed a sharp decline in gasoline prices over recent months, in part due to sluggish demand for gas as the busy summer traveling season has given way to an autumn slowdown.

Still, a regional war in the Middle East could upend the market and spike prices, experts said.

Republican Sen. Lindsey Graham of South Carolina condemned Iran’s missile attack on Israel, calling it a “breaking point” on Tuesday and urging President Joe Biden’s administration to respond.

Graham called for oil refineries to be “hit and hit hard” and said his prayers are “with the people of Israel.”

President Joe Biden and Vice President Kamala Harris are monitoring the Iranian attack from the White House Situation Room. Biden directed the U.S. military to aid Israel’s defense against Iranian attacks and shoot down missiles.

ABC News’ Allison Pecorin and Jordana Miller contributed to this report.

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(NEW YORK) — Tens of thousands of U.S. dockworkers are set to walk off the job early Tuesday morning, clogging dozens of ports along the East and Gulf coasts and potentially raising consumer prices ahead of the holiday season.

“Moments ago, the first large-scale eastern dockworker strike in 47 years began at ports from Maine to Texas, including at the Port Authority of New York and New Jersey,” New York Gov. Kathy Hochul said in a statement Tuesday.

“In preparation for this moment, New York has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need,” Hochul added.

In a statement to ABC News early Tuesday, the International Longshoremen’s Association (ILA) confirmed the union’s first coastwide strike in nearly 50 years was underway. The statement said that “tens of thousands of ILA rank-and-file members” started to set up picket lines at shipping ports up and down the Atlantic and Gulf coasts as of 12:01 am.

“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” ILA President Harold Daggett said.

The ports account for more than half of the nation’s container imports, facilitating the transport of everything from toys to fresh fruit to nuclear reactors, JPMorgan senior equity analyst Brian Ossenbeck said in a report shared with ABC News.

A prolonged work stoppage of several weeks or months could rekindle inflation for some goods and trigger layoffs at manufacturers as raw materials dry up, experts said.

“A strike would be very, very disruptive,” said Jason Miller, a professor of supply-chain management at Michigan State University who closely tracks imports, told ABC News.

“You can’t take all this freight and either send it to other ports or put it on airplanes,” Miller added. “There is no plan B.”

The ILA, the union representing East Coast and Gulf Coast dockworkers, is seeking higher wages and a ban on the use of some automated equipment.

“ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing,” the ILA told ABC News in a statement on Monday. “Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX’s unfair wage packages.”

The U.S. Maritime Alliance, or USMX, an organization bargaining on behalf of the dockworkers’ employers, declined to respond to an ABC News request for comment.

President Joe Biden retains the power to prevent or halt a strike under the 1947 Taft-Hartley Act. The U.S. Chamber of Commerce sent a letter to Biden on Monday urging the White House to intervene, which it has previously said it will not do. The White House told ABC News in a statement that it has been in contact with both the union and management in recent days.

“This weekend, senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly – one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message,” White House spokesperson Robyn Patterson said.

A prolonged East Coast and Gulf Coast port strike could moderately increase prices for a range of goods, experts told ABC News. That upward pressure on prices would result from a shortage of products caught up in the supply chain blockage, leaving too many dollars chasing after too few items, they added.

Food products are especially vulnerable to an uptick in prices, since food could spoil if suppliers sent the products ahead of time to minimize the strike impact, as they have done for some other goods, Adam Kamins, a senior director of economic research at Moody’s Analytics, told ABC News.

Additionally, a significant share of the nation’s imported auto parts pass through the ports impacted by a potential strike, which could cause an increase in vehicle prices if the strike persists.

Price increases have slowed dramatically from a peak in 2022, but inflation remains higher than the Federal Reserve’s target rate of 2%. A strike could prevent further progress, according to Kamins.

“We’re not talking about prices skyrocketing by any means, but I think it halts the momentum we’ve had over the last year or so getting inflation back in the bottle,” he said.

In 2002, a strike among workers at West Coast ports lasted 11 days before then-President George W. Bush invoked the Taft-Hartley Act and ended the standoff. However, the last time East Coast and Gulf Coast workers went on strike, in 1977, the work stoppage lasted seven weeks.

