Used cars drive U.S. consumer prices higher in August

[CountAllVotes]

Source: Reuters

WASHINGTON (Reuters) - U.S. consumer prices rose solidly in August, with the cost of used cars and trucks increasing by the most in more than 51 years likely as Americans shunned public transportation because of fears of contracting COVID-19.

The report from the Labor Department on Friday also showed a firming in underlying inflation pressures last month. But this will have no impact on monetary policy as the Federal Reserve last month rewrote its framework, putting new emphasis on the labor market and less on worries about too-high inflation.

The U.S. central bank's embrace of what it calls "flexible average inflation targeting" is still shy of many details, but in theory could see policymakers tolerate price increases above its 2% target for a period of perhaps several years to offset years in which inflation was lodged below its goal.

<snip>
Excluding the volatile food and energy components, the CPI gained 0.4% last month after surging 0.6% in July, the largest gain since January 1991. A 5.4% jump in prices of used cars and trucks, the largest gain since March 1969, accounted for more than 40% of the rise in the so-called core CPI last month.

Read more: https://finance.yahoo.com/news/used-cars-drive-u-consumer-134716870.html

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It seems that few can afford to drive new cars these days so they buy old ones now to get to and from work and other places they need to go.

So much for those $30,000+ new cars out there sitting on the lot rotting away.

Welcome to dump's world where Americans have no money for such luxuries these days.

[MontanaMama]

1. I just bought a used vehicle for my teenage son.

It was a long hard search. I can vouch for car lots being empty where I live...not just used but new cars too. And boats. And RV’s. No inventory. I really wanted to buy the kiddo’s vehicle from a private party and not a dealer because I wanted to pay cash and if you pay one penny more than $10K, you have to fill out paperwork for the IRS if you buy from a dealer. I looked at vehicles at dealerships too but found there was almost nothing to see. Car dealers are trying to move vehicles they wouldn’t otherwise take just to fill spots on their lots. I ended up finding a one owner 2011 RAV4 Limited in great shape but it was two hours away...the guy had listed it an hour before I saw it and his phone was blowing up with inquiries. I told him I had cash and he agreed to meet us at the halfway point. We bought it and I’m glad we did. It isn’t getting any better out there.

[iluvtennis]

2. Thanks for sharing. Know your son will be happy with his [new]used car. nt

[hibbing]

3. Don't know what I'm going to do

I have always taken the bus to work, luckily I can work from home, but I am not sure what I will do if I have to go back to an office setting downtown, I really don't feel like driving down there every day.

Peace

[bucolic_frolic]

4. Just like laptops, and gas, btw, has moved way up relative to price of oil

[roamer65]

5. Hmmm...makes me think I should sell my 2017 Cruze and buy a 2021.

I’ll hafta go test drive a Chevy Malibu and Subaru Legacy.

[Initech]

11. I'm buying a Legacy in a few weeks.

I've been needing to get a new car for a while since my 2013 Altima is getting pretty well worn. The new Legacy models are very nice cars. I think I would steer clear of the Malibu though, they look nice on the outside but the inside is full of cheap plastic and poor interior quality, judging from the reviews I've read.

[kimbutgar]

6. My sister in law who works at a car dealership in Arizona said they are making record sales

In used cars and they are buying cars from other states to sell on their lot. Because of this she thinkS mf45 is the greatest president ever and has the best economy in her lifetime!


I’d love to send her this article but she’s dyslexic and can’t read, since the last book she read was in high school. She’s 61. I’ve been to her house and there are no books. While my house is over flowing with books. And three of her employees at the dealership have died of COVID which she thinks is overblown and exaggerated in numbers of deaths.

[Sapient Donkey]

7. My younger brother used mas transit a lot before covid

He was trying to save up money in order to avoid having to finance a vehicle. He ended up tearing up those plans and put what he down on a used car he financed. At least he had some options, though.

[yaesu]

8. that cash for clunkers program won't be need again anytime soon. nt

[progree]

9. Hmm CPI: August: +0.4%, 12 months: +1.3%, ## Core CPI: August: +0.4%, 12 months: +1.7%,

To see all the components in a table,
https://www.bls.gov/news.release/cpi.nr0.htm
It shows the monthly changes for the first 8 months, and then the 12 month change (change from August 2019).

e.g.
CPI: .1   -.4   -.8   -.1   .6   .6   .4    1.3
Core CPI: .2   -.1   -.4   -.1   .2   .6   .4    1.7
Food at home .5   .5   2.6   1.0   .7   -1.1   -.1    4.6

Some that stand out:
12 month increases:
CPI: +1.3%
Core CPI: +1.7% (CPI less food and energy)
Food at home: +4.6%
Energy: -9.6%
New vehicles: +0.7%
Used cars and trucks: +4.0%
Apparel: -5.9%
Medical care services: +5.3%

[turbinetree]

10. I've been trying to sell a car for a very long time and all I get are scammers its seems

about ready to take my ad down, got one offer from a dealer and he wanted to give me 7,000 told him nope lowest I would go was 9000...............they were trying to make a 2,000 dollar profit................Kelly and Edmunds said it was worth 9500...............