Reporting on Inflation and the U.S. Economy

Tuesday, September 13, 2022
REUTERS/Sarah Silbiger

Business and Policy Reporter, WFMZ-TV

Fellow for International Political Economy, Council on Foreign Relations


Vice President for National Program and Outreach, Council on Foreign Relations


Adjunct Senior Fellow, Council on Foreign Relations

Zongyuan Zoe Liu, CFR fellow for international political economy, discusses global factors and trends contributing to inflation in the United States along with Justin Backover, business and policy reporter at WFMZ-TV 69 in Lehigh Valley, Pennsylvania, who suggests how to frame stories on this subject for local communities. The series is hosted by Carla Anne Robbins, senior fellow at the Council on Foreign Relations.



FASKIANOS: Welcome to the Council on Foreign Relations Local Journalists Initiative Webinar. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR.

CFR is an independent and nonpartisan membership organization, think tank, and publisher focusing on U.S. foreign policy as well as an educational institution. CFR is also the publisher of Foreign Affairs magazine. As always, CFR takes no institutional positions on matters of policy.

This webinar is part of CFR’s Local Journalists Initiative, created to help you draw connections between the local issues you cover and national and international dynamics. So our programming puts you in touch with CFR resources and expertise on international issues and provides a forum for sharing best practices.

So, just as a reminder, this webinar is on the record. The video and transcript will be posted on our website after the fact at CFR.org/localjournalists.

We are pleased to have Zoe Liu, Justin Backover, and host Carla Anne Robbins with us today to discuss reporting on inflation and the U.S. economy. We’ve shared their bios with you, so I’ll just give you a few highlights.

Dr. Zoe Liu is a CFR fellow for international political economy at here. Her work focuses on global financial markets, sovereign wealth funds, supply chains of critical minerals, development finance, emerging markets, energy and climate change policy, and East Asian-Middle East relations. Previously, she was an assistant professor at Texas A&M’s Bush School of Government and Public Service and completed post-doctoral fellowships at the Columbia-Harvard China and the World program and the Center for International Environment and Resource Policy at Tufts University’s Fletcher School.

Justin Backover is the business and policy reporter for the WFMZ-TV 69 news team in Lehigh Valley, Pennsylvania. He leads nightly news coverage on economic topics from Main Street to Wall Street, including federal and state economic policy, infrastructure spending, and the ongoing recovery from COVID-19. And prior to joining WFMZ, Justin Backover was a junior reporter at WTXF 29 in Philadelphia.

And, of course, Carla Anne Robbins, she’s an adjunct senior fellow at CFR, the host of this webinar series. She is the faculty director of the Master of International Affairs program and clinical professor of national security studies at Baruch College’s Marxe School of Public and International Affairs. Prior to that, she was deputy editorial page editor at the New York Times and chief diplomatic correspondent at the Wall Street Journal.

So thank you all for doing this.

Carla, I’m going to turn it over to you to take the conversation away.

ROBBINS: Thank you so much, Irina, and I will tell you that all of my friends at the Wall Street Journal would always say, Carla, don’t write about economics. It’s not—but I learned a lot by sitting next to them. So at least I can ask questions.

Zoe and Justin and Irina, everybody—and everybody on this webinar today, thank you so much and thank you so much to all the journalists who do the jobs that you do, particularly right now, which is such an extraordinary time to be a reporter, and I miss it. I miss it every day.

So, Zoe, can we start with you? Just actually a little bit of just orientation of everybody here. A lot of people here have already been with us and know it, but we’ll chat among us for about twenty, twenty-five minutes, and then we’ll throw it open to the group.

If you have questions along the way, do not hesitate to put them in the chat—raise your hand or whatever—because we want this to be very informal. And, of course, Justin, ask Zoe questions. Zoe, ask Justin questions. And we will all ask each other questions and learn a lot, I hope.

So, Zoe, can we start with a level set? This is—today’s a tough day to be the person who cares about the market, of course. What is going on with the U.S. economy? I mean, unemployment is historically low—3.7 percent. When I go to fill up my car and see gas at $3.50, you know, I feel pretty good. Then I go into the grocery store and I’m blown away at the prices.

And today’s inflation report—an 8.3 percent rise in CPI was, clearly, not what Wall Street or the White House wanted to hear.

So can you give us some sort of a sense of what’s going on right now and where it is likely going, and if we don’t know where it’s going why don’t we know?

