A global chip shortage and the aftermath of Hurricane Ida hit manufacturing in the United States. In September, it fell by 0.7 percent – a record in seven months, according to Reuters…
The biggest decline was in the automotive industry. Machine production fell 7.2 percent in September after falling 3.2 percent in August amid chip shortages. In addition, labor shortages and congestion in ports that have delayed deliveries will put pressure on production in the months and quarters ahead.
Excluding autos, US production fell 0.3 percent in September. The output of consumer goods decreased by 1.9 percent, and non-durable goods – by 1 percent. The volume of industry fell by 1.3 percent and mining – by 2.3 percent.
The Federal Reserve System (FRS) estimates that US GDP growth, in which the service sector plays a large role, slowed to 1.2 percent year-on-year in the second quarter. In the second quarter, the economy grew by 6.7 percent. According to the FRS, in September there was a steady increase in inflation, mainly due to the rise in prices for cars against the background of their shortage.
Natural disasters that happened in the United States during 2021, including Hurricane Ida, forced the administration of US President Joe Biden to take measures to reduce risks to the economy. The government released a report on plans to protect the financial, insurance and housing markets, as well as citizens’ savings from the threats of climate change. In addition, the US intends to address the global chip shortage. The White House has discussed ways to overcome the supply crisis with companies including major automakers General Motors, Ford Motor and Stellantis. IHS Markit reported that the global car market has already lost more than seven million cars in 2021. The chip shortage is expected to last until 2023.
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