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National
AP
Key reason for supply shortages: Americans keep spending
Take a step back from the picked-over store shelves, the stalled container ships and the empty auto showrooms, and you’ll find a root cause of the shortages of just about everything you’d want to buy
  • Updated

DETROIT — Take a step back from the picked-over store shelves, the stalled container ships and the empty auto showrooms, and you’ll find a root cause of the shortages of just about everything.

Even as the pandemic has dragged on, U.S. households flush with cash from stimulus checks, booming stock markets and enlarged home equity have felt like spending freely again — a lot. And since consumer demand drives much of the U.S. and global economies, high demand has brought goods shortages to the U.S. and much of the world.

Add the fact that companies are ordering — and hoarding — more goods and parts than they need so they don’t run out, and you end up with an almost unquenchable demand that is magnifying the supply shortages.

That’s where a big problem comes in: Suppliers were caught so flat-footed by how fast pent-up spending surged out of the recession that they won’t likely be able to catch up as long as demand remains so robust. That’s especially so because Americans, still hunkered down at home more than they did before the pandemic, continue to spend more on goods — electronics, furniture, appliances, sporting goods — than on services like hotels, meals out and movie tickets. All that demand for goods, in turn, is helping to accelerate U.S. inflation.

Unless spending snaps sharply back to services — or something else leads people to stop buying so much — it could take deep into 2022 or even 2023 before global supply chains regain some semblance of normalcy.

“Demand is completely skewed,” said Bindiya Vakil, CEO of Resilinc, a consulting firm that helps companies manage supply chains. “This has now become more and more painful by the day.”

One reason people may eventually stop spending so much is that everything simply costs more now. Consumer prices in the U.S. skyrocketed 6.2% over the past year as food, gasoline, autos and housing catapulted inflation to its highest pace since 1990. The laws of gravity suggest that the cumulative effect of so much inflation will eventually exert a brake on spending.

For now, though, manufacturers foresee no end to heavy demand — and no end to beleaguered supply chains or spiking inflation pressures. A chronic lack of computer chips has forced Ford Motor Co., for instance, to revamp its system of ordering parts that require long periods from order to delivery to try to address shortages.

“It’s highlighted that the “just-in-time” operating model that’s been prevalent in autos may not be the right operating model,” Hau Thai-Tang, Ford’s chief operations and product officer, told analysts.

Smaller companies, too, have felt compelled to build up as many supplies as they can so they can still make products. Moriarty’s Gem Art near Chicago, a family business for 40 years, has been stocking up on gold, silver and platinum to make necklaces and rings, desperate not to run out of supplies as holiday orders pick up.

“We’re ordering a lot more than what we actually have orders for — just in case,” said Jeff Moriarty, the marketing manager.

Even a normal post-holiday shopping lull, though it might help, isn’t expected to be enough to unclog ports, speed shipping traffic or allow factories to replenish inventories.

“The baseline expectation for improvement is around the middle of 2022,” said Oren Klachkin, lead U.S. economist for Oxford Economics. “But I think the risks of that happening later are fairly high.”

Though Americans have increasingly ventured out in recent months, the balance between spending on goods and services remains skewed. The pent-up demand that followed the economic recovery is still tilted toward goods like furniture and cars and less toward haircuts, concerts and restaurant meals. Though services spending has grown in recent months, it isn’t nearly enough to close the gap.

Since April 2020, consumer spending on goods has jumped 32%. It’s now 15% above where it was in February 2020, just before the pandemic paralyzed the economy. Goods account for roughly 40% of consumer spending now, up from 36% before the pandemic.

U.S. factories have tried mightily to keep up with demand. Production rose nearly 5% over the past year, according to the Federal Reserve, despite periodic ups and downs, including disruptions to auto production caused by chip shortages.

Imports have narrowed the gap between what America’s consumers want and what its factories can produce. From January through September this year, the U.S. imported 23% more than in the same period in 2020. In September, thanks to surging imports, the U.S. posted a record deficit in goods trade: Imports topped exports by $98.2 billion.

