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- [00:00]
Commercial Narrator
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Caitlin McCabe
Eyes are on Madrid this week as the US And China square off on trade talks once again. Plus a deep dive into why Americans aren't responding to economic surveys and what that means for crucial government data.
- [00:30]
Paul Kiernan
The precision of things like the unemployment rate is diminished when you have a decline in response rates from more than 90%, which is what it was for decades, to less than 70%, which is what it is now.
- [00:43]
Caitlin McCabe
And could we be in the midst of a modern day gold rush? It's Monday, September 15th. I'm Caitlin McCabe for the Wall Street Journal and here's the AM edition of what's news, the top headlines and business stories moving your world today. Shares in Nvidia have slipped in off hours trading this morning after China's markets regulator said the AI chip giant violated the country's anti competition law, according to a preliminary probe, adding that Beijing would continue its investigation into the company. China approved an acquisition by Nvidia of mellanox technologies in 2020 after the chip juggernaut agreed to conditions including guaranteeing supplies of chips to the country. But since 2022, the US government has blocked Nvidia and other American chip vendors from selling many of their best AI chip. The news could potentially complicate US And China trade talks taking place in Madrid today. Chinese owned social media app TikTok is central to the discussions with its U.S. operations, facing a Wednesday deadline for parent company ByteDance to sell its controlling stake. If it doesn't, TikTok could face a U.S. ban, though the White House could extend the Wednesday deadline, officials have said. Even so, Trump's team sees TikTok as a litmus test of sorts, one that will indicate if China is willing to make concessions in trade talks. So far, China hasn't acted on Trump's demand for more soybean purchases or a crackdown on the flow of chemicals used to make fentanyl. We've previously reported that Beijing won't take action on the drug until Trump drops the 20% tariffs that were imposed as punishment for China's role in the fentanyl trade.
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Paul Kiernan
We've hit them very hard in so many other ways. I don't know if you know, if you know what they're paying right now. What are they paying right now?
- [02:22]
Caitlin McCabe
President Trump there, speaking to reporters about that meeting in Madrid where what's most at stake for Beijing is a potential visit from Trump himself, which Chinese officials have been pushing for for the last two months. This such a visit would hand Xi Jinping a diplomatic victory at a moment when newly released data shows China is grappling with a broad economic slump. Journal reporter Hannah Miao says new data released Monday showed that momentum in retail sales, industrial production and investment all slowed while unemployment ticked up and the housing market continued to struggle.
- [02:52]
Hannah Miao
This data does likely add to the pressures for trade negotiators to come out with favorable terms. However, we have seen exports continue to be resilient than expected this year. China has found growing markets in other parts of the world even as trade with the US has fallen, so that does give negotiators some room, although the slowing momentum we saw in August does again bring back the attention of both trying to secure favorable trade outcomes in the trade talks, as well as focusing on its domestic economy and boosting domestic consumption as some of the external levers are a bit more constrained under the current trade environment.
- [03:46]
Caitlin McCabe
It's been roughly three days since 22 year old Tyler Robinson was taken into custody for the shooting of conservative activist Charlie Kirk, and investigators are still trying to piece together his background. Friends, family and acquaintances of Robinson have been talking to authorities, Utah governor Spencer Cox said Sunday. But for now, Robinson himself isn't cooperating. Instead, Cox said, investigators are collecting forensic evidence and working to better understand Robinson's motivations.
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Paul Kiernan
We can confirm that, again according to family and people that we're interviewing. He does come from a conservative family, but his ideology was very different than his family and so that's part of it.
- [04:25]
Caitlin McCabe
Formal charges against Robinson are expected Tuesday and tomorrow also marks the start of the Fed's next two day policy meeting, where central bankers are widely expected to cut rates for the first time this year. Federal Reserve governor Lisa Cook will be among the voting policymakers despite an ongoing tussle with President Trump, with new documents casting doubt on Trump's claim that she committed mortgage fraud. For weeks, the Trump administration has claimed that Cook submitted fraudulent info on her mortgage applications by claiming to lenders that her homes in Atlanta and Michigan were her primary residence. Trump has used the allegations to try to oust Cook from the Fed board. But at least two documents, which were reviewed by the Wall Street Journal, show that Cook described her Atlanta condo as a vacation home. Neither Cook nor a White House spokesperson immediately responded to a request for comment. Meanwhile, the value of gold has ballooned by 39% this year in a rally not seen since 1979. Back then, a global energy crisis fueled an inflationary shock that thrashed the world's economy. This time around, the run up to record prices stems in part from the White House. Investors big and small are rushing to shield themselves from an uncertain outlook for the economy and its role in the world. Coming up, we take a look at how survey fatigue is undermining government economic data. That story after the break.
