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Missouri State professor sheds light on what could be causing rising inflation

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Missouri State professor sheds light on what could be causing rising inflation

SPRINGFIELD, Mo. – Citizens in America are noticing that simple groceries such as milk and eggs are more expensive than they were last year. The rising prices have lifted inflation to its highest level in 40 years.

The United States isn’t the only country dealing with inflation either. The United Kingdom’s consumer price inflation has surged to the highest level in three decades, bringing on the pressure in households already facing a huge increase in energy costs.

Global supply chain backlogs and booming demand from shoppers have pushed up prices on consumer goods. It wasn’t supposed to be this way. Barely more than a year ago, the Federal Reserve had forecast that consumer prices would end 2021 only about 1.8% higher than they were a year earlier, below even its annual 2% inflation target. But high inflation reasserted itself last year with astonishing speed.

FILE – In this Sept. 16, 2019, file photo prices are displayed on a gas pump in Pittsburgh. On Wednesday, Nov. 13, the Labor Department reports on U.S. consumer prices for October. (AP Photo/Gene J. Puskar, File)

In February 2021, the Labor Department’s consumer price Index was running just 1.7% ahead of a year earlier. From there, the year-over-year price increases accelerated steadily. Now, many economists expect consumer inflation to remain elevated.

“[Inflation] could be around for a while,” said David Mitchell, an economics professor at Missouri State University. “The problem is of course once inflation gets grounded into the system it’s really hard to get it out because people have now built it into their expectations that their wages are going to have to go up 5% or 8%.”

What is causing inflation?

As high inflation first became an issue in the Spring of 2021, the Fed laid out a few reasons to explain what was going on, which included base effects, supply-chain issues, and a tricky labor market.

Base effects are perhaps the most intuitive reason for high price growth. That is, prices dropped considerably throughout 2020 as state governments imposed lockdowns in an attempt to slow the spread of COVID-19.

Once the pandemic began the demand for travel plummeted which led to a drop in prices. Now, with more people vaccinated more people are wanting to travel again. Now, airline prices are much higher than a year ago but they remain cheaper than where they were pre-pandemic

Supply chain

According to reports, supply chain issues is another factor that is causing inflation, but Mitchell says supply chain issues have been happening since the beginning of 2020.

“We have been having supply chain issues since January, February, and March of 2020,” said Mitchell. “So, it’s not just a supply chain issue. It’s more than that. You had an unprecedented amount of government spending within the last two years. You had them sending people lots of checks, so that has a big part of it as well.”

Labor issues 

Labor issues are another concern. Millions of Americans lost their jobs during the COVID-19 Recession, which resulted in fewer items being produced. Meanwhile, businesses have had a difficult time last year hiring enough workers.

What kind of impact will this have on small businesses?

Owners of small businesses have had a rough couple of years since the pandemic began. At the beginning of 2020, many businesses were forced to shut down and left many owners wondering about the future. Now, business owners will have to worry about the major increase in inflation.

1642716383 878 Missouri State professor sheds light on what could be causing
FILE – In this April 28, 2020 file photo, a closed sign is posted at a restaurant along the River Walk in San Antonio. Banks are reporting a little more success in getting small business owners’ applications for coronavirus relief loans into government processing systems. Bank industry groups says changes the Small Business Administration made in its procedures apparently are helping lenders trying to submit thousands of applications for $310 billion in loans. (AP Photo/Eric Gay, File)

“This is going to have a huge impact on small businesses because they are the least likely to be able to deal with the recent price increase,” said Mitchell. “You’re really large companies like General Motors, Ford, Toyota, they can absorb a lot of cost increases. But the small businesses have a much harder time doing that.”

According to Mitchell wages are the largest component of cost for all firms. Small businesses have several problems owners have to find a solution to.

“They’re thinking, I have to pay my workers more, I can’t get people to come in, the stuff I need to make my product is difficult to get,” said Mitchell. “It really is the perfect storm for small businesses.”

Is Inflation a good thing?

Some economists believe inflation can be a good thing, but Mitchell is not one of them.

“Typically what a lot of people think if you have this really slow mild inflation you can decide to not increase workers pay, which is essentially giving your workers a pay cut without them even knowing it,” said Mitchell. “The fact that it’s happening to you slowly doesn’t change the fact that it is happening to you.”

Inflation could ease as the omicron wave fades and as Americans shift more of their spending to services such as travel, eating out, and movie-going. That would reduce the demand for goods and help clear supply chains.

