ThinkCivics News
An educated citizenry is a vital requisite
for our survival as a free people.
Join ThinkCivics+
  • Culture & Society
  • Economy
  • Health
  • US News
  • Faith
  • Science & Tech
  • World News
No Result
View All Result
ThinkCivics News
  • Culture & Society
  • Economy
  • Health
  • US News
  • Faith
  • Science & Tech
  • World News
Join ThinkCivics+
No Result
View All Result
ThinkCivics News
Join TC+
Home Economy

Shortage of semiconductors, dubbed the ‘new oil,’ could dent GDP growth, boost inflation

Economic growth could slow and inflation is likely to see at least a momentary bump higher as the semiconductor shortage worsens, economists say.

ThinkCivics Newswire by ThinkCivics Newswire
April 24, 2021
in Economy
Reading Time: 2 mins read
0
0
Shortage of semiconductors, dubbed the ‘new oil,’ could dent GDP growth, boost inflation

Economic growth could slow and inflation is likely to see at least a momentary bump higher as the semiconductor shortage worsens, economists say.

A variety of factors have converged to make the coveted computer chips scarce. Soaring demand coupled with supply bottlenecks have led to a situation in which orders for everything from cars to televisions to touch-screen computers and more are on backup for six months or more.

With semis at the core of so much U.S. economic activity, the ongoing supply problems are likely to have ripples.

Goldman Sachs economists say that for the bulk of 2021, the shortage will translate into an inflationary tax that could result in prices rising as much as 3% for affected goods. That would boost inflation as much as 0.4 percentage points through the rest of the year, the firm said.

“Taken together, while we see relatively modest implications of the semiconductor shortage for GDP growth and the industrial sector, it represents another reason to expect core goods inflation to remain firm this year,” Goldman economist Spencer Hill said in a note.

Even though the hit won’t cause a dramatic slowdown to an economy expected to roar in 2021, the impact could still be noticeable. Goldman said the impact could reach as high as a 1% subtraction from activity, but likely will be closer to 0.5%.

Disruptions to the ‘new oil’

“While semiconductors account for only 0.3% of US output, they are an important production input to 12% of GDP,” Hill said, nothing that the shortage could cut auto production by 2% to 6% this year.

Indeed, multiple automakers have curtailed production due to lack of chips vital to their vehicles.

Stellantis NV said it will be temporarily laying off workers at its Detroit Jeep plant, while Volvo also has said the chip issues will cause it to shut some plants until the situation is resolved.

The knock-on impacts of any disruptions in the semiconductor industry are becoming increasingly apparent.

“As the world becomes more interconnected, more automated and greener, each unit of GDP growth will contain a higher content of semiconductors. Integrated circuits are becoming the key commodity input for economic activity,” wrote TS Lombard economist Rory Green.

Green calls semis the “new oil” for the global impact that disruptions can cause.

“The current severe shortage of semiconductors, which is halting automotive production worldwide, underscores the speed and scale of the changes under way,” he said. “Chips have always been an important part for manufacturing and consumer electronics, but their use will broaden to transport and digital services.”

Still, Goldman’s Hill said the inflationary impact likely won’t last far as supply increases later this year and into 2022. But the shortage now “represents another reason to expect core goods inflation to remain firm this year,” he said.

This article was originally published on CNBC. Read the original article.

ThinkCivics Newswire

ThinkCivics researches, examines, and reports on issues that matter most. We deliver explanative, fearless, and insightful analysis for public consumption.

thinkcivics.com
Tags: GDPinflationsemiconductorshortage

Related Posts

The Sinister Roots of Build Back Better

The Sinister Roots of Build Back Better

May 26, 2022
Watch: Davos Elites Warn “Painful Global Transition” Should Not Be Resisted By Nation-States

Watch: Davos Elites Warn “Painful Global Transition” Should Not Be Resisted By Nation-States

May 24, 2022

This Year’s World Economic Forum in Davos Is as Disturbing as You’d Expect

May 23, 2022

Is Trump A Modern Day Nostradamus? Watch His Prediction Of What Would Happen If Biden Won

May 23, 2022
Load More
Next Post
AZ Gov. Ducey Calls National Guard To Border, Issues State Of Emergency

AZ Gov. Ducey Calls National Guard To Border, Issues State Of Emergency

LeBron James Gets Torched By GOP Sen. Kennedy – ‘He Can Go From Zero To Screw Everyone Real Fast’

LeBron James Gets Torched By GOP Sen. Kennedy – ‘He Can Go From Zero To Screw Everyone Real Fast’

How to Fight Critical Race Theory

How to Fight Critical Race Theory

TODAY'S TOP STORIES

  • Heartache: AOC Wants To Ditch Her Tesla After Elon Musk Teased Her About Hitting on Him – Musk Fires Back HARD

