Detroit’s chip woes drag on U.S. economic growth

0
32

(Reuters) – The U.S. auto sector’s production slump this year is more than a big minus for Detroit – it’s a major drag on the entire economy.

FILE PHOTO: Workers are seen at the FCA Mack Assembly plant in Detroit, Michigan, U.S., March 10, 2020. REUTERS/Brendan McDermid

Gross domestic product growth slowed to the weakest pace in more than a year during the third quarter at just 2% annualized. That was less than a third of the growth rate in the preceding quarter.

While the Delta variant of COVID-19 played a big role as it swept through the country during July, August and September and put a lid on growth in consumer spending, the biggest soft spot in Thursday’s weak GDP reading was the car industry – by a country mile.

In all the auto sector subtracted 2.4 percentage points from economic growth in that period. That was the biggest drag Detroit has had on U.S. output in four decades – and one rarely seen outside of a recession. The contraction caused…

Read more…