But some higher prices, such as rent may prove to be a challenge. Rental costs, which have accelerated since summer, rose 0.4% in December, the third consecutive monthly increase. That’s significant because housing costs make up one-third of the government’s consumer price index.

Republicans in Congress and even some liberal economists say Biden is partly to blame for high inflation, arguing that the financial rescue package he pushed through Congress last March added significant stimulus to an already strengthening economy.

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After struggles in playoffs, Kevin Fiala knows his future with Wild is uncertain

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After struggles in playoffs, Kevin Fiala knows his future with Wild is uncertain

Wild winger Kevin Fiala noted the small sample size when talking about his most recent playoff struggles. After the best regular season in franchise history, the Wild fell 4-2 in an opening-round, best-of-7 series with the St. Louis Blues.

Who knows what could have happened if the Wild made a deep playoff run instead? Maybe then Fiala would have caught fire at some point like he has been known to do throughout his career.

Instead, the Wild bowed out in the first round with Fiala’s continued playoff struggles serving as a big reason. The 25-year-old from Switzerland posted a career-high 33 goals and 52 assists during the regular season. He followed up that with no goals in the postseason.

“It’s been tough days,” Fiala said Monday after having the weekend to digest yet another early exit. “You just feel very empty.”

That emptiness is exacerbated by the fact that Fiala’s future with the Wild is uncertain.

He is due a big raise after emerging as an elite goal scorer this season. Perhaps somewhere in the range of $8 million a year.

Will the Wild be able to afford him? Unlikely. Do the Wild even want to afford him? Unclear.

After not giving Fiala a long-term contract last offseason, it’s hard to imagine general manager Bill Guerin will feel much differently this offseason. As much as Fiala dominated play late in the regular season, he went silent once again the playoffs. That’s a problem.

“I tried my best; I tried to get it going,” he said. “It’s just such a shame to go out like that.”

Asked if he thinks he will be back with the Wild next season, Fiala struggled to find the right words.

“There’s no other answer than, ‘We’ll see,’ ” Fiala said. “I don’t know.”

If money wasn’t a factor, there’s no doubt the Wild would want to retain Fiala. He’s a very good player who became an even better player this season.

Not only did Fiala refine his skills in many facets this season, he also became tougher mentally, learning to deal with frustration in a much healthier way than earlier in his career.

Unfortunately for Fiala, after showing so much growth during the regular season, he seemed to let the frustration get the best of him throughout the playoffs. He failed to capitalize on a few scoring chances early in the series against the Blues, and the frustration seemed to increase from there.

“In the playoffs, it feels like you really want to be the difference because every game is so big,” Fiala said. “In the regular season, you can kind of be more quiet in your head and chill kind of because it’s 82 games.”

As for how he is approaching this offseason, Fiala is trying not to think too much. There’s no point since most of this is now out of his hands.

“I’m relaxed right now,” he said. “There’s nothing I can do.”

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Officials: Buffalo gunman taunted law enforcement online

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Officials: Buffalo gunman taunted law enforcement online

By CAROLYN THOMPSON, ERIC TUCKER and MICHAEL BALSAMO

BUFFALO, N.Y. (AP) — The white gunman accused of massacring 10 Black people in a racist rampage at a Buffalo supermarket taunted law enforcement online last month and visited Buffalo back in March, investigators said Monday.

Payton Gendron, 18, began posting threads on the social media platform Discord about body armor and guns, and last month made provocative remarks about federal law enforcement, the FBI agent in charge for Buffalo, Stephen Belongia, said on a call between law enforcement officials and private-sector and university partners. The Associated Press obtained a recording of the call.

Meanwhile, Buffalo Police Commissioner Joseph Gramaglia disclosed that Gendron, who lives about 200 miles (320 kilometers) away in Conklin, New York, had been in Buffalo two months ago. Gramaglia declined to say more about that trip.

The police commissioner also told CNN that Gendron planned to keep on killing if he had escaped the scene and even talked about shooting up another store.

“He was going to get in his car and continue to drive down Jefferson Avenue and continue doing the same thing,” Gramaglia said.

The commissioner’s account was similar to portions of a racist 180-page document, purportedly written by Gendron, that said the assault was intended to terrorize all nonwhite, non-Christian people and get them to leave the country. Federal authorities were working to confirm the document’s authenticity.

Authorities said Gendron wielded an AR-15-style rifle, wore body armor and used a helmet camera to livestream the bloodbath on the internet. He surrendered inside the supermarket and was arraigned on a murder charge over the weekend. He pleaded not guilty and was jailed under a suicide watch.

Federal prosecutors said they are contemplating hate crime charges.

