Where does it say that all of the raw cost inputs must go higher? Do people not realize that managements find ways to beat raw costs? They automate to keep labor costs down. They source better to avoid, say, Chinese retaliation. They fix freight costs by making sure that the contract drivers and freight companies are pitted against each other.
At the same time the freight-forwarders recognize that they have bottlenecks, particularly at CSX Corp. (CSX) where so many of the chemicals come from.
The chemicals themselves that need to be brought together to make so much of what we see going up will come down in costs because they are, for the most part, natural gas related. Resin spiked because of a series of one-time issues, weather, supply chain disruption and, in some cases, just poor execution.
Yes, if the President orders that aluminum go up in value then it will. If steel is mandated to be higher, that will matter.
But at the same time if oil peaks - certainly a possibility given the bottleneck solving that will occur in the Permian and the additional drilling now going on, at least worldwide - and the dollar continues to get strong, then raw costs will come down for certain.
Most important, you have to remember that when you hear labor shortages recognize that these tend to solve themselves, too. We saw it during the previous oil rush where workers did appear and the price of labor does come down. Structurally we don't have the immigration wave that has historically helped us meet these concerns. But we do have an amazing amount of tech rushing to solve these problems.
In the end I believe that we are now getting over the shock of higher raw costs even as every company mentions it. Look at Clorox (CLX) . On a down day it isn't going down despite the verbiage about costs going higher.
We are going to work through these raw costs just when everyone is going to be worried about them the most.