Bloomberg Opinion asked seventeen of us to write short bits on this question, here is mine:
Look at used-car prices and rental-car availability. If secondhand cars are getting cheaper and rentals are easy to book, then the U.S. is making progress.
The supply of cars has been significantly constrained since the fall of 2019. The reasons include a strike at General Motors, pandemic-related manufacturing shutdowns and a shortage of semiconductors. One result is that it is very hard or very expensive to rent a car, especially in the more heavily touristed parts of the U.S. In turn, fewer cars from rental fleets make their way into used-car markets.
How do these used-car prices come back down? Will more families become one-car households, selling off autos at the higher prices and thus pulling additional supply into the market? Might companies divert supply flow from other countries to the U.S.? Can America use its existing stock more effectively, for instance by sending rental Hondas from Kansas to Florida?
In the short run, the problem appears hopeless. Yet market supply typically ends up being more responsive than observers expect; think of face masks.