Voracious demand for goods has accelerated as more people have become vaccinated in wealthier countries. Yet in poorer countries, especially in Southeast Asia, the spread of the delta variant forced new factory shutdowns in recent months and crimped supply chains again. Only recently did it start to recover.

At the same time, many U.S. workers have decided to quit jobs that had required frequent public contact. This created shortages of workers to unload ships, transport goods or staff retail shops.

Ports clogged up. Last month, 65 ships waited off the California coast to be unloaded at the Ports of Los Angeles and Long Beach — two weeks’ worth of work. The average wait: 12 days. That has since worsened to 78 ships, with an average wait of nearly 17 days, despite around-the-clock port operations beginning in October.

Before the pandemic, ships had set arrival times and went straight to a berth for unloading, said Gene Seroka, the L.A. port’s executive director. Now, with Asian factory output at record highs, the port is moving record levels of goods. Yet it’s not enough to meet the demand.

Seroka doesn’t foresee the shipments easing even next year. Retailers have told him they plan to use the slower months of January and February — if they actually are slower — to replenish inventory.

As with ports, rail lines are moving more goods. Through early November, freight shipped by America’s railroads was up 7.5% from a year ago. Truck shipments were up 1.7% in September. Yet there aren’t enough drivers or trucks to move all the freight.

In China, too, manufacturers are struggling with shipping delays, container shortages and cost increases. Shantou Limei International Ltd., which makes children’s toys in the city of Shantou, expects sales to fall 30% this year because of delays and costlier shipping.

“The most serious problem for us is being unable to deliver goods on time because of the difficulties in securing freight containers,” said Frank Xie, the company’s general manager. “A lot of things have gone beyond our controls and expectation.”

Philip Richardson, an American who manufactures loudspeakers in Panyu, near Hong Kong, said orders have increased 400%. A key reason is increased demand from Americans and Europeans, who have gone on a home electronics buying spree. The price to ship goods to U.S. customers on a 40-foot cargo container, meantime, more than tripled in July.

“The customer has to bear it or cut back on orders,” Richardson said.

Song Wenjie, owner of Hand-in-Hand Electric Appliance Technology Co., a manufacturer of home appliances in Jiaxing, south of Shanghai, said that soaring cargo prices make it unprofitable to ship some goods.

“The combination of power outages and shipping delays might lead to a 20% fall in production this year, Song said.

Among European companies grappling with snarled supply lines is Shoe Zone, a British retailer that sources most of its footwear from China. Shipping container prices have jumped at least five-fold in 12 months, said Anthony Smith, the chief executive.

“This will continue to impact us for at least a further six months until the issues being experienced in the whole supply chain return to more sensible levels,” he said.


Health
AP
Russian test blamed for space junk threatening space station
U.S. officials say a Russian weapons test created the space junk now threatening the seven astronauts aboard the International Space Station
  • Updated

CAPE CANAVERAL, Fla. — A Russian weapons test created more than 1,500 pieces of space junk now threatening the seven astronauts aboard the International Space Station, according to U.S. officials who called the strike reckless and irresponsible.

The State Department confirmed Monday that the debris was from an old Russian satellite destroyed by the missile.

“Needless to say, I’m outraged. This is unconscionable,” NASA Administrator Bill Nelson told The Associated Press. “It’s unbelievable that the Russian government would do this test and threaten not only international astronauts, but their own cosmonauts that are on board the station” as well as the three people on China’s space station.

Nelson said the astronauts now face four times greater risk than normal. And that’s based on debris big enough to track, with hundreds of thousands of smaller pieces going undetected — “any one of which can do enormous damage if it hits in the right place.”

In condemning Russia, Secretary of State Antony Blinken said satellites were also now in jeopardy.

