Inflation painfully high, some relief may be coming

Inflation is painfully high, but this hopefully is close to as bad as it gets.

Consumer prices rose 6.8 perent for the 12 months ending in November, a 39-year high. Many economists expect inflation to remain near this level a few more months but to then moderate through 2022 for a variety of reasons. And they don’t see a repeat of the 1970s or early 1980s, when inflation ran above 10% for frighteningly long stretches.

Households could even see relief in some areas within weeks. 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. That should keep inflation somewhat in check, even if prices keep rising elsewhere in the economy.

To be sure, economists say inflation will likely stay higher than it was before the pandemic, even after it eases through 2022. More often than not in the last 10 years, inflation was below 2 percent, and it even scraped below zero during parts of 2015. The bigger danger then was too-low inflation, which can also lead to a weak economy.

“This is not going to be an easy fix,” said Nela Richardson, chief economist at ADP. “Just because inflation will eventually moderate doesn’t mean that prices are going to go down. They’re up. We’re just lowering the rate of change, not the level of prices.”