Afternoon Coffee: Shortage of natural rubber impacts auto industry; Jobless claims reach lowest level of pandemic; Panic-buying of toilet paper subsides  

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If a global semiconductor shortage wasn’t enough of an issue for the auto industry, Bloomberg reports that supply chain experts are warning of another shortage in natural rubber.

The white sap that bleeds from rubber trees grows in warm, humid countries like Thailand and Indonesia. The natural rubber has unique elements that are critical for tires and car parts. But industry professionals said rubber prices are at the beginning of a cyclical, multi-year rally because flooding and leaf disease are ravaging the supply, the article said. Meanwhile, rising prices are giving rubber tappers little incentive to plant new trees, which take seven years to mature.

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These potential disruptions came to the attention of rubber distributors last year after China, the world’s largest consumer of natural rubber, made big purchases to replenish rubber reserves. By December, American manufacturers that held back on ordering rubber during Covid-related lockdowns were scrambling to secure it.

“If you look at the trillions of dollars Covid-19 cost us — a big chunk of that could have been mitigated by millions of dollars of supply chain investment,” Dan Finkenstadt, a professor at the Naval Graduate School of Defense Management, told Bloomberg.

First-time unemployment claims register 576,000, the lowest number since pandemic start

The US Labor Department on Thursday reported that the number of Americans applying for first-time unemployment benefits fell to 576,000 last week, the lowest number since the start of the Covid pandemic, according to the Associated Press.

The previous 12-month low was 684,000 new claims for a week in March.

About 17 million people are collecting unemployment benefits, but the lower first-time claim figure is a hopeful sign that layoffs are easing while the economy recovers from the pandemic disruption. Jobless claims are down sharply from a peak of 900,000 in early January and well below the 700,000s level they were stuck in for months, the article said.

The new-claims number is still higher than historical numbers, however. The last time that so many millions were out of work, the weekly claims sat around 350,000.

The decline in unemployment claims comes in line with other evidence of a stronger economy — vaccinations accelerating, pandemic business restrictions are lifted and Americans appear willing to travel. Employers added a healthier 916,000 jobs in March, the most since August, and the unemployment rate fell to 6%, less than half the pandemic peak of 14.8%.

Toilet paper sales and demand level out

It appears one trend of the Covid pandemic is behind us: the panic-buying of toilet paper, paper towels and disinfecting wipes, according to CNN Business.

Sales of toilet paper dropped 32.7% year-over-year (YoY) in the 12 weeks ending April 3. In the same time period, sales of paper towels fell 18.3%, and wet wipe sales were down 15.7% YoY. NielsenIQ, which reported the data, said sales of household and cleaning products remain higher than they were pre-pandemic, but they have come down from the earlier months of the pandemic.

CNN reports that this has allowed suppliers to match inventory levels with demand. While some toilet paper manufacturers were able to accelerate production and reallocate inventories to meet demand, some faced issues in the efforts to boost output because factories operated at a fixed category. In general, consumer goods companies were careful about dramatically increasing production to avoid issues when demand inevitably declined.

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