A Kongsberg factory west of Oslo produces a missile-defense system that can shoot down drones and other airborne threats from almost 25 miles away. When first deployed in Ukraine in 2022, it recorded a 100% success rate shooting down cruise missiles and drones in its first few months. New customers, though, will have to wait: It takes two years to make one Nasams, and there is already a multiyear backlog. To ramp up, Kongsberg has moved to 24-hour, seven-day shifts and has workers in for some holidays when the factory would typically have been idled for maintenance. That still may not be enough. The defense industry is grappling with a prolonged labor crunch, as it scrambles to find workers with niche skills, from software development to welding, and who are willing to endure lengthy security checks.
- Date Posted:
- January 3, 2024
The recent bout of disinflation likely occurred from both improvements in supply and decreases in demand, but both effects are fading away. Supply improvements are largely over, and the Fed’s anticipated pivot may rekindle demand both domestically and abroad. In addition to raising asset prices and lowering interest rates, the anticipated Fed pivot has also eased global financial conditions by weakening the dollar. A weaker dollar is globally stimulative because it improves the balance sheets of foreign corporations borrowing in dollars and foreign banks that lend dollars. More directly, a weaker dollar is also usually directly associated with a rise in global commodity prices. Both of these effects place upward pressure on inflation. Inflation data may look very benign in the near term, but a return to a steady 2% inflation regime seems unlikely.