The test clearly demonstrates that Russia “despite its claims of opposing the weaponization of outer space, is willing to ... imperil the exploration and use of outer space by all nations through its reckless and irresponsible behavior,” Blinken said in a statement.

There was no immediate comment late Monday from Russia about the missile strike.

Once the threat became clear early Monday morning, the four Americans, one German and two Russians on board were ordered to immediately seek shelter in their docked capsules. They spent two hours in the two capsules, finally emerging only to have to close and reopen hatches to the station’s individuals labs on every orbit, or 1 1/2 hours, as they passed near or through the debris.

By the end of the day, only the hatches to the central core of the station remained open, as the crew slept, according to Nelson.

Even a fleck of paint can do major damage when orbiting at 17,500 mph (28,000 kph). Something big, upon impact, could be catastrophic.

State Department spokesman Ned Price said the U.S. has repeatedly raised concerns with Russia about doing a satellite test.

“We are going to continue to make very clear that we won’t tolerate this kind of activity,” he told reporters.

NASA Mission Control said the heightened threat could continue to interrupt the astronauts’ science research and other work. Four of the seven crew members arrived at the orbiting outpost Thursday night.

NASA astronaut Mark Vande Hei, who’s midway through a yearlong mission, called it “a crazy but well-coordinated day” as he bid Mission Control good night.

“It was certainly a great way to bond as a crew, starting off with our very first work day in space,” he said.

A similar weapons test by China in 2007 also resulted in countless debris. One of those pieces threatened to come dangerously close to the space station last week. While it later was dismissed as a risk, NASA had the station move anyway.

Anti-satellite missile tests by the U.S. in 2008 and India in 2019 were conducted at much lower altitudes, well below the space station at about 260 miles (420 kilometers.)

The defunct Russian satellite Cosmos 1408 was orbiting about 40 miles (65 kilometers) higher.

Until Monday, the U.S. Space Command already was tracking some 20,000 pieces of space junk, including old and broken satellites from around the world.

Jonathan McDowell of the Harvard-Smithsonian Center for Astrophysics said it will take days if not weeks and months to catalogue the latest wreckage and confirm their orbits. The fragments will begin to spread out over time, due to atmospheric drag and other forces, he said in an email.

The space station is at especially high risk because the test occurred near its orbit, McDowell said. But all objects in low-Earth orbit — including China’s space station and even the Hubble Space Telescope — will be at “somewhat enhanced risk” over the next few years, he noted.

Earlier in the day, the Russian Space Agency said via Twitter that the astronauts were ordered into their docked capsules, in case they had to make a quick getaway. The agency said the crew was back doing routine operations, and the space station’s commander, Russian Anton Shkaplerov, tweeted: “Friends, everything is regular with us!”

But the cloud of debris posed a threat on each passing orbit — or every 1 1/2 hours — and all robotic activity on the U.S. side was put on hold. German astronaut Matthias Maurer also had to find a safer place to sleep than the European lab.

NASA’s Nelson noted that the Russians and Americans have had a space partnership for a half-century — going back to the joint Apollo-Soyuz mission in 1975.

“I don’t want it to be threatened,” he told the AP, noting both countries are needed for the space station. “You’ve got to operate it together.”


News
YRTC making a difference in Hastings
  • Updated

The Hastings Youth Rehabilitation and Treatment Center is making a difference in the lives of its female residents and in the Hastings community.

Camella Jacobe, Hastings YRTC facility administrator, and Howard Warford, facility program manager, gave a program update at the Hastings City Council work session on Nov. 15.

“We thank you for the opportunity to be part of your community,” Jacobe said. “It’s been a success in our eyes because we transitioned very well to Hastings. We were welcomed by a lot of individuals in Hastings. We retained a lot of the staff from the Hastings Regional Center program. Recently we’ve been seeing some retirement, which was expected.”

The facility houses girls and young women, ages 14-19 years old, who are adjudicated by the courts. There are 24 beds in the facility, which has been averaging 13 residents.

