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Illustration: Aïda Amer/Axios

American consumers and businesses face an array of shocking shortages in 2021 — the result of corporate miscalculations in the early days of the pandemic. The shortages range from labor to lumber to rental cars.

Why it matters: As vaccinations rise and the economy grows back to its pre-pandemic size, Americans are tantalized by the prospect of the country reverting to something approaching the familiar old normal. While that might happen eventually, it could take a surprisingly long time for a new equilibrium to establish itself.

  • Until then, expect a constant stream of headlines about supply being unable to meet demand across a large range of industries and sectors.

The big picture: Shortages have appeared in multiple areas.

  • In lumber, high prices are a consequence of the decision by sawmills to shut down production a year ago, in anticipation of an economic slump.
  • In auto, high prices reflect decisions by chip manufacturers early in the pandemic to concentrate on making semiconductors for consumer electronics — which were expected to boom — at the expense of making chips for vehicles, which were expected to be hit hard by the broader slump in travel.
  • In the restaurant industry, which is struggling to find workers, experienced servers found themselves with almost a year to find other jobs with better job security and fewer health risks.
    • In expensive cities like New York, many simply left town. Hiring was generally not easy even before the pandemic, and it's much more competitive now that so many restaurants are trying to staff up aggressively at exactly the same time.

Be smart: These shortages don't mean the economy is overheating. If anything, they mean it isn't yet hot enough. As industries like sawmills, semiconductor fabricators and restaurants grow out of their recession slump, supply will increasingly meet demand and prices will more likely to go down than up.

  • In an advanced economy, supply chains and lead times can be extremely long and complex, even for seemingly simple items like lumber. Disruptions to global shipping — an industry that has never been nimble — only make it harder to get back to normal.
  • Rebuilding those supply chains for a reconfigured economy, and finding the new natural state of dynamic equilibrium, is extremely difficult and time-consuming.
  • Pockets of sticker shock on things like rental car prices are therefore likely to remain for at least the rest of this year.

The bottom line: If price rises in a certain items are caused by temporary shortages, then the inflation is also likely to be temporary.

Go deeper

Biden White House jammed on gas prices

Illustration: Sarah Grillo/Axios

The Biden White House increasingly views rising gasoline prices as a source of potential political peril — and is now asking some of the world's biggest oil producers to pump more oil.

Why it matters: This trend, combined with a fragile economic recovery threatened by the Delta variant of the coronavirus, and inflation beginning to bite consumers, could threaten the administration's ambitious congressional agenda for late summer and early fall.

Vaccine mandates exacerbate class divide

Illustration: Sarah Grillo/Axios

Corporate America's patchwork approach to vaccine requirements is deepening the pandemic's class divides.

Why it matters: New cases of coronavirus, driven by the Delta variant, are up 86% in the U.S. over the past two weeks. The rise in new infections has upended return to work plans for certain sectors of the economy, while others can't afford to change course.

Scoop: Beto plans Texas comeback in governor's race

Former U.S. Rep. Beto O'Rourke speaks during the Georgetown to Austin March for Democracy rally on July 31, 2021 in Austin, Texas. (Photo by Brandon Bell/Getty Images)

Former Rep. Beto O’Rourke is preparing to run for governor of Texas in 2022, with an announcement expected later this year, Texas political operatives tell Axios.

Why it matters: O'Rourke's entry would give Democrats a high-profile candidate with a national fundraising network to challenge Republican Gov. Greg Abbott — and give O’Rourke, a former three-term congressman from El Paso and 2020 presidential candidate and voting rights activist, a path to a political comeback.