    Heartache: AOC Wants To Ditch Her Tesla After Elon Musk Teased Her About Hitting on Him – Musk Fires Back HARD

    0 shares
    Share 0 Tweet 0
  • Watch: Things Get Tense Between Lori Lightfoot and Reporter After Rebuke Over ‘Call to Arms’ Tweet

    0 shares
    Share 0 Tweet 0
  • Florida Makes a Move on COVID-19 Vaccination That Is Going to Set Hair on Fire

    0 shares
    Share 0 Tweet 0
  • The Bravest Gun Rights Speech You’ll Ever See

    0 shares
    Share 0 Tweet 0
  • Lara Logan Drops A Bombshell On Who Is Aiding The Invasion At America’s Southern Border

    0 shares
    Share 0 Tweet 0

WHO withdraws 12 Biden ‘sovereignty’ amendments amid fierce opposition

by ThinkCivics Newswire
May 27, 2022
0
WHO withdraws 12 Biden ‘sovereignty’ amendments amid fierce opposition
National Security

Amid charges of ceding U.S. sovereignty to the World Health Organization, 12 of the 13 amendments submitted by the Biden administration...

Read more

Newly obtained memo shows John Kerry was conducting ‘secret’ meetings with Iran during the Trump administration

by ThinkCivics Newswire
May 26, 2022
0
Newly obtained memo shows John Kerry was conducting ‘secret’ meetings with Iran during the Trump administration
National Security

This article was originally published on Twitchy.com. Read the original article.

Read more

Handwritten Notes From 2017 Show FBI Agents Mislead DOJ On The Trump-Russia Investigation

by The Federalist
May 19, 2022
0
Handwritten Notes From 2017 Show FBI Agents Mislead DOJ On The Trump-Russia Investigation
National Security

Hillary Clinton’s campaign lawyer Michael Sussmann is currently on trial for lying to the FBI about his role in pushing...

Read more

Jankowicz Got The Boot, But Biden’s ‘Ministry Of Truth’ Hired Replacements Are WORST

by ThinkCivics Newswire
May 19, 2022
0
Jankowicz Got The Boot, But Biden’s ‘Ministry Of Truth’ Hired Replacements Are WORST
National Security

The Department of Homeland Security (DHS) hired the co-author of the PATRIOT Act, arguably the harshest crackdown on civil liberties...

Read more
The Sinister Roots of Build Back Better
Economy

The Sinister Roots of Build Back Better

by American Thinker
May 26, 2022
0

President Joe Biden and the puppeteers who control his teleprompter are weakening the country in order to gain more power...

Read more
Watch: Davos Elites Warn “Painful Global Transition” Should Not Be Resisted By Nation-States
Economy

Watch: Davos Elites Warn “Painful Global Transition” Should Not Be Resisted By Nation-States

by Zero Hedge
May 24, 2022
0

As World Economic Forum head Klaus Schwab proclaimed that “the future is built by us” at the opening of the...

Read more
This Year’s World Economic Forum in Davos Is as Disturbing as You’d Expect
Economy

This Year’s World Economic Forum in Davos Is as Disturbing as You’d Expect

by RedState
May 23, 2022
0

It’s the time of year again when thousands of the world’s most powerful and wealthy people gather in Davos, Switzerland...

Read more
Is Trump A Modern Day Nostradamus? Watch His Prediction Of What Would Happen If Biden Won
Economy

Is Trump A Modern Day Nostradamus? Watch His Prediction Of What Would Happen If Biden Won

by The Political Insider
May 23, 2022
0

President Trump is many things, to friend and foe alike. Is being a modern day Nostradamus among them? At least...

Read more
Facebook Twitter RSS

Brilliantly

SAFE!

thinkcivics.com

Content & Links

Verified by Sur.ly

2022

Recent News

  • Screaming Man Restrained as He Lunges at Ted Cruz in Restaurant
  • Durham Delivers a Smoking Gun on Hillary Paying Sussmann to Take Disinformation to the FBI
  • GIANTS manager Gabe Kapler refuses to take field for National Anthem

Category

  • Culture & Society
  • Economy
  • Editorials
  • Education
  • Elections
  • Energy
  • Environment
  • Faith
  • Health
  • Immigration
  • Military
  • National Security
  • Politics
  • Science & Tech
  • US News
  • Videos
  • World News

© 2022 ThinkCivics Media. All Rights Reserved.

  • Login
  • Sign Up
No Result
View All Result
  • Home
  • About
  • Store
  • Contact Us
  • Join
  • Contribute

© 2022 ThinkCivics Media. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

OR

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.