Tuesday’s potential work stoppage follows high-profile strikes undertaken last year by auto workers as well as Hollywood writers and actors. Most recently, 33,000 Boeing workers walked off the job in early September, demanding better pay and retirement benefits.

“Trade unions all over the country have been going out on strike,” Sriram Narayanan, a professor of supply chain management at Michigan State University, told ABC News. “We’re seeing that happen now at the ports.”

Ahead of the historic strike, the president of the Teamsters labor union, Sean O’Brien, released a letter of solidarity to the International Longshoreman’s Association, saying, “The International Brotherhood of Teamsters, including our members in the freight industry, stand in full solidarity with the International Longshoremen’s Association as they fight for a fair and just contract with the ocean carriers represented by USMX.”

“Don’t forget –Teamsters do not cross picket lines. The Teamsters Union is 100 percent committed to standing with our Longshoremen brothers and sisters until they win the contract they deserve,” O’Brien said.

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(NEW YORK) — Tens of thousands of U.S. dockworkers are set to walk off the job early Tuesday morning, clogging dozens of ports along the East and Gulf coasts and potentially raising consumer prices ahead of the holiday season.

The ports account for more than half of the nation’s container imports, facilitating the transport of everything from toys to fresh fruit to nuclear reactors, JPMorgan senior equity analyst Brian Ossenbeck said in a report shared with ABC News.

A prolonged work stoppage of several weeks or months could rekindle inflation for some goods and trigger layoffs at manufacturers as raw materials dry up, experts said.

“A strike would be very, very disruptive,” said Jason Miller, a professor of supply-chain management at Michigan State University who closely tracks imports, told ABC News.

“You can’t take all this freight and either send it to other ports or put it on airplanes,” Miller added. “There is no plan B.”

The International Longshoreman’s Association (ILA), the union representing East Coast and Gulf Coast dockworkers, is seeking higher wages and a ban on the use of some automated equipment.

“ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing,” the ILA told ABC News in a statement on Monday. “Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX’s unfair wage packages.”

The U.S. Maritime Alliance, or USMX, an organization bargaining on behalf of the dockworkers’ employers, declined to respond to an ABC News request for comment.

President Joe Biden retains the power to prevent or halt a strike under the 1947 Taft-Hartley Act. The U.S. Chamber of Commerce sent a letter to Biden on Monday urging the White House to intervene, which it has previously said it will not do. The White House told ABC News in a statement that it has been in contact with both the union and management in recent days.

“This weekend, senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly – one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message,” White House spokesperson Robyn Patterson said.

A prolonged East Coast and Gulf Coast port strike could moderately increase prices for a range of goods, experts told ABC News. That upward pressure on prices would result from a shortage of products caught up in the supply chain blockage, leaving too many dollars chasing after too few items, they added.

Food products are especially vulnerable to an uptick in prices, since food could spoil if suppliers sent the products ahead of time to minimize the strike impact, as they have done for some other goods, Adam Kamins, a senior director of economic research at Moody’s Analytics, told ABC News.

Additionally, a significant share of the nation’s imported auto parts pass through the ports impacted by a potential strike, which could cause an increase in vehicle prices if the strike persists.

Price increases have slowed dramatically from a peak in 2022, but inflation remains higher than the Federal Reserve’s target rate of 2%. A strike could prevent further progress, according to Kamins.

“We’re not talking about prices skyrocketing by any means, but I think it halts the momentum we’ve had over the last year or so getting inflation back in the bottle,” he said.

In 2002, a strike among workers at West Coast ports lasted 11 days before then-President George W. Bush invoked the Taft-Hartley Act and ended the standoff. However, the last time East Coast and Gulf Coast workers went on strike, in 1977, the work stoppage lasted seven weeks.

Tuesday’s potential work stoppage follows high-profile strikes undertaken last year by auto workers as well as Hollywood writers and actors. Most recently, 33,000 Boeing workers walked off the job in early September, demanding better pay and retirement benefits.

“Trade unions all over the country have been going out on strike,” Sriram Narayanan, a professor of supply chain management at Michigan State University, told ABC News. “We’re seeing that happen now at the ports.”

ABC News’ Elizabeth Schulze contributed this report.

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(NEW YORK) — Tens of thousands of dockworkers are set to strike as soon as Oct. 1, potentially snarling dozens of ports along the East and Gulf coasts with major implications for the U.S. economy.

