There were increases in prices across the board, as the economy reopened and consumer demand surged, just as a shortage of manufacturing materials limited production. The auto industry may be a prime example of what happens when a spike in demand and a drop in supply collide, economists said. Lack of parts, like semiconductors, are limiting the number of new cars automakers can produce, causing shutdowns at some factories. Meanwhile, a pandemic-driven burst in sales has sapped the existing inventory of new cars and trucks, leaving fewer on dealer lots. Consumers are turning to used vehicles, pushing the price higher. (And dealers, hoping to keep up with demand, are paying more for trade-ins to ensure lots are stocked.) Don’t expect car prices to go down any time soon, either. Economists said the shortage of semiconductors will likely continue for some time, lengthening the shutdown in new-car production and forcing car dealers to continue to raise prices as inventory decreases.
