By BRENT MARTIN
St. Joseph Post
A nationally known economist expects inflation to ease next year, though higher wages will make it a stubborn problem.
Economist Chris Kuehl, managing director of Armada Corporate Intelligence, recently spoke to the St. Joseph Chamber of Commerce Economic Development Summit. Kuehl sees a tough couple of quarters ahead, but a growing economy toward the end of the year.
Kuehl says federal spending during the coronavirus pandemic and Russia’s invasion of Ukraine drove inflation early. Rising wages are driving inflation now.
“And that’s the hardest one to deal with, because once wages go up, they don’t come back down,” Kuehl tells KFEQ/St. Joseph Post.
Kuehl warns that the first of the new year could be rocky. He expects the economy to shake off some of the stubborn problems which have been dragging it down toward the end of the year.
“Always, there are the potential flies in the ointment,” Kuehl says. “But (the) worker shortage is probably the single biggest threat and that is one of the things that positions this area fairly well.”
Kuehl says Missouri Western State University, North Central Missouri College, Hillyard Technical Center, and other educational institutions have been focusing on training workers for the positions most needed. He says that isn’t happening everywhere.
Kuehl says the sectors of aerospace and automotive have remained strong throughout. Agriculture is doing well, though it has been caught between big profits and big costs.
“Agriculture is doing fairly well, but it’s caught kind of in a vice,” Kuehl says. “It’s seen very high prices, which is good, but they have also seen very high input costs. So, the farmer has been fighting high fertilizer costs, high diesel fuel costs. Those things are chipping away at the fact that they’ve also seen high prices for their harvest.”
Kuehl says there is a very real global food shortage, mainly stemming from Russia’s invasion of Ukraine. Ukraine and Russia produce 25% of the world’s wheat and 15% of the world’s corn.