A spike in the June 2021 consumer price index reading may be little cause for alarm thanks to a dizzying, but isolated, rise in used car prices.
Consumer prices just posted their largest one-month jump in nearly 13 years, a fact that might tempt some to conclude that a white-hot U.S. economy is on the brink of runaway inflation. But a spike in the June 2021 consumer price index reading may, in fact, be little cause for alarm. That’s because a significant reason for the overall prices increase is thanks to a dizzying rise in one isolated area of the economy: used car prices. « The headline CPI numbers have shock value, for sure; however, once you realize that a third of the increase is used car prices, the transitory picture becomes more clear, » wrote Jamie Cox, managing partner at Harris Financial Group. « Inflation is rising, but things are well behaved and have not changed materially. » Cox’s comments came just minutes after the Labor Department published its June 2021 CPI report, which showed that prices paid by consumers increased 5.
