Rent Inflation Set To Soar This Summer

Specifically, in 2020 e-commerce’s share of overall retail sales in America was 19%. The highest was in South Korea (40%). The second place was China which had a 28% share. On the opposite side, e-commerce only had 6% share in India. That’s a big growth market obviously. India is set to be the largest country in the world soon.

No One Wants A Vehicle

In a prior article, we explained that consumers soured on buying houses and cars in May because of price increases. A common phrase among home buyers is “I know I overpaid.” Technically, they might not have overpaid. Affordability still isn’t out of control. This is the opposite of a bubble. Banks have not made it easy to get a mortgage. However, people feel they overpaid because there is a mad dash to buy houses above asking prices.

The situation for vehicles is similar to housing. As you can see from the chart above, the vehicle buying conditions index is near the trough in the 2007-2009 financial crisis. The chip shortage has lowered the supply of new cars. Demand increased once people decided it wasn’t safe to use public transportation. It also helped that flying became unsafe.

Even though the pandemic is nearly over, people haven’t given up their cars yet. If people in cities drive at a higher rate than before the pandemic, there will be massive traffic jams. The Manheim used car index in May is up 48% from last year. Both used and new car affordability and supply are challenged. Demand might finally pull back this summer due to elevated prices.


The core PCE prices index recovered all its pandemic losses. The Fed is likely going to be more hawkish in its remaining meetings this year, but we believe rate hikes aren’t likely. It will simply guide for the end of QE next year. Rent is set to drive core inflation up this summer. Online retail penetration is a few quarters (not a decade) above the prior trend. Vehicle buying conditions are extremely challenged because of the spike in prices. Maybe demand for used vehicles will finally pullback this summer.

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