Former Buffalo Fire Commissioner Garnell Whitfield Jr., who lost his 86-year-old mother, Ruth Whitfield, in the shooting, asked how the country could allow its history of racist killings to repeat itself.

“We’re not just hurting. We’re angry,” Whitfield said at a news conference with civil rights attorney Ben Crump and others. “We treat people with decency, and we love even our enemies.”

“And you expect us to keep doing this over and over and over again — over again, forgive and forget,” he continued. “While people we elect and trust in offices around this country do their best not to protect us, not to consider us equal.”

Whitfield’s mother was killed after making her daily visit to her husband in a nursing home.

“How do we tell him that she’s gone? Much less that she’s gone at the hands of a white supremacist? Of a terrorist? An evil person who is allowed to live among us?” Whitfield said.

The victims also included a man buying a cake for his grandson; a church deacon helping people get home with their groceries; and a supermarket security guard.

Messages were left with Gendron’s attorneys Monday. No one answered the door at his family’s home in the morning, and relatives did not respond to messages.

Law enforcement officials said Sunday that New York State Police troopers had been called to Gendron’s high school last June for a report that the then-17-year-old had made threatening statements. The threat was “general” in nature and not related to race, Gramaglia said.

He said Gendron had no further contact with law enforcement after a mental health evaluation that put him in a hospital for a day and a half.

It was unclear whether officials could have invoked New York’s “red flag” regulation, which lets law enforcement, school officials and families ask a court to order the seizure of guns from people considered dangerous. Authorities would not say when Gendron acquired the weapons he had during the deadly attack.

Federal law bars people from owning guns if a judge has determined they have a “mental defect” or they have been forced into a mental institution. An evaluation alone would not trigger the prohibition.

The long list of mass shootings in the U.S. involving missed opportunities to intervene includes the 2018 massacre of 17 students at a high school in Parkland, Florida, where law enforcement officials had received numerous complaints about the gunman’s threatening statements, and the killings of more than two dozen people at a Texas church in 2017 by a former Air Force member who was able to buy a gun despite a history of violence.

At the White House, President Joe Biden, who planned a visit Tuesday to Buffalo, paid tribute to one of the victims, security guard and retired police officer Aaron Salter. Salter fired repeatedly at the attacker, striking his armor-plated vest at least once before being shot and killed. Biden said Salter “gave his life trying to save others.”

Authorities said that in addition to the 10 Black people killed, three people were wounded: one Black, two white.

Gendron researched the neighborhood’s demographics and conducted reconnaissance before the attack, investigators said. Mayor Byron Brown said the gunman “came here with the express purpose of taking as many Black lives as he possibly could.”

Zeneta Everhart said her son, supermarket employee Zaire Goodman, was helping a shopper outside when he saw a man get out of a car in military gear and point a gun at him. Then a bullet hit Goodman in the neck.

“Mom! Mom, get here now, get here now! I got shot!” he told his mother by phone. Goodman, 20, was out of the hospital and doing well Monday, his mother said.

In livestreamed video of the attack circulating online, Gendron trained his weapon on a white person cowering behind a checkout counter, but said, “Sorry!” and didn’t shoot. Screenshots purporting to be from the broadcast appear to show a racial slur against Black people scrawled on his rifle.

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This story has been corrected to show that Whitfield, not his father, is a former Buffalo fire commissioner.

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Associated Press reporters Robert Bumsted in Buffalo; Michael Hill in Conklin; Dave Collins in Hartford, Connecticut; and Karen Matthews, Aaron Morrison and Jennifer Peltz in New York contributed to this report. Tucker and Balsamo reported from Washington.

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Russia faces diplomatic and battlefield setbacks on Ukraine

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Russia faces diplomatic and battlefield setbacks on Ukraine

By OLEKSANDR STASHEVSKYI and CIARAN McQUILLAN

KYIV, Ukraine (AP) — Moscow suffered another diplomatic setback Monday in its war with Ukraine as Sweden joined Finland in deciding to seek NATO membership, while Ukraine’s president congratulated soldiers who reportedly pushed Russian forces back near the border.

Russian forces pounded targets in the industrial heartland of eastern Ukraine known as the Donbas, and the death toll, already many thousands, kept climbing with the war set to enter its 12th week on Wednesday.

The eastern city of Sievierdonetsk came under heavy shelling that killed at least 10 people, said Serhiy Haidai, the governor of the Luhansk region. In the Donetsk region, Gov. Pavlo Kyrylenko said on Facebook that nine civilians were killed in shelling.

