This rise in prices of used cars is luckily not in India but the United States. It was found that due to the fear of contracting COVID-19, most Americans are increasingly giving up on public transportation and moving towards used cars, reported Reuters.
In August, U.S. consumer prices rose sharply due to surge in prices of used cars and trucks — this rise is 51-year-high.
The report from the US Labor Department on Friday showed a firming in underlying inflation in August, putting fears of deflation to rest. The present state is unlikely to discourage the Federal Reserve from pumping more money. Most central banks are doing as much as it can to prevent businesses from collapsing by increasing more liquidity. Most economies are under the fear of the COVID-19 recession and everyone is doing all it can from reaching their shore.
The U.S. central bank in August rewrote its framework, putting new emphasis on the labour market and less on worries about too-high inflation.
“Consumer prices are rebounding from the pandemic shock, but as supply shortages are resolved, upward price increases should moderate,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics in New York. “The Fed’s new policy objectives underscore that monetary policy will remain very accommodative for a considerable time.”
The consumer price index increased 0.4 per cent last month, leading to a rise in prices of gasoline, recreation and household furnishings and operations. After a drop due to business closures, CPI advanced 0.6 per cent in June and July.
In the 12 months through August, the CPI increased 1.3 per cent after gaining 1.0 per cent in the 12 months through July.