- Sep 3, 2014
- Reaction score
- Pacific NW
- Political Leaning
The housing-and-renovation boom drove insatiable demand for lumber, even as the pandemic idled mills that had already been slowed by an anemic construction sector since the 2008 financial crisis. Lumber futures surged to unprecedented heights, peaking at more than $1,600 per thousand board feet in early May.
But since then, the prices of those same plywood sheets and pressure-treated planks have tumbled, as mills restarted or ramped up production and some customers put off their purchases until prices came down.
It’s a dance of supply and demand that has reassured many experts and the Federal Reserve in their belief that painful price spikes for everything from airline tickets to used cars will abate as the economy gets back to normal.
“Many of the extreme price spikes we’ve seen in recent months are likely to reverse for Econ 101 reasons,” said Jan Hatzius, chief economist at Goldman Sachs.
Good ol' "Econ 101." The rock against which ideology and wishful thinking smashes into bits.