July 15, 2024

October 2021 CPI: Inflation Rose at Fastest Rate Since 1990

Used car prices may not peak until April, said Jonathan Smoke, chief economist at Cox Automotive, which produces a closely watched index that tracks wholesale vehicle costs. After that, they’re unlikely to actually fall; they will just increase less quickly than their current breakneck pace.

At #1 Cochran Subaru Butler County, a car dealership in western Pennsylvania, the general sales manager, Jim Adams, is offering a $500 bonus to customers who return leased vehicles early, and buying cars that people bring in for repairs. He is asked a few times a day when things might normalize.

“Until the manufacturers can get back up to speed, used car prices will continue to grow,” Mr. Adams said in an email.

As industries wait for balance to return, Republicans are pointing fingers at Mr. Biden and Democrats, saying the stimulus checks they provided to households and other pandemic-related benefits are responsible for the rise in prices.

The White House has tried to emphasize that prices are jumping while the country is staging a rapid economic rebound from a once-in-a-century disaster. And Mr. Biden has said his new policies, including an infrastructure bill that cleared Congress last week, will over time expand capacity and help to cool inflation.

But the president made clear on Wednesday that the onus for taming inflation rested with the Fed. “I want to re-emphasize my commitment to the independence of the Federal Reserve to monitor inflation, and take steps necessary to combat it,” Mr. Biden said in his statement.

At the Fed, some officials are already warning that the central bank may need to pull back economic support faster. Doing that could cool down prices by tempering demand, but would also weaken the job market when millions remain out of work compared with prepandemic employment levels.

Article source: https://www.nytimes.com/2021/11/10/business/economy/consumer-price-inflation-october.html

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