Joe Biden’s America is a total mess, failure after failure, and everything is rising in the worst possible way. With Biden continuing to surpass bad records after bad records, I strongly suggest Biden be added to the Guinness world record as the worst President America has ever had.
In fact last month, US inflation surged again to a new 40-year high of 7.9%, propelled by surging costs for gas, food, and housing.
And now used car prices continue to rise at levels not seen at any time this century prior to the Covid-19 pandemic.
Biden then passes the blame to the used vehicle market for much of the country’s rising inflation rates. The problem, as acknowledged by the White House, is that there isn’t much it can do to help lower interest rates right now.
Biden fails to acknowledge that this shouldn’t be happening right now if he hasn’t been making the worst decisions for America.
Biden’s approval ratings have suffered in recent months, and many surveyed voters told CNBC and Change Research that they are concerned about the Biden administration’s handling of the economy. Sixty percent of the survey’s 1,895 respondents said they disapprove of Biden’s handling of the economy, a six-percentage-point decline in approval from September.
The potential upside for the Biden administration is that inflation is expected to moderate organically as the Federal Reserve looks to raise interest rates this year.
Used-vehicle prices normally increase in the spring, so Cox Automotive expects pricing to continue to increase. But in the second half of the year, the company is forecasting inflation to end, and a more normal pattern of depreciation to resume.
The contribution of used cars to inflation has averaged zero over the last 20 years. The data from the United States Bureau of Labor Statistics said it is now up more than 1% year on year.
According to Cox Automotive, the average list price for a used vehicle last month stood at $27,246. While this was 28 percent higher than in March of 2021, it was down from February’s average of $27,609. Used car prices are also down from December’s record high of $28,193.
Used car prices will remain elevated in the coming months, although the year-over-year price increases may no longer look as dramatic due to the coming anniversary of the chip shortage, explained Charlie Chesbrough, a senior economist at Cox Automotive.
“The anniversary of the chip shortage – when prices started to skyrocket – is approaching,” he said. “Year-over-year growth rates will come back to earth. However, prices will not go negative. Rather they should return to more normal growth trends but from a higher base.”
This means that year-over-year sales data will be more consistent, but it does not indicate that vehicles will be cheaper than they were previously. Because there isn’t much that can be done in the short term to alleviate the chip scarcity, automobile prices will remain high for the foreseeable future. This applies to both new and used vehicles, as slower new vehicle sales can lead to a shortage of used vehicle inventory as dealers receive fewer trade-ins.
While demand for used vehicles remains strong, April sales were lower than expected, down 15% from the same month last year. However, as more Americans begin to receive their tax refunds, Cox Automotive chief economist Jonathan Smoke predicts greater used vehicle sales in April.
“Used-vehicle sales will likely see a stronger April performance as the refunds continue to flow in combined with the fact that the average refund is at a new record and up 12 percent from a year ago,” Smoke said.
Last month, Bank of America economist Alex Lin told CNBC that starting in the spring, used car prices and overall inflation will face some tough year-over-year comparisons. According to the concept, if used car prices were raised by 1% in early 2021, they would have to rise them by the same amount this year to keep inflation at the same level.
“Wholesale prices since the pandemic are up more than 60%,” Lin said in December. “So the question is: Will we see another 60% next year?”
“I mean, I hope not,” he added. “But I guess I would be skeptical about that as a base case.”
Sources: Washingtonexaminer, Coxautoinc, Mainstreet-nashville