Inflation microcosm: Used-car price surge continues
- Matt Phillips, author of Axios Markets
Consumer Price Index data released Wednesday showed used-vehicle prices continue to surge. As of December, they were up 37% compared to the previous year.
Why it matters: Analysts have been watching used-vehicle prices as a microcosm of the broader U.S. inflation story, encompassing both the disarray of global supply chains and the surge in demand for goods.
- Prices of used cars and trucks were the second-biggest driver — after shelter — of the monthly increase in consumer prices in December, responsible for almost a quarter of the change.
The big picture: The global chip shortage has slowed vehicle assembly lines worldwide, driving a wave of buyers to the used-car market and prices sharply higher.
What's next: Not relief. A forward-looking gauge of wholesale used-car prices that tends to predict the direction of consumer prices surged yet again in December, suggesting upward pressure on cars — and inflation more broadly — shows no signs of abating.