A shutdown of the ports would cost the economy up to $4.5 billion each day, according to a report from JPMorgan senior equity analyst Brian Ossenbeck.

The East and Gulf Coast ports account for more than half of U.S. container imports, facilitating the transport of everything from toys to fresh fruit to nuclear reactors, Ossenbeck found.

A strike lasting only a handful of days would wreak little damage, but a prolonged work stoppage of several weeks or months could drive up prices for some goods and cause layoffs at manufacturers as raw materials dry up, experts said.

“The supply chain will start to get shocked after a couple of weeks,” Adam Kamins, a senior director of economic research at Moody’s Analytics, told ABC News. “If it gets beyond that, we’ll start to see some much more signifiant implications.”

The International Longshoreman’s Association, the union representing 45,000 East and Gulf Coast dockworkers, did not respond to ABC News’ request for comment. The U.S. Maritime Alliance, an organization bargaining on behalf of the dockworkers’ employers, declined to respond to a request for comment.

President Joe Biden retains the power to prevent or halt a strike under the 1947 Taft-Hartley Act. Trade organizations sent a letter to Biden earlier this month urging the White House to intervene.

The White House did not respond to ABC News’ request for comment about the economic implications of a potential strike. In response to a different reporter’s request on Friday for comment, a White House spokesperson said the Biden administration does not intend to intervene but is “monitoring and assessing” ways to address the potential impact of a strike for the nation’s supply chain.

“The president supports collective bargaining and believe it’s the best way for American workers and employers to come to agreement. We continue to encourage the parties to continue negotiating towards an agreement that benefits all sides and prevents any disruption. We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” White House spokesperson Robyn Patterson said in part.

Here’s what to know about how a dockworker strike could impact consumers and workers:

Higher inflation

A prolonged East and Gulf Coast port strike could moderately increase prices for a range of goods, experts told ABC News.

That upward pressure on prices would result from a shortage of products caught up in the supply chain blockage, leaving too many dollars chasing after too few items, they added.

Food products are especially vulnerable to an uptick in prices, since food could spoil if suppliers sent the products ahead of time to avert the strike impact as they have done for some other goods, Kamins said.

As much as 75% of the nation’s imported bananas come through ports on the East and Gulf Coasts, threatening the supply of a highly perishable product, Jason Miller, a professor of supply-chain management at Michigan State University, told ABC News.

“It’s simply infeasible to route those bananas through the West Coast ports,” Miller said.

A significant share of the nation’s imported auto parts come through the ports at issue in a potential strike, which could cause an increase in car prices if the strike persists for more than two weeks, Kamins said.

Potential price increases would likely be moderate but may nudge the Federal Reserve to hold off on interest rate cuts expected in the coming months, Kamins added.

“We’re not talking about prices skyrocketing by any means,” Kamins said, but even a few tenths of a percentage point tacked onto the annual inflation rate could scare off the Fed. “If it has an outsized effect on the consumer’s psyche and the Fed’s psyche, that in and of itself creates recession risks,” he said.

Manufacturing disruption and layoffs

A strike lasting a matter of months could cause a shortage of raw materials that brings some manufacturing activity to a halt, leading to layoffs at affected plants as well as in related industries such as shipping and logistics, some experts said.

“If there aren’t shipments to pick up, it would have a boomerang effect across the whole nation,” Bill Stankiewicz, owner of Georgia-based logistics consulting company Savannah Supply Chain, told ABC News.

At the heart of a potential disruption, shortages of parts would prevent manufacturers from assembling and shipping out final products, Miller said. The auto sector would be heavily impacted but the slowdown would affect “all types of industries,” he added.

“If you start having a very extended strike you’ll be looking at temporary layoffs because plants can’t get their parts,” Miller said.

Kamins echoed concern about manufacturing workers. Still, such an outcome would only result from a prolonged strike, he said.

In 2002, a strike among workers at West Coast ports lasted 11-days before then-President George W. Bush invoked the Taft-Hartley Act and ended the standoff. However, the last time East and Gulf Coast workers went on strike, in 1977, the work stoppage lasted seven weeks.

“Conceivably, some manufacturing workers could be affected,” Kamins said. “That would be many months down the road. I’d be surprised if it gets to that point.”

ABC News’ Elizabeth Schulze contributed to this report.

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