Detroit’s Auto Production Slump Biggest Soft Spot in Weak GDP Number

Mid-sized pickup trucks and full-size vans are seen in a parking lot outside a General Motors assembly plant where they are produced in Wentzville, Mo, on March 24, 2021. Jeff Roberson/AP Photo

The chip shortage-driven auto production slump was the single biggest factor depressing U.S. economic output in the third quarter, shaving over 2 percentage points off the gross domestic production (GDP) number, which disappointed with its below-expectations print.

The U.S. economy expanded at an annualized pace of 2.0 percent in the third quarter, the Commerce Department’s Oct. 28 data (pdf) showed, with motor vehicles and parts making a negative 2.39 percentage point contribution to the overall GDP number. Economists polled by Dow Jones expected third-quarter GDP to rise by 2.8 percent, with Thursday’s print coming as a downside surprise.