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Impact of U.S. Auto Workers’ Strike on the Economy and Inflation


Sep 19, 2023

According to analysts at the Bank of Montreal, the autoworkers’ strike will have far-reaching consequences. One of the most immediate effects will be the increase in new car prices, which will likely lead to a similar rise in prices for used cars. This surge in prices will contribute to inflationary pressures, which have already been intensified by the chip shortages and supply chain disruptions caused by the pandemic. Dealers may still have strategies in place from the Guide to Selling Cars and Profiting During a Global Pandemic to navigate these challenges.

Furthermore, the strike will also have a negative impact on gross output, and when combined with the potential for a government shutdown and the accompanying uncertainty, it could potentially cause significant harm to the overall economy. Additionally, the wage component of the strike may contribute to inflation. As autoworkers strive for better pay packages, Federal Reserve Chairman Powell may face difficulties in preventing a spiral of wage inflation. The impact of collective bargaining remains uncertain, and it remains to be seen whether union activity will overpower the otherwise moderate growth in nominal wages.

By Editor

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