LIU: Yes, and thank you very much, Carla, for this great opening ground-setting question, I would say. And also, please let me just say that I’m very honored to be here. You know, in my research I rely a lot on conversations with journalists and as well as the journalists’ reporting. So thank you all very much for your great work.

And you know, it just goes back to your question. Yes, I would say, absolutely, right now it seems that if we look at all the economic indicators it looks like we are in a very chaotic time because it looks like all the indicators are pointing towards different directions.

You know, are there signs of strength? Yes, there are signs of strength. For example, you know, consumer spending grew relatively faster, especially in the second quarter, and we are also talking about relatively growing and especially rebounding corporate profit. And then there is also at the individual level we are talking about personal income level goes up, which is, obviously, powered by a very strong job market and a relatively low unemployment rate, as you mentioned earlier.

And then, on the other hand, are there signs of weakness or even triggering certain concerns about a hard landing or even recession? Yes, there are. You know, on the one hand, we are looking at businesses might have pulled back in terms of the investment in equipment as well as in buildings in Q2 and then we also see a falling in terms of construction activity at home, which is—you know, the fall is relatively—has been relatively sharper than we anticipated.

Basically, it was primarily driven by relatively expensive to borrow right now. And then those are, you know, like business investment construction. And then, finally, I think, Wall Street likes to use a very concerning recession indicator card, the inverted yield curve. The idea was, you know, normal.

So there’s nothing significant—you know, magic about it. It’s just that, you know, in normal times, near-term yield is lower than longer-term simply because of the maturity aspect of it.

ROBBINS: High yield. Yeah.

LIU: Right. But now, you know, and for the past half of century, you know, when economic historians look at the U.S.—in particular, U.S. recession numbers and it’s obviously that there is this, you know, inverted yield curve seems to be a leading harbinger. And it happened twice, if I remember correctly—in April once and then early July, another time. So people started to be worried to what extent this might be leading to a recession.

However, I will say—well, I would say I’m personally relatively optimistic in terms of our economic outlook and I think right now we are not in a recession or at least, you know, it’s not officially declared by the National Bureau of Economic Research, right, specifically because there are signs of—a lot of signs of (oxygen ?) and then, more specifically, for the six indicators that the MDR was looking at in terms of defining recession, every single measurement of the six indicators have increased, although, you know, the degrees is different—is slightly different.

So I would say, you know, right now, we are not in a recession and we haven’t received the official designation yet. However, the feeling of—you know, the feeling of being in a recession is totally different than, say, a technical definition of recession.

I’ll just stop there and hear what Justin wants to say.

ROBBINS: Great. Great. And there’s a lot of what you said in there that I’m going to want to ask more questions about. But let’s turn it over to Justin.

So, Justin, I was looking at what you’ve been doing and you’ve been doing some pretty optimistic stories from the ground. What does it feel like, you know, where you’re reporting and is there—do people feel like they’re in a recession?

I mean, there’s high employment numbers there. Are people sort of, you know, caught between this, you know, Faye Dunaway in the end of Chinatown—you know, my daughter, my sister, my daughter, my sister. It’s inflation. It’s high unemployment—high employment.

BACKOVER: Well, it’s really—to your point, it’s a question of who you ask, right. So to Zoe’s point, when we talk to the experts, which we’re always looking to do in our reporting to back up, you know, the human experiences we’re trying to bring to people, we do get a more optimistic picture.

However, depending on who you talk to on the ground you get a different answer because as we saw, right, in today’s inflation numbers, core inflation on consumer products is up. Your point, Carla, about going to the grocery store, people tangibly feel that.

However, when you look at an industry, like manufacturing, in my area, which is a huge part of our GDP, there is a sense of optimism. Business owners, even though they’re incurring higher costs they don’t personally feel, at least anecdotally, that they’re headed towards a recession, at least comparative to what we experienced in 2008-2009.

So to your point—to Zoe’s point about a yield curve, you know, I was one of the people trying to explain to our viewers, you know, the White House has a different definition than the economists and what does it explain, and I got a lot of flak for saying that although it’s inverted for two consecutive quarters that doesn’t necessarily constitute a recession.

You can argue about that until, you know, the sun sets. At the end of the day, I try to not be alarmist in the reporting. So when the experts are telling us that there’s good signs, when people on the ground are telling me, yeah, I’m paying more but I can still make my rent, I try—I have tried to skew the reporting to something that leans a little bit more on not being alarmist, especially considering coming out of the pandemic. I think local news is very aware of the fact that you don’t want to push the needle too much. You don’t want to freak people out too much, and especially when you’re talking about a topic such as inflation public sentiment is just as important as the metrics, right?

