New index measures supply chain pressure — and it’s really high

Researchers at the New York Federal Reserve have a new way to measure the logistics chaos that’s being partially blamed for consumer price inflation: the Global Supply Chain Pressure Index (GSCPI).

The new measure aggregates 27 indicators — including two shipping indexes, the Baltic Dry Index (BDI) and Harpex index — into a standard deviation from the average since 1997. It’s designed to provide “a more comprehensive summary of potential disruptions affecting global supply chains.”

So, how high is it?

In October and November (the latest two months available), it measured 4.43 and 4.37 standard deviations above average, respectively. To put that in the lingo of financial traders, the current situation is an extremely rare “four sigma” event.