On a seasonally adjusted basis, the prices of new vehicles increased by 1.1 per cent between October and November, and the cost of used vehicles rose 2.5 per cent. Energy prices rose by 3.5 per cent, with the biggest increases coming in gasoline and fuel oil. By contrast, the price of non-energy services increased by 0.4 per cent, the same increase as in the previous month. “If you look out to next year, twelve months from now, you are likely going to see much lower goods-price inflation and somewhat higher services-price inflation,” Daco said. “But, on net, you will see substantially lower inflation.”

Echoing Biden’s point about gas prices, Daco also predicted that the headline inflation rate would start to fall as early as this month. Since the end of October, the price of crude oil has dropped by more than ten dollars a barrel on world markets, which is now resulting in slightly lower prices at the pump. According to A.A.A., the average price of gasoline nationwide is $3.34 a gallon, compared with $3.42 a month ago. “In the December inflation report, you are going to see disinflation in energy prices,” Daco said. “We think the peak in the headline rate of inflation is now.” By February, Oxford Economics forecasts, the inflation rate will edge down to 6.3 per cent. In June, it will be 4.1 per cent, and in November, 1.9 per cent. The forecast shows the “core” inflation rate, which excludes volatile energy and food prices, moving in the same direction, though a bit more slowly. It peaks in February at 5.2 per cent, before falling to 3.2 per cent in June and 2.2 per cent in November.