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- [06:10]
Caitlin McCabe
Economists and social scientists are growing increasingly worried about a troubling trend that has emerged in the last few years. Some households and businesses just aren't responding to economic surveys, including most notably the kind used for the monthly jobs report. President Trump's firing last month of Erica McIntarfer, the former Bureau of Labor Statistics commissioner, has cast a fresh spotlight on the problem as Trump has levied intense criticism on the agency and the way it collects its data. But Trump's nominee to replace her could face an uphill battle in fixing the problem, says Journal economics reporter Paul Kiernan. So, Paul, it sounds like a lot of really crucial economic surveys in the US Are done completely voluntarily. There's no mandatory requirement to fill them out or incentives to get people to respond.
- [06:53]
Paul Kiernan
Yeah, that's right. There's a couple of surveys that are really important for a high frequency, almost real time measure of the economy. One is conducted by the Census Bureau, but then kind of analyzed by the Bureau of Labor Statistics. It's called the Current Population Survey, and it's a survey of 60,000 households every month. So the Current Population Survey is used to calculate the unemployment rate and then for the other part of the jobs report, which is the number of actual jobs that employers are adding or subtracting every month, and wages that is also done through a voluntary survey that is conducted by the Bureau of Labor Statistics. It's called the ces. And participation in both of those surveys has been going down.
- [07:37]
Caitlin McCabe
Is there something in particular that's driving this?
- [07:40]
Paul Kiernan
A couple of the theories are survey fatigue. One idea is that many decades ago, most Americans didn't get asked what they thought about things very often, and so they were happy to answer when they did. Nowadays, you're being asked to answer questions about all kinds of things. Online surveys. You know, you go to a restaurant, you get asked if you enjoyed your service this evening. And so the value of the answers that anyone is willing to provide has gone up. Another component is likely to be the decline of landline telephones. When someone calls you on your cell phone, you can look and see who's calling. And if it's a number you don't recognize, you might not answer. Really, you probably won't answer. And then we seem to be experiencing a decline in trust in government and really all institutions. As the former BLS commissioner, Trump's first BLS commissioner put it. To me, it seems to be a generational thing and people are just becoming more disconnected. And this is measured in a variety of ways. Decline in civic responsibility. It's almost like a cultural shift. Some of the business people I spoke to alluded to this. I talked to a small businessman out in Arizona. He helps run a family owned jewelry supply company. And he says, you know, during the pandemic, the small businesses we were all forced to close and Walmart and Amazon were allowed to remain open. And so now the government comes and asks me to help them out with a survey voluntarily, and I'm just not going to do it. You got to scratch my back if I'm going to scratch yours. And so he says anything he gets from the bls, because it's voluntary, he throws it in the trash.
- [09:17]
Caitlin McCabe
And from your reporting, it seems like there are also factors within the BLS that are impacting the participation rate. Is that right?
- [09:25]
Paul Kiernan
I spoke with two former commissioners of the BLS and they were like, believe us, the response rate has been on everyone's minds for years and years and years, because it's been going down for years and years and years, and it's been going down all over the world. One of the things that seems to be exacerbating the problem is that funding and staffing at the BLS have been declining for many years. Both are down about 13 or 14% since 2015, and on top of that since January. I'm told that staffing at the BLS may be down as much as 20%. That stretches everybody thin. It means that the PhD economists who you might have had researching ways to modernize and improve data collection and fill in the blanks where you don't have data, solve the problems of the futures. Some of those PhD economists are being drawn into data collection, which is a relatively low level task. In addition, the reduced headcount is curbing the BLS's ability to follow up with people who don't respond, especially businesses who don't respond for the jobs report survey that the BLS conducts. There's three deadlines. Ideally, businesses will say in June what their payroll was and then their answer will be incorporated into the June jobs report. But if they respond in July or August, their answers still get worked in. And that's one of the reasons we've seen these big revisions.
- [10:45]
Caitlin McCabe
Paul, super interesting story here. Really appreciate you joining us today.
- [10:49]
Paul Kiernan
Thanks a lot, Caitlin.
- [10:50]
Caitlin McCabe
And that's it for what's news for this Monday morning. Today's show is produced by Kate bullivant and Rema McKenna. Our supervising producer is Sandra Kilhoff. And I'm Caitlin McCabe for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.
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