Covid Pandemic Causes Car Chip Shortage and Birth Decline : The Indicator from Planet Money The Covid-19 pandemic has caused demand shifts and supply chain snafus that have led to many shortages. For Indicators of the Week, we'll be looking at two more: cars and ... babies?

Chips, Cars and the Baby Bust

Chips, Cars and the Baby Bust

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JIM YOUNG/AFP via Getty Images
(JIM YOUNG/AFP via Getty Images)
JIM YOUNG/AFP via Getty Images

Fridays are always awesome, but they're particularly great at The Indicator because that's when we do Indicators of the Week! That's when Stacey and Cardiff pick indicators from somewhere in the news that particularly struck them this week.

Our first indicator is $60.6 billion. That is the hit that car makers around the world are expecting to experience because of a shortage of semiconductor chips. These chips are used for power steering systems, brakes, and the infotainment systems that a lot of cars have. Basically, you can't have cars without them! Earlier in the pandemic, car manufacturing went down and car demand was expected to collapse, so the chip makers found other buyers for their products, mainly in consumer electronics. Car demand, however, hasn't collapsed the way it was expected to, but now the supply of semiconductor chips can't keep up. It can take over 6 months for chip production to ramp up significantly, so this shortage could be here for a while.

Our second indicator is 300,000. That is how many fewer babies will be born in the U.S. this year than would have been born if the pandemic had never happened. 3.75 million babies were born in the U.S. in 2019, so a shortfall of 300,000 is about an 8% drop. This drop is partially attributed to the financial stress many have experienced due to the pandemic. The shutdowns are also a likely cause, leading to daycare closures and fewer opportunities for new romances to form. The declining number of births may have significant economic implications, as the U.S. may have a smaller tax base and lower productivity growth for years to come.

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