Since just before the pandemic during January 2020 through March of this year, the CPI indexes for new autos, auto maintenance & repairs, and auto insurance are up 21.0%, 34.8%, and 44.6% (chart). These all exceed the 20.6% increase in the headline CPI over this period. Why?
Americans are buying lots more expensive light trucks than passenger cars. They cost more to buy, maintain, repair, and insure than passenger cars. During February 2013, 50% of motor vehicle sales were light trucks. Their share of the market rose to a record 80.7% in April (chart). Is this really contributing to inflation? Or are more Americans prospering and choosing to splurge on their motor vehicles?
End of free preview
Ed's analysis as news breaks — often the same day. Plus the full QuickTakes archive.
Individual investor? Get Ed's QuickTakes for personal use at yardeniquicktakes.com →