Youths moved into the Hastings facility on April 12.

“They come to our facility,” Jacobe said. “We work with them to become productive citizens back into the community.”

Hastings YRTC offers a lot of diverse programming for the youths, including gender-specific programs that are evidence-based and allow staff to work with the youths on the issues of trauma and moral reasoning.

“And to be able to empower them as young females,” Jacobe said.

The facility has an educational institution, the West Hastings School, that is fully accredited through the Nebraska Department of Education. One girl graduated with a diploma in May.

“Our girls graduate from our program if they are in the position that they can graduate, or we offer a GED, as well, for them,” Jacobe said.

The program includes group and individual therapy. There are a lot of activities including those emphasizing independent-living skills.

Some of the residents have moved on to independent living programs in Hastings.

“We’re excited to be here,” Jacobe said. “We’re excited to have the opportunity, and we just wanted to let you know what we’re doing and what we’re about.”

Councilmen Ted Schroeder and Butch Eley, who represent west Hastings and Ward Two on the Hastings City Council, were proactive in transitioning the new program into Hastings.

“We were concerned about what was going to take place,” Schroeder said. “The boys were leaving. We felt like a little negativity got out there.”

Schroeder and Eley helped establish an advisory board for the facility that now has eight members.

The advisory board initially met monthly.

“We wanted to make sure we were right on top of it,” Schroeder said.

It now meets every other month with the plan to transition to quarterly meetings next year. Schroeder said it is an active group.

“Being on there myself, I wanted to make sure that everything is right for the community,” he said.

Board members went to YRTC for a pizza party that was attended by four of the residents.

“I was really pleased with those four girls, the stage they were at,” Schroeder said. “You could see they came from troubled families or situations. I was very pleased those four girls might have opportunities. They all talked about how soon they thought they could get out. That’s what you want to hear.”

The girls are looking at their own education and opportunities.

“What we’re really trying to help them with is to get them out in the community,” he said. “We’re working on several things they could be supervised and come out in the community and get some exposure in the city of Hastings.”

Also during the work session, council members reviewed the annual report from the Heartland Pet Connection. According to the report, Heartland Pet Connection, which just completed its 17th year, saw 609 animals from Hastings in the past year.

Of those 609 animals, 272 were cats. Of that number, 116 cats were adopted, 38 were reclaimed, and 132 were euthanized. Of the cats euthanized, 84 were feral cats and two were court-ordered bite cases.

Of 323 dogs, 48 were adopted, 260 were reclaimed, six were reclaimed bite cases, one was a rescue case, and 45 were euthanized. Of the 45 euthanized, four were court-ordered bite cases. The numbers from categories for different kinds of animals don’t add up because there are always animals that carry over from one year to the next that are still in the shelter’s care.

Also during the meeting, council members discussed moving meetings from the Hastings Public Library back to the Hastings City Building beginning in 2022.

City meetings were moved to the library in June out of concern about environmental issues the City Building including mold, asbestos and radon.

Staff members involved in setting up meetings at the library requested moving the meetings back.

“Most of the environmental issues have been mitigated, and it would just make a lot of sense and be a lot easier on our staff if we moved back to city hall,” City Administrator Dave Ptak said.

Lee Vrooman, director of engineering, also gave an update on changes to the city’s emergency snow routes.


State
AP
For Nebraska Rep. Fortenberry, a two-sided challenge in 2022
U.S. Rep. Jeff Fortenberry of Nebraska will likely be facing two opponents in the 2022 election: a progressive Democrat with a lot of support in the state’s second-largest city, and a federal prosecutor in California who has accused him of lying to the FBI
  • Updated

LINCOLN — When he seeks office again in 2022, U.S. Rep. Jeff Fortenberry of Nebraska will essentially face two opponents: a progressive Democrat with a lot of support in the state’s second-largest city, and a federal prosecutor in California who has accused him of lying to the FBI.