So that’s kind of the needle I feel like I’ve been trying to thread for the last two years now.

ROBBINS: So how do you—I mean, how long is a story that you do?

BACKOVER: Well, it can range. The general rule is about a minute thirty, like a typical news package. But I did a package on labor a few weeks ago that was three minutes long. It really depends on how much time we think the viewer needs to digest something that’s pretty complex.

ROBBINS: So how do you explain an inverted yield curve in a minute thirty?

BACKOVER: Well, that’s an interesting question.

I mean, you know, you have to get good at trying to explain it in the simplest terms imaginable and not really trying to get into the minutiae of it. You could spend a lot of time trying to really parse out every detail, but you really just need to stick to the idea of, OK, here are bonds. Here’s how they work. This is what the yield curve means. This is what some people subscribe to as a definition. Move on. And if you can, wrap that around a human being that’s experiencing whatever you’re talking about.

A yield curve, a little difficult. Inflation, a lot easier.

ROBBINS: So I must admit, and it shows you how effete I’ve gotten in my latter years of my life. I mean, I was a foreign correspondent when I did actually get to talk to real people on a regular basis, and then I became a Washington reporter and I never talk to any real people. But the dog park, this has become my new indicator, and people in the dog park say the following thing to me all the time, but gas was below $3 when Donald Trump was president. You know, my pasta cost next to nothing when Donald Trump was president.

So I sort of wanted to ask and go back to both—to Zoe and to Justin.

Zoe, how much control does government have over what’s actually going on right now? And when I say government, let’s parse it out. Of course, we’ve got the Fed and—which has a pretty blunt instrument but it’s probably the most—in theory, the most powerful instrument, which is interest rates.

And then you’ve got—you know, you’ve got White House and Congress. I mean, everyone’s happy to blame government for this but how much power and responsibility does government bear for this? Because they’re, certainly, going to pay the price in the midterms.

So I’m just wondering, you know, a little further reality testing here. You know, who’s to blame for this and how much—you know, how much can they possibly even deal with it, fix it, address it?

LIU: That’s a great question, Carla. Yeah, but at the same time, it’s also a very loaded question as well, you know. From a historical perspective, I mean, there have been generations of scholars and even Federal Reserve chairs, they argue that, well, there are so many times that the Federal Reserve have been the driver or the engine of inflation and in this time, you know, is this time different and how different this time is. It becomes the question people would argue, right?

And then, yes, go back to the other part. You know, there is also the fiscal branch, which is, you know, basically, government in charge of spending money and tax corporations and individuals.

So, right now, I think, right now, we—the reason we are here today, obviously, has endogenous factors, too, inside of the U.S. economy. So from, you know, if I’m—when I’m analyzing why we are here today, I tend to go back to the very basic, you know, like Y equals to 2C plus I plus net import and export—you know, to the very basic function—and thinking that, you know, which part might have caused, relatively, imbalance.

So, on the one hand, we do have the fiscal—we do have a large amount of fiscal expansion, especially during the pandemic. You know, the government had the PPP loans and then a lot of unemployment support. And then, on the other hand, we also have a very—relatively eased monetary policy during the pandemic. You know, the Federal Reserve, essentially, purchased junk bonds for a period of time, which, from my perspective, it almost blurred the lines between the equity market and the bond market.

So the idea was if the Federal Reserve are busy putting down a floor to support every type of asset, then what is equity? What is bond? So, therefore, you know, with this relatively stimulus policies on the fiscal side and on the monetary side, and then at the same time economic lockdown when people were not necessarily buying stuff, obviously, you have a huge—you have an oversupply and the idea of money—the idea of inflation is actually very simple.

You can—we can just think about money the same as just, you know, avocados being priced in Trader Joe’s or Whole Food. The idea is if you have oversupply, obviously, price goes down. And here inflation means, you know, basically, measured in dollar terms it literally means dollar lost its value as measured by stuff that we can buy, right.

So if we have over—if we have abundant supply of money on the market, obviously, we feel it when we go to the gas market or go to fill up our car, get a yogurt, and things like that. And then compounded on that—on top of that there is also exogenous factors such as, you know, Russia’s invasion of Ukraine, supply chain in China, you know, COVID lockdown and all that.

