US consumers remain unimpressed with this progress, however, because they remember what they were paying for things pre-pandemic. Used car prices are 34% higher, food prices are 26% higher and rent prices are 22% higher than in January 2020, according to our calculations using PCE data.
While these are some of the more extreme examples of recent price increases, the average basket of goods and services that most Americans buy in any given month is 17% more expensive than four years ago.
Manufacturers also cut production in march of 2020, stating that it was for worker safety. However, I believe it was because they figured sales would plummet if the pandemic was very bad. I assume their projections for death were much higher than in actuality. With COVID mainly affecting older people they did lose a large amount of new vehicle buyers as older people are much more likely to buy a new vehicle. When they shut down production, it had hysteretic effects down the supply chain due to jit (just in time) manufacturing. Without orders, may suppliers also had to cut production of vehicle parts, especially chip manufacturers, which are mainly in China. When vehicle production started back up, suppliers had to also catch up with demand.