The nine-term Republican has always coasted to reelection in his GOP stronghold district, an expanse of rolling farmland and small towns with left-leaning Lincoln in the middle. Now, he’s running with a federal indictment over his head and the prospect of a conviction that could send him to prison and cost him benefits he receives in office.

He’s also likely to face state Sen. Patty Pansing Brooks, a Democrat with a strong fundraising background who is well-known in Lincoln. Pansing Brooks announced her candidacy for Congress on Monday, pitching herself as a results-focused candidate who would push for better phone and internet service in rural areas and lower prescription drug costs. She’s the only Democratic candidate to announce.

“No question, it’s going to be a tough race, but I’m just going to do the best I can,” Pansing Brooks said in an interview. “I have an ability to make friends on all sides of the aisle.”

Her campaign is still a long shot, based on both history and Republican dominance in the district. Other Democrats who showed promise at the outset of their campaigns have ended up losing to Fortenberry. Still, prominent Democrats are hopeful that, with the indictment and a newly drawn congressional district, they might have a chance to unseat Fortenberry.

“He’s been wounded by the scandal, and I think Patty will have a very well-funded, top-drawer campaign,” said Dennis Crawford, a Lincoln attorney who challenged Fortenberry unsuccessfully in 2014. “It’s still a heavy lift, and would require an upset, but the chance is still there.”

Crawford said the district is difficult for Democrats because so much of it is rural and Republican-leaning, which offsets the party’s advantage in Lincoln. He said that also made it tough to raise money, because the district is widely seen as unwinnable.

Pansing Brooks won her legislative seat twice in a heavily Democratic Lincoln district, but is ineligible to run again because of term limits. She pointed to her leadership experience in several major fundraising initiatives, including a $9.6 million push to redevelop Lincoln’s Centennial Mall, a $6 million Union Plaza fundraiser in the city and a successful $250 million Lincoln Public Schools bond issue.

Fortenberry has more than $897,000 in cash on hand for his campaign, according to the Federal Elections Commission, and stepped up his fundraising around the time prosecutors announced charges against him.

The district remained GOP-friendly after lawmakers redrew the state’s political boundaries earlier this year, but less so with the addition of Democratic-leaning areas of Bellevue, an Omaha suburb. The district also lost Republican-heavy Saunders County to the much more competitive 2nd Congressional District.

Fortenberry also faces the prospect that more information about his case will trickle out during the campaign, giving his opponents ammunition to use against him. His trial in U.S. District Court in Los Angeles likely won’t take place until February at the earliest.

Fortenberry was accused last month of lying to the FBI and concealing information from agents about an investigation into illegal campaign donations from a Nigerian billionaire. He has pleaded not guilty.

Despite the charges, many prominent Nebraska Republicans have publicly maintained their support. Gov. Pete Ricketts defended Fortenberry on Monday as “a man of integrity” and said he found the allegations difficult to believe, but acknowledged that it could make it tougher for the congressman to win reelection.

“I think it does present an additional challenge for Congressman Fortenberry, but again, he’s got to go through this process with regard to the courts,” Ricketts said.

In a statement, Nebraska Democratic Party Chairwoman Jane Kleeb praised Pansing Brooks for her work in the Legislature to help vulnerable children and said she will “restore dignity to the office and bring her full heart to get work done for the people of Nebraska.”

Pansing Brooks has been a vocal champion of LGBT rights, but also worked with conservatives on legislation aimed at sex trafficking and Native American issues. She kicked off her campaign Monday with a tour of the district, where she planned to speak about the need to upgrade bridges and roads.

She said most Nebraskans “don’t live in a partisan prism,” and want to see legislation that improves their lives.

“Things have become so partisan, and I think that’s where Patty will really have an advantage,” said Sen. John McCollister, a Republican who has frequently clashed with his party and who appeared in Pansing Brooks’ campaign announcement video. “She’s able to bridge the gaps like nobody I know. And so if it can be done, Patty Pansing Brooks will make it happen.”


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