So that’s, basically, the endogenous and exogenous factor. It’s not just, you know, our own fault, I would say.

BACKOVER: And I would—just to add, if I could, to your question about the government’s responsibility, right, you get to an age-old question here, which is that administrations generally get more or less credit than they should get in terms of inflation and in terms of pricing, and I think that although people understand the factors at play, they don’t really have the time on their day-to-day lives to get into the minutiae.

So it, ultimately, ends on the responsibility of the administration. And even when you explain these factors, which I think people do tangibly understand—they understand the war in Ukraine, they understand supply issues, they experience those issues—but they also have seen a considerable amount of federal spending and often they can’t divorce those two things from one another. So you’re having—I think, on the ground perspective there is a lot of blame laid at the administration’s feet.

If you looked just a few weeks ago, the administration touted that there was a $300 billion deficit reduction in their spending bill and then forgave college debt. Now, regardless of how you feel about that, they canceled each other out.

So I think people, when they get the headlines from the local news at night, they’re just seeing a lot of spending, they’re seeing a lot of prices going up, and they are blaming that on the administration.

And the Federal Reserve also—you know, many people feel they acted too slowly. So you’re playing catch up and people now, I think, all they want to do is look for that straw man and that’s the administration right now.

ROBBINS: Not good for the midterms is what you’re saying here?

BACKOVER: No. I mean, not at all, you would assume. I mean, there’s other factors—historic factors—that we could never have, you know, anticipated for two years ago. But at the end of the day, I think people are spending an extra $200 a month for a family of four to gas up their car and, at the end of the day, they are going to blame that on who’s in the White House.

ROBBINS: So are people—I mean, Justin, are people feeling—I mean, I must say that I’ve really noticed the drop in gas prices and are people feeling better about that or is it all offset by food prices?

BACKOVER: I think that people feel better about it but there’s this lingering of, well, when is it going to go back up again? You know, you have this anticipation that it’s going to get worse. That has maybe improved slightly, but you often see viewers or even just people that I know in my own day-to-day life they’ll say, oh, yeah, well, it’s, you know, $3.50 but it was $2.50.

So it’s hard to say. I think that people just—I think people are so conditioned from the last recession that they’re waiting for it to get very bad, even if it looks better.

ROBBINS: So, Zoe, and you were very nice to say that you rely on reporters for information and learning from us, and we appreciate that. Thank you. We’re so used to people beating up on us all the time.

But if you take—you know, it would be good to have, I mean, a friendly but critical view. What do you think we do wrong when we cover complex economic stories and—I mean, this is hard stuff to write about and it’s—you know, it’s hard stuff to write to tell in ninety seconds and it’s hard stuff to write about in six hundred words and—or eight hundred words, whatever it is that people get these days. They get less than I used to get.

But, you know, what do you think that we get wrong and how can we fix it?

LIU: Yeah. Thank you, Carla, for the question.

I think, you know, actually, in my own writing I have been having a lot of sympathy to journalists of style of writing, and I actually did—you know, studied Bloomberg way, you know, the kind of like—you know, the four-paragraph style. And I learned a lot about how to parse out the noise and the even—not necessarily incorrect, but the redundant information from the core information and all that. So I had a—I have been having a lot of sympathy to journalists’ writings. But kudos, you know, everybody here trying to help out—help the broader audience understand what has been going on, especially our—you know, our relatively fast-changing environment of today.

And I would say—I would be cautious in terms of, you know, what did the journal—what a journalistic article or journalistic reporting may get wrong, because I think as long as the (force in credit?) is credible, sometimes it’s not necessarily that the information itself is wrong. Really, what it’s—what may came across or what may come across, you know, misleading might be how the numbers get interpreted and what set of numbers you are choosing, because especially now, you know, it really matters what set of economic indicators or political indicators you are looking at.

I mean, if you are looking—or take—you know, we talk about in the United States. And we—if we, you know, should hear, let’s say, talking about, I don’t know, like, Japan or China, you know, then the situation would be completely different. And if you just look—if you look at, you know, the classic Chinese economic indicators—if you just look at the GDP growth, if you look at housing market—you might realize, oh, you know, things are—China’s economic growth prospect is not good. It may no longer reached—well, this year definitely not going to reach 5.5 (percent) growth target. But we don’t necessarily get a real sense how bad it could be, right? So sometimes we need an alternative set of indicators to try to help us to get or to sort of decipher what are the key underlying factors that might lead to a longer-term economic slowdown.

