Sep
24

Supply Shocks

The US has recently been exposed to two supply shocks; an oil price rise and the GM strike. Both are likely to reduce growth and push up inflation, but only slightly. It’s because economy-wide spending on oil is down to 2.4% of GDP, about half what it was 40 years ago. And, because GM accounted for 30% of auto sales as recently as 20 years ago, but just 17% today.        

Share This Post
Facebook Twitter Email

Speak Your Mind

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.