Economists have suggested that the current inflation and rise in consumer prices won’t stay for long, partly because the global cost for crude oil and natural gas has gone down.
The US has been battling a severe rise in consumer prices this past year, rising 6.8% for the 12 months ending in November, a 39-year high. According to several experts, this colossal inflation is expected to remain near this level for a few more months but will then be moderate through 2022.
In a relief, economists don’t see a repeat of the 1970s or early 1980s, when inflation ran above 10% for frighteningly long stretches. Firstly, a change will be seen in the coming weeks across US households due to the fact that prices have dropped on global markets for crude oil and natural gas, which is filtering into lower prices at the pump and for home heating.
Russell Price, the chief economist at Ameriprise, expects inflation to peak at 7.1% in December and January, for example. After that, he expects the inflation rate to fall toward 4% by the summer and below 3% by the end of the year, but to stay above 2% through 2023.
One reason for the moderation, he said while speaking to the Associated Press, is improving supply chains. Economists hope increasing availability of everything from computer chips to shipping containers will help inflation to ease. “It’s in no one’s interests to have the supply chain as disruptive as it has been,” Price said.