by Adam Button
The week ahead starts quietly but the main highlight comes on Tuesday with the release of the US August report. Many economists believe this report could show the crest in pricing pressures, but the automotive industry offers a real-world model and road map to what’s coming next.
At the confluence of consumer-demand, Covid-shutdowns and the supply bottlenecks is the automotive industry. Hardly a Fed speech passes without a reference to the 45% y/y jump in used auto prices but it’s developed into an even thornier issue to deconstruct.
New auto sales also spiked during the pandemic and were on track for their best year in a decade before the chip shortage began to derail new car construction. As inventories were depleted, consumers slowly lost the ability to negotiate prices and companies dropped incentives.
If you arrive at a car lot today in the US, you’ll almost certainly