U.S. Auto Industry Faces Decline Amid Chip Shortage 🚗

The global chip shortage has caused issues across several industries, and it has begun to unravel the U.S. auto sector. As Gross Domestic Product growth slowed to the slowest level in over a year—less than a third of the growth experienced in the previous quarter—analysts say that the auto industry is, by far, the biggest soft spot in the American economy. The Delta variant has caused slowdowns and a drop in spending, resulting in a 2.4% percent reduction in growth for the sector. Global automakers are on the rebound, but they are outpacing U.S. automakers as investors bank on a slow but steady economic recovery. Specifically, motor vehicle production in the U.S. has dropped 6 out of the last 9 months—a level that analysts and investors feel more closely resembles a recession. While the chip shortage has contributed to inflation, increasing cost for new automobile production, a lack of new vehicles has also pushed buyers to used cars, with prices for used cars alone rising 10% per month for 3 months in a row. In spite of the news, Ford's ($F@US) stock rose nearly 9% in early trading while GM's ($GM@US) stock ticked down a fraction of a percent.