And using—again, using China as an example, you know, if we—we are trained to look at the housing market. We are trained to look at, you know, unemployment, especially youth unemployment, right, and then on top of that, you know, for a period of time, especially around—you know, around the time of the—in the immediate aftermath of global financial crisis, the Keqiang index was popular for a while because, you know, it was the three indicators it was looking at—the average of electricity consumption, right, logistics volume and, I believe, sales or something like that. It’s, like, the average of the three, right?

And but then for a period of time people started to realize, well, you know, these type of indicators may not necessarily capture the tech sector and the innovation capacity that are driving the Chinese economy. Therefore, people started to no longer talk about it.

However, that does not necessarily mean that set of leading actors no longer relevant for today. And in many ways I think it’s probably very much relevant for today because, on the one hand, we are talking about China is having severe headwind in terms of—in terms of innovation because of, you know, U.S.-sanctioned export controls and all that and then COVID lockdown. And then, on the other hand, right now we do see a lot of stimulus measures coming from both the People’s Bank of China as well as the—China’s ministry of finance.

So I guess, you know, just to quickly answer your question, I oftentimes find, you know, it’s not that the journalists report—get things wrong. It’s how we might choose the set of data and indicators that can help people capture the picture because, you know, for a thousand-word or for a seven-hundred-word article you cannot capture every single aspect. And so which part captures it—the part that you capture reflects whatever conclusion you’re going to get.

And, you know, depending upon which sector you’re looking at, which the indicators you are looking at, that’s—it’s always good to have a debate.

ROBBINS: Well, and yes, and then the question becomes who you turn to.

So, Justin, how do you do that? I mean, who do you choose to be your guide among this sort of thicket of data that’s out there? Zoe mentioned NBER, which is the National Bureau of Economic Research. But let’s face it, most reporters on deadline don’t have time.

I remember that pile of those yellow books that they used to put out, those little pamphlets. I’m really dating myself here. It’s all online now. But yes. But most reporters on deadline don’t have time to be going through monographs.

So how do you—even a story as simple as today—and there’s nothing simple in economics—you know, that says everybody expected inflation to go down it’s just—and people are disappointed today—how do you report a story like that? Who do you go to? I know how you do a story on the ground from that. But how do you get the sort of—more of the wider explanation of what’s going on here and how to interpret those numbers? Who do you turn to?

BACKOVER: Well, I would say, first off, your best source is the one that answers your email while you’re on deadline.

ROBBINS: So true.

BACKOVER: But what I would say is that, so I’ve been in the current station I’m at for four years now. So after, you know, building a rapport with a lot of experts, and I always tell people you should be turning to whatever’s most immediately around you that could be a resource.

That could be an Economic Development Corporation. That could be a university. That could be an economic expert, a policy figure, or someone you will develop that you have a rapport with. I got there very quickly with a lot of economists in our universities over—whether it be Lehigh University, DeSales University, et cetera. And, you know, those are the people where when I get handed a story I can say to them, all right, well, help me understand this. Help me boil this down. I’m not an economist by trade, right? I was—you know, learned how to do TV journalism.

So those are the people that I—

ROBBINS: Much to your parents’ disappointment, I’m sure. But yes.

BACKOVER: Yes. Thank—yes. When I told them I wasn’t going to be a lawyer they were very happy.

So, to that point, when I find those people, and I think you need to have a very wide variety of people because these policy decisions affect people in different ways, right? So if I’m covering the CHIPS bill that’s going to a manufacturer. That’s going to our Economic Development Corporation, perhaps an economist.

If I’m talking about inflation that’s a totally different animal. That’s a totally different set of sources. So I think you get better over time at deciding on the fly who is best for those scenarios.

But you really do—and I know that this isn’t a really concise answer—but there’s never going to be a one-stop shop for explaining what’s going on because these economic issues touch every aspect of our lives, right?

So I can’t just go to one person. And I also make sure that those people have a wide variety of affiliations, of leanings, of different viewpoints, to try to really well round out that—whatever argument it is I end up making.

ROBBINS: And do you go to—I mean, you mentioned local sources—I mean, reasonably local. So do you go to them because they’re more likely to email you back or call you back? But do you also feel that if you go to a local economist or local university they more—have more credibility with your viewers?

