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.
The chip shortage is the auto industry own fault. Historically auto manufactures used older prosses nodes (40nm) as it was cheap and widely available however that node they are on is now outdated to the point where there’s not that many fabs manufacturing that size of chips anymore.
To make things worse the silicon industry moved to a larger wafer design which would require the auto industry to invest in new hardware to support the larger wafer and redesign/validate the ICs for the smaller node all of which requires spending money they won’t see a return in for a significant amount of time.