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.
