Containers loaded with cargo are stacked on top of a cargo ship sailing through the Suez Canal in the Red Sea, Egypt, January 20, 2017.
Camille Delbos Corbis News | Getty Images
WASHINGTON — Strong December jobs numbers released Friday capped a year of economic victories for the Biden administration. Now, global shipping delays caused by attacks on cargo ships in the Red Sea threaten to slow that momentum.
The Labor Department reported that employers added 216,000 jobs in December, more than 40,000 more than economists expected. The unemployment rate also remained unchanged at 3.7%.
However, the Danish shipping company maersk It announced it would continue to divert its fleet from the Red Sea indefinitely amid continued attacks by Houthi rebels in the region. Maersk is one of several shipping companies that began diverting more than $200 billion in trade from the Suez Canal in December.
White House officials are keenly aware of the risk that shipping backlogs could cause a domino effect within the U.S. supply chain, which only recently appeared to be recovering from the impact of the coronavirus. ing.
“Given what has happened during the pandemic, we are extremely concerned about the economic impact of supply chain and logistics congestion,” Jared Bernstein, chairman of the White House Council of Economic Advisers, said on a call with reporters Friday. “I’m becoming more sensitive to this,” he said.
During the first years of the pandemic, shipping ports suffered prolonged backups that prevented approximately $24 billion worth of goods from entering the U.S. market.
National Economic Council President Lael Brainard said the delay has had a “minimal” impact on energy costs so far.
Brainard told CNBC’s “Squawk on the Streets” on Friday that Maersk’s actions were “unacceptable” but that they “actually have very little impact on pump prices.”
Brainard did not discuss the potential negative impact on global manufacturing and consumer goods if the Red Sea becomes too dangerous for major shipping companies.
The current delays have already affected several companies that sell products in the United States, including Sweden-based IKEA and British consumer electronics company Electrolux.
Mr. Biden’s national security team is “working with a broad coalition of partners and in close communication with shippers on this matter,” Brainard said.