Economists back moderate inflation

WASHINGTON » Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policymakers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough.

Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.

The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Barack Obama’s nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.

The school board in Anchorage, Alaska, for example, is counting on inflation to keep a lid on teachers’ wages. Retailers including Costco and Wal-Mart Stores Inc. are hoping for higher inflation to increase profits. The federal government expects inflation to ease the burden of its debts. Yet by one measure, inflation rose at an annual pace of 1.2 percent in August, just above the lowest pace on record.

"Weighed against the political, social and economic risks of continued slow growth after a once-in-a-century financial crisis, a sustained burst of moderate inflation is not something to worry about," Kenneth S. Rogoff, a Harvard economist, wrote recently. "It should be embraced."

McDonald’s ousts ketchup from Heinz

McDonald’s has lost its taste for Heinz ketchup.

The fast-food giant said in a statement Friday that it is cutting ties with the condiment company after 40 years due to management changes there. A former Burger King CEO became head of Heinz in June after the company was bought by Warren Buffett’s Berkshire Hathaway and 3G Capital. 3G, a Brazilian investment firm, also controls Burger King.

Ex-worker who tried to stop assault won’t rejoin Walmart

HARTLAND TOWNSHIP, Mich. >> A man who was fired by a Walmart store in Michigan after interrupting an assault in the parking lot said Friday he would reject the offer to return to work.

Kristopher Oswald, 30, said he believes public attention has embarrassed Walmart and that the Bentonville, Ark.-based company would look for reasons to fire him again, although a spokeswoman said there would be no retaliation.

"I wholeheartedly believe I’m being set up for the fall," Oswald told The Associated Press. "I believe the only reason I was offered my job back in the first place was that I was on TV. They got three days of bad publicity, people going in and protesting, saying they wouldn’t shop there anymore."

On Thursday, he told the Livingston County Daily Press & Argus he wanted a formal apology and the firing for violating store policy to be removed from his personnel record.

Walmart spokeswoman Brooke Buchanan told the AP that Walmart had apologized and had a strict policy against retaliation. She said there would be no mention of the dismissal in Oswald’s file.

"The offer’s on the table," she said. "If he wants to come back to Walmart, we will assure he will not be retaliated against and we will provide safe working conditions for him."

She said the company also had offered to reimburse Oswald for lost wages.

Oswald has said he was on his break at the store in Hartland Township northwest of Detroit about 2:30 a.m. Oct. 13 when he saw a man grabbing a woman, who screamed for help. He said he intervened but the man attacked and threatened to kill him. Oswald said he was able to get on top of the man, but two others jumped him from behind.

Total recall

Kraft Foods Group Inc. is voluntarily recalling some of its Kraft and Polly-O string cheese because they may spoil and change color before the expiration date on the packages. The Northfield, Ill., company said Friday that about 735,000 cases of the affected products were shipped to customers in the U.S. They have "Best When Used By" dates from Oct. 25 through Feb. 11.

Kraft says it issued the recall after receiving several reports from consumers about cheese going bad. The company has ceased the production and distribution of the affected products and is investigating the problem.

The affected products were made in a plant in Campbell, N.Y. Consumers should not eat the recalled product and should return it for an exchange or refund.

Contact Kraft Foods Consumer Relations at 800-816-9432 between 3 a.m. and noon Hawaii time.

—Star-Advertiser news services

Elmo, Furby hit Target’s hot toy list

NEW YORK >> An Elmo that gives out hugs, Barbie’s Dream House, and a new striped Furby all made Target Corp.’s list of top toys for the holiday season.

Retailers place their bets early on which toys will be hits and then spend heavily to market them to spur sales during the holiday season. It’s a crucial time because holiday sales can make up to 40 percent of a retailer’s annual revenue.

Toy sales have been weak in North America, Europe and Australia, due to a weak video game market, an uncertain economy and continued popularity of electronic gadgets like smartphones and tablets. BMO Capital Markets analyst Gerrick Johnson estimates total toy revenue will be down 2 percent to about $21 billion.

Among the top picks: Sesame Street’s Big Hugs Elmo, a mechanical Elmo that gives out hugs and sings songs; Hasbro’s Furby Boom, a robotic toy pet; a Target exclusive Mattel Monster High doll called Power Ghouls; and SpinMaster’s Flutterbye Flying Fairy, a doll that can flutter on air.

To promote its "hot toys," Target is featuring Jonna Mendez, a former CIA agent turned toy expert, who is giving tips to parents on how to figure out which toys kids really want. For the full list of Target’s 33 top toy picks, visit Target.com/KidsGifts.

—Associated Press

COMING UP

» Today: Bank of Hawaii, Merck and Apple report quarterly results.

» Tuesday: Labor Department releases the Producer Price Index for September. Commerce Department releases retail sales data for September.

» Wednesday: Central Pacific Financial and American Savings Bank report quarterly results.

» Thursday: Volkswagen AG, Sony, Time Warner Cable, Exxon Mobil, MasterCard and Starbucks report quarterly results.

» Friday: Automakers release vehicle sales for October.