Flight from the Cities: Used Car Prices Soar Most Since 1969
It is not just house prices that are getting a big boost as people shift their lifestyles following months of pandemic, lockdowns, riots, calls to defund police forces, and rising crime.
Used car sales are booming too.
Used-vehicle prices jumped 5.4 percent in August, the largest monthly increase since March 1969. That followed a 2.3 percent gain the prior month. Compared with a year ago, used car and truck prices are up four percent.
Used cars sale have risen as people seek escapes from city centers plagued by crime and bereft of amenities like indoor dining, bars, museums, and theaters. What’s more, many people have become wary of mass transportation, including subways and busses.
Factory closures this spring also limited the supply of new cars, pushing buyers into the used car market.
The jump in auto prices accounted for 40 percent of the 0.4 percent monthly gain in core prices, the Labor Department said Friday.
Prices rose on a broad range of goods in the month, indicating that the economic rebound continued in the month despite the end of various types of federal assistance. The Labor Department’s Consumer Price Index, climbed 0.4 percent in August, the third straight seasonally adjusted monthly gain.
That beat expectations for a 0.3 percent gain.
On Thursday, the Labor Department’s Producer Price Index also came in above expectations.Consumer prices bounced back over the summer as states reopened their economies. While some analysts feared the midsummer resurgence in coronavirus cases might trip up the recovery, early data suggests the economy continued on a path of strong growth. The rebound has wethered even the end of enhanced unemployment benefits and the lack of a new package of economic aid.
Cheap gasoline likely is also driving up demand for autos. Gas prices rose two percent in August but are down 16.8 percent from a year ago.