Inside China

Key Points

• The podcast episode features economists discussing U.S. inflation data, highlighting that CPI remains elevated at around 3%, above the Federal Reserve's target.
• Data quality issues are noted due to a government shutdown affecting BLS surveys and increased use of statistical imputations, leading to larger margins of error.
• The conversation shifts to China, introducing guest Logan Wright, who researches China's financial system and economy, expressing skepticism about the accuracy of China's official GDP data.

Summary

The podcast episode, hosted by Mark Zandy with co-hosts Chris and Matt, begins with a discussion on recent U.S. inflation data. Matt provides a detailed analysis of the December Consumer Price Index (CPI), noting a 0.3% monthly increase, with contributions from rising food and energy prices. Year-over-year CPI is reported at 2.6%, but adjustments for distortions caused by a government shutdown in October suggest a truer rate of about 3%. This level is considered uncomfortably high, roughly a percentage point above the Federal Reserve's target. The conversation also addresses data quality concerns, revealing that approximately 20% of CPI prices are now imputed due to funding cuts, with 40% of those imputations using a less precise method, thereby increasing measurement uncertainty.

The episode then introduces guest Logan Wright, a partner at Rhodium Group, who specializes in China's economy and financial system. Wright shares his background, including 21 years in China and expertise in central bank policy and financial market analysis. The hosts note his bearish outlook on China, partly derived from his research into alternative methods for estimating Chinese GDP, which questions the reliability of official statistics. The discussion sets the stage for a deeper exploration of China's economic conditions and their global implications, though the provided transcript concludes before this analysis fully begins. The episode blends technical economic data review with broader geopolitical economic insights.