- Cars and household furniture among other goods will get cheaper soon, per UBS.
- Their prices surged over the last year as rising demand outstripped supply.
- However, prices will remain above pre-pandemic levels for much of 2022.
- See more stories on Insider's business page.
Prices for some consumer products like used cars and trucks are surging as increased demand outstrips the abilities of global supply chains.
A group of economists at UBS forecasted that prices will fall in the next few months for:
- Used and new cars
- Household furniture and supplies
- Recreational goods
- Information goods
The analysts wrote that the current rise in prices would be short-lived given that it's limited to just certain kinds of products like apparel, airfares, hotels, used cars, and financial services. Rental car companies, for example, unloaded their fleets last year as Americans stayed indoors. They've since embarked on a buying spree, pushing prices upward. Some used cars cost more than newer models, Insider's Tim Levin reported.
"Gradually increasing production of new cars should help keep used car prices on a downward path for some time," the UBS analysts said. Still, they projected that used car prices will remain 16% above pre-pandemic levels at the end of 2022. They made a similar forecast for household furnishings to stay above typical levels.
Consumer spending is on the upswing this year as many households built up their savings, partly due to the federal rescue packages which included enhanced unemployment insurance and direct payments. The nonpartisan Congressional Budget Office predicts that US GDP will grow by 7% this year, the highest level since 1984. As people spend their savings and demand evens out, supply chains will catch up, causes prices to drop.
So, if you can wait a few months to buy that used car or furnish your new home, you should be able to get a better price.
Is your dollar not going as far as it used to? Please reach out to [email protected].