Consumer price index data released on Wednesday shows that the prices of used vehicles continue to rise. As of December, they were up 37% from the previous year.
Why this matters: Analysts are viewing used vehicle prices as a microcosm of the broader US inflation story, which includes both a dislocation of global supply chains and increased demand for goods.
- Prices of used cars and trucks were the second biggest driver in December after sheltering for a monthly increase in consumer prices, accounting for nearly a quarter of the change.
big picture: Global chip shortages have slowed down vehicle assembly lines around the world, causing a wave of buyers in the used car market and a rapid increase in prices.
What will happen next: No relief. a forward gauge Wholesale used car prices that predict the direction of consumer prices bounce again in december, suggesting upward pressure on cars – and inflation more broadly – shows no signs of easing.
go in: Inflation in December at 7%, highest since 1982