I doubt markets will make much of this, but it was worth noting on Tuesday that a key gauge of used vehicle prices in the US moved higher in January.

The inexorable rise and subsequent decline on Manheim’s index was scrutinized by market participants during the pandemic-era inflation.

Note that in the CPI series, used vehicle prices posted a sixth consecutive MoM drop in December.

The ongoing declines are a meaningful disinflationary tailwind. And the Fed needs all the help it can get.

That’s the context for what Manheim on Tuesday described as an atypical 2.5% jump. “January’s increase was driven in part by the seasonal adjustment,” the color accompanying the release said. Unadjusted, January’s rise was 1.5% from December.

The index itself was the highest since August. Obviously, it was down sharply (-12.8%) on a YoY basis.

Again, I wouldn’t want to make too much of this, but it should probably be considered in the context of the rekindled animal spirits which helped drive a surprise increase in pending home sales in December, and also in the broader context of the Fed’s concerns around markets and consumers getting the “wrong” idea about the potential for easier monetary policy later this year.

Manheim cited unusually high conversion rates. “The higher conversion rate indicated that [January] saw sellers with more pricing power than what is typically seen for this time of year,” the report said.