US States Where People Spend the Most on Used Cars vs. New Cars | Cars
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One of the most important economic stories of recent months has been the rapid growth of inflation. Recent Consumer Price Index data from the United States Bureau of Labor Statistics revealed that consumer prices increased by 7.5% from January 2021 to January 2022. These figures continued a historically unusual trend of increased prices month-to-month and year-to-year going back to the spring of 2021.
Many economists attribute the current period of inflation to several pandemic-related factors. One is a robust government stimulus: Through a series of relief efforts, the federal government has pumped money into the economy over the past two years to support businesses and households during disruptions due to the COVID-19. The relative strength of the economy has given households more money to spend, which has helped boost consumer demand. In particular, consumers are spend more on physical products than on services. However, ongoing global supply chain challenges have made it difficult to manufacture and ship products amid this increased demand. With supply failing to keep up with demand, many categories are seeing their prices rise.
One of the categories where this dynamic has been most felt is the new and used car market. Demand for vehicles has shifted sharply during the pandemic, falling in early 2020 but recovering to near pre-pandemic levels because. However, shortage of semiconductor chips and other supply issues have made it difficult for automakers to keep up with demand. This means that fewer new cars are coming to market, which has increased demand and prices for used vehicles. As a result, the consumer price index for used vehicles increased by more than 40% from January 2021 to January 2022, with prices for new vehicles increasing by 12.2% over the same period.