But Ukrainian troops also advanced as Russian forces pulled back from around the northeastern city of Kharkiv in recent days. Ukrainian President Volodymyr Zelenskyy thanked the soldiers who reportedly pushed all the way to the Russian border in the Kharkiv region in a symbolic gain.

Video showed Ukrainian soldiers carrying a post that resembled a Ukrainian blue-and-yellow-striped border marker. Then they placed it on the ground while a dozen of the soldiers posed next to it, including one with belts of bullets draped over a shoulder.

“I’m very grateful to you, on behalf of all Ukrainians, on my behalf and on behalf of my family,” Zelenskyy said in a video message. “I’m very grateful to all the fighters like you.”

The Ukrainian border service said the video showing the soldiers was from the border “in the Kharkiv region,” but would not elaborate, citing security reasons. It was not immediately possible to verify the exact location.

Ukrainian border guards said they also stopped a Russian attempt to send sabotage and reconnaissance troops into the Sumy region, some 90 miles (146 kilometers) northwest of Kharkiv.

Russia has been plagued by setbacks in the war, most glaringly in its failure early on to take the capital of Kyiv. Much of the fighting has shifted to the Donbas but also has turned into a slog, with both sides fighting village-by-village.

Howitzers from the U.S. and other countries have helped Kyiv hold off or gain ground against Russia, a senior U.S. defense official said. The official, who spoke on condition of anonymity to discuss the U.S. military assessment, said Ukraine has pushed Russian forces to within a half-mile to 2.5 miles (1 to 4 kilometers) of Russia’s border but could not confirm if it was all the way to the frontier.

The official said Russian long-range strikes also appeared to target a Ukrainian military training center in Yavoriv, near the Polish border. There were no immediate reports of casualties.

A glimmer of hope emerged for wounded Ukrainian troops trapped in the remains of a giant steel plant, the last stronghold of resistance in the shattered port city of Mariupol. The Russian Defense Ministry announced an agreement for the wounded to leave the steelworks for treatment in a town held by pro-Moscow separatists.

There was no immediate confirmation from the Ukrainian side, and there was no word on whether the wounded would be considered prisoners of war.

After nightfall Monday, several buses pulled away from the steel mill accompanied by Russian military vehicles, but it wasn’t clear who was on the buses.

The international response to the Russian invasion picked up pace.

Sweden’s decision to seek NATO membership followed a similar decision by neighboring Finland in a historic shift for the counties, which were nonaligned for generations.

Swedish Prime Minister Magdalena Andersson said her country would be in a “vulnerable position” during the application period and urged her fellow citizens to brace themselves.

“Russia has said that that it will take countermeasures if we join NATO,” she said. “We cannot rule out that Sweden will be exposed to, for instance, disinformation and attempts to intimidate and divide us.”

But President Recep Tayyip Erdogan of Turkey, a NATO member, ratcheted up his objection to their joining. He accused the countries of failing to take a “clear” stance against Kurdish militants and other groups that Ankara considers terrorists, and of imposing military sanctions on Turkey.

He said Swedish and Finnish officials who are expected in Turkey next week should not bother to come if they intend to try to convince Turkey of dropping its objection.

“How can we trust them?” Erdogan asked at a joint news conference with the visiting Algerian president.

All 30 current NATO members must agree to let the Nordic neighbors join.

Russian President Vladimir Putin said Moscow “does not have a problem” with Sweden or Finland as they apply for NATO membership, but that “the expansion of military infrastructure onto this territory will of course give rise to our reaction in response.”

Putin launched the invasion on Feb. 24 in what he said was an effort to check NATO’s expansion but has seen that strategy backfire. NATO Secretary-General Jens Stoltenberg has said the membership process for both could be quick.

Europe is also working to choke off funding for the Kremlin’s war by reducing the billions of dollars it spends on imports of Russian energy. A proposed EU embargo faces opposition from some countries dependent on Russian imports, including Hungary, the Czech Republic and Slovakia. Bulgaria also has reservations.

“We will do our best in order to deblock the situation,” EU foreign policy chief Josep Borrell said. “I cannot ensure that it is going to happen because positions are quite strong.”

Also Monday, McDonald’s said it has started selling its business in Russia, ending a relationship that has lasted more than three decades. It cited the humanitarian crisis caused by the war, noting that staying in Russia “is no longer tenable, nor is it consistent with McDonald’s values.” The company was the first fast-food restaurant to open in the Soviet Union.

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McQuillan reported from Lviv, Ukraine. Yuras Karmanau in Lviv, Mstyslav Chernov and Andrea Rosa in Kharkiv, Elena Becatoros in Odesa and other AP staffers around the world contributed.

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