NEW YORK (AP) – Inflation is painfully high, but hopefully it’s almost as bad as it gets.

Consumer prices rose 6.8% for the 12 months ending in November, a 39-year high. Many economists expect inflation to stay close to this level for a few more months, but then moderate until 2022 for a variety of reasons. And they don’t see a repeat of the 1970s or the early 1980s, when inflation hit 10% during frightening times.

Households might even see relief in some areas within weeks. Prices have fallen in global crude oil and natural gas markets, resulting in lower prices at the pump and for home heating. This should contain inflation somewhat, even as prices continue to rise elsewhere in the economy.

True, economists say inflation is likely to remain higher than it was before the pandemic, even after it subsides until 2022. Most often over the past 10 years, inflation was below 2%, and it even fell below zero during parts of 2015. The greatest danger then was too low inflation, which can also lead to a weak economy.

“It will not be an easy solution”, said Nela Richardson, chief economist at ADP. “Just because inflation will eventually moderate does not mean that prices will fall. They are standing. We are only lowering the rate of change, not the price level.

Russell Price, 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 to 4% by the summer and below 3% by the end of the year, but still above 2%. until 2023.

One of the reasons for moderation, he said, is to improve supply chains. They were trapped when the global economy suddenly came back to life after its brief shutdown, and economists are hoping the increasing availability of everything from computer chips to shipping containers will help keep inflation down.

“No one has an interest in the supply chain being as disruptive as it has been”, Price says.

Then there is the Federal Reserve. Wall Street expects the Fed to say this coming week that it will step up its exit from a monthly bond buying program meant to support the economy. This would open the door for him to start raising short-term interest rates.

The buying of bonds and low rates are aimed at stimulating borrowing, causing individuals and businesses to buy more things. This can help drive up inflation, as demand exceeds supply.

The US government will also potentially offer less help to households in 2022, whether through child tax credits or increased unemployment benefits. It could also lead to a decrease in purchases by Americans, further easing the pressure on inflation.

Very immediately Americans should see fluctuations in inflation through energy costs.

A gallon of regular gasoline fell about 2.4% over the past month, to just under $ 3.35 a gallon on Friday, according to AAA. That’s a step forward, even though drivers still pay much higher prices than last year, when a regular gallon only cost $ 2.16.

The U.S. Energy Information Administration predicts gasoline will drop again to $ 3.13 on average in December and to $ 2.88 for all of 2022 after averaging $ 3.39 last month, highest since 2014.

“This should give consumers a little relief when they go to refuel. Now what relief? It’s really hard to say ”, AAA spokesperson Andrew Gross said. “It’s really hard to assess what kind of world events are happening. And it really doesn’t take much to drive up oil prices.

Oil prices have fallen for several reasons. On the one hand, nations have made agreements to increase oil supplies. On the other hand, the omicron variant of the coronavirus has rocked demand expectations, fearing it could cause lockdowns and canceled trips. Benchmark US crude has fallen nearly 15% since early November.

Home heating costs are also likely to be lower than expected, although bills are likely to be even higher than last year as natural gas prices fall along with other fuels in global markets.

The average cost to heat a home this winter will be around $ 972, according to Mark Wolfe, executive director of the National Energy Assistance Directors Association. That’s less than the $ 1,056 his group forecast in October, but still more than the $ 888 consumers paid to heat their homes last year.

“This is a situation of consumer mistrust”, said Wolfe. “Don’t expect prices to drop to last year’s levels.”

Perhaps the biggest wild card in the direction inflation is heading is what’s going on with workers’ wages.

Across the country, workers are fighting for higher wages. Deere & Co. employees recently won a deal that will earn them an immediate 10% raise, for example.

Usually, companies will try to pass these increases on to their customers through higher prices. And with low unemployment and businesses chasing workers – there were nearly 1.5 vacancies at the end of October for every unemployed person – the pressure could intensify for faster wage gains.

On top of that, it’s a question of whether the already observed spike in inflation will cause US households to step up their purchases to get ahead of any further price hikes. This could create its own feedback loop, driving prices up.

“We have seen a real awareness on Main Street that prices have gone up”, Richardson of ADP said.

“It’s a concern because when you fight inflation on multiple fronts – it’s not just the supply chain, it’s not just labor market shortages, but now you have the consumer. that’s in the mix – this only increases the difficulty in bringing inflation under control.