Latest / Inflation Explained with Fexingo: CPI, Prices, and the Cost of Living for Everyday People
The Inflation Gap Between New and Used Cars That CPI Misses
Episode 88 of Inflation Explained looks at a quirk in how the Consumer Price Index tracks vehicle prices. The CPI data from May 2026 shows used car prices are finally falling, but new car prices are still climbing. Lucas and Luna break down the substitution bias in the CPI's methodology — how the index assumes consumers shift to cheaper options when prices rise, even when they can't. They cite real examples from the latest data: a 0.4% drop in used cars versus a 0.2% rise in new cars, and the 10-year breakeven inflation rate dipping to 2.23%. The episode explores why your actual…
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