Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Brendan Lynch/Axios

Inflation is at its highest level since 2008, thanks in very large part to a single item whose price has been going through the roof: Cars.

Why it matters: What goes up must generally come down, and there are strong indications — like data last week from prominent used car marketplace Manheim — that the unprecedented rise in auto prices is peaking. In the second half of this year, cars might well be a force making inflation numbers look artificially low.

By the numbers: Used car and truck rental prices rose 12% in June, and 88% from a year previously. Used car prices were up 11% in June and 45% from a year ago, while new car prices were up 2% and 5% respectively.

How it works: The rise and rise of car prices has been one of the dominant inflation narratives of 2021. The cause has been a shortage of new cars, which in turn has been caused by a shortage of the computer chips needed to make any modern car run.

  • Cars need as many as 1,400 different computer chips, each of which has to go through a rigorous quality-control process that ensures it will keep on working for at least 20 years.
  • Lead times for such chips can be as long as 180 days

What they're saying: "These chips are not fungible assets," Tirias Research analyst Kevin Krewell tells Axios. "You can’t just move them to another fabrication facility with spare capacity."

Flashback: Fire and ice have both closed chip plants unexpectedly this year, making it harder for them to reconfigure their production lines to go back to making the auto chips that manufacturers desperately need.

  • Automakers slashed chip orders when the pandemic hit in March 2020, causing chip makers to pivot to making components for uses that were booming, such as webcams.
  • More recently, automakers around the world have been forced to cut production in the face of the shortages. AutoForecast Solutions says the industry faces a loss of 6.2 million vehicles globally because of the chip supply line disruption, while AlixPartners sees a drop of 4.9 million vehicles just in the first half of this year.
  • Volkswagen has warned that the chip shortage could get even worse in the second half of this year.

The big picture: While new-car prices haven't risen enormously (sticker prices are sticky, it turns out), the new-car shortage has meant that car-rental companies, faced with booming demand, have become buyers rather than sellers of second-hand vehicles, upending the market's normal delicate balance.

What's next: Wholesale auto prices seem to have peaked, which means that retail prices are likely to follow them down. Manheim chief economist Jonathan Smoke says that retail prices have been lagging wholesale prices by about 4 weeks this year — and that the decline in wholesale prices started 5 weeks ago.

Expand chart
Data: Cox Automotive; Chart: Axios Visuals

The bottom line: If you're in the market for a car, and you're able to wait a few months, you should probably do that.

Go deeper

Sep 23, 2021 - Axios Twin Cities

Why Instagram ads, billboards are reminding you to lock your car

Image: Instagram

Has your Instagram tapping surfaced ads reminding you to lock your car lately? You're not alone.

What's happening: The Minnesota Department of Commerce's Fraud Bureau partnered with the Hennepin and Ramsey county attorneys to launch a public awareness campaign aimed at reducing auto theft.

  • "Keep your car safe from thieves by parking in well-lit areas, always locking the doors and taking the key or FOB," one version of the black-and-yellow social posts reads.
  • New billboards on major roads, including Hiawatha and I-94, carry similar warnings.

Why it matters: Having your car stolen sucks! But auto thefts also impact the economy as a whole, when insurance companies pass on the cost of repair, replacement and claim processing to consumers in the form of higher premiums.

Details: Commerce doled out about $67,000 to the two county attorney offices to pay for the campaign, which also includes bus ads.

  • The department plans to expand the campaign to Greater Minnesota later this year.

Between the lines: Locking your car may sound like a basic reminder, but forgotten keys and unsecured doors are big drivers of auto thefts.

  • Commerce's 2019-2020 auto thefts report estimates that 60% of cars stolen in the metro were taken after the owner left the keys inside.
  • While the vast majority (93%) of vehicles stolen in jurisdictions participating in a state theft prevention initiative were recovered, many were damaged, again increasing costs.

The bottom line: St. Paul Police Department spokesman Steve Linders told Torey that these "crimes of opportunity" are especially common in the winter, when many of us leave our cars running to warm them up on chilly days."

  • We had a case a few years back that involved a woman stealing a running, unattended vehicle and driving it to the airport," he recalled. "She was arrested at the gate."

First-time homebuyers shrink as prices spike

Data: National Association of Realtors; Chart: Axios Visuals

Home sales cooled as prices continued to heat up in August.

Driving the news: The share of first-time existing homebuyers (29%) last month was the smallest in two years, according to new data from the National Association of Realtors.

Senators to grill top Pentagon leaders over Biden's Afghanistan exit

Photo: Carolone Brehman/Pool/AFP via Getty Images

Defense Secretary Lloyd Austin, Joints Chiefs of Staff Chairman Gen. Mark Milley, and the head of U.S. Central Command, Gen. Frank McKenzie, are testifying publicly this week for the first time since the chaotic U.S. withdrawal from Afghanistan.

Why it matters: The Pentagon's top leaders have come under intense scrutiny over the series of disasters that followed the U.S. exit, including the Taliban's seizure of Kabul, the ISIS-K terrorist attack that killed 13 U.S. service members and scores of Afghans in August, and a retaliatory U.S. drone strike that killed 10 civilians.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!