The jump in used car prices

Economic restrictions related to the COVID-19 pandemic are being loosened, and economic activity is beginning to pick up. That’s expected to generate temporary increases in consumer price inflation. Over the past few months, prices for energy commodities and services have increased. But the largest monthly change in the April 2021 CPI belonged to another sector: used cars and trucks.
The FRED graph above shows that year-over-year growth in used vehicle prices reached 21% in April 2021, up from an already elevated 9.4% in March 2021. This is especially remarkable given that the general increase in the price level as of April was 4.2%. Used vehicle prices haven’t increased this much since December 1981, when they measured 21% and general inflation was 8.9%. Prior to 2020, the last time used vehicle prices had a monthly increase of more than 10% was between September 2009 and 2010. So how did this come about?

Federal Reserve Source

Author: RealEstate