BACKOVER: Yeah. Well, so we just kind of as a house rule try to keep things as locally as possible and we do have really great resources. We will go out nationally if it’s a subject matter expert.

You know, I remember doing a story about someone who surveys warehouse space. They don’t happen to live in the Lehigh Valley. So we interview them. I find, though, that I think our viewers want to hear something that they’re not going to hear when they turn on network news and I think more so now than ever, you know, they—if they see what they see on network they’ll change the channel like they do. They’re, obviously, coming to us for a reason, right? They want to hear from people in their backyard. They want to hear from people within their community.

That doesn’t mean that—I mean, we talk to national people all the time. But if I have to choose for a story I would much rather—like, for example, Lehigh University has a great program around the supply chain. I would much rather go to them and talk to their director of supply chain management than somebody from a national port, whatever, organization. I think that has more credibility to our viewers.

ROBBINS: Interesting.

So I want to throw it open to the group. I mean, you guys have raised a million questions that I—you know, that I could ask and I will jump in. But I—but we have lots of reporters here. So why don’t you guys—I will turn this back to our mavens who can explain to you how to do it but you guys know how to ask questions. Raise your hands or—and jump in, please—we have quite a few people here—and please ask questions.

OPERATOR: (Gives queuing instructions.)

ROBBINS: So we have a question from Olivia Evans.

Olivia, would you like to ask the question and can you tell us with whom—I don’t have the list right in front of me. Can you tell us with whom you work?

Q: Hi. I don’t know if you can hear me very well.

ROBBINS: We can.

Q: I’m in a coffee shop. But I’m with the Courier Journal and my question is how is Consumer Price Index related to inflation?

I know the CPI report came out earlier today and I’m just—I’m working on a story about it. But I’m struggling to understand how it’s directly related to that 8.3 percent inflation.

ROBBINS: Great. Zoe, you want to take that first and then—

LIU: Yeah. Sure. Could—I don’t think I hear Olivia’s question very well.

ROBBINS: How is the Consumer Price Index related to inflation? Are they different things?

LIU: Oh, yeah. Sure. That’s a great question. Thank you very much, Olivia.

I love that question because, you know, well, I have so much to complain about CPI. But, you know, long story short, I think, you know, normal—Consumer Price Index is a basket of stuff, and my main complaint about it is that it may not necessarily reflect the same basket for everybody. And therefore, as the measurement of inflation it measures, you know, macro level or headline but it does not necessarily translate directly into how people actually feel about inflation. Therefore, when we say CPI price—CPI index goes up, OK, so we know, OK, the general idea is the economy is heading towards inflation. But it’s not necessarily the same for every single household and it’s not necessarily the same for every single commodity or sector.

So I will just give you an example here. We talk about the U.S. economy and right now, because of Federal Reserve tightening and all that, we are also talking about a strong U.S. dollar.

Now, a strong U.S. dollar is bad news, in particular, for countries that are importing a lot of oil and gas because oil and gas are priced in U.S.—in U.S. dollars and, therefore those—you know, on the one hand a price increase combined with a stronger dollar this, basically, means that this is, literally, like a double inflationary pressure for these oil- and gas-importing countries.

But, you know, from a U.S. perspective, yes, we do experience gas prices increasing, as Carla mentioned, but it’s stabilized in the past few weeks. So I would say long story short, I think, you know, yes, there—we do see a direct relationship, that the impact for different people will be different.

ROBBINS: But I suppose the question that I have as well is that when people talk about inflation and the government talks about inflation are they talking about CPI?

LIU: So that’s another great question.

So the Federal Reserve and the—when the Federal Reserve—the Federal Reserve 2 percent inflationary target is not necessarily CPI. But the CPI is what—you know, when people in major news—in major news headlines that we—what we are looking at. And what the Federal Reserve looking at, inflationary pressure, there are a variety of factors that might be taken into play and the manufacturing managers index is one of—one of that. And then there is also pressure on housing and then major commodity prices and all that.

ROBBINS: So the Fed uses a different basket is what, basically, you’re saying, in effect?

LIU: Yes. So with the Federal Reserve target of 2 percent, it’s a different measurement. But for a major news outlet, you know, CPI is normally the household leading number that we are familiar with.

ROBBINS: So, Justin, are you going to do a story tonight on the CPI numbers and are you going to refer to it as inflation or CPI?

BACKOVER: So we would refer to it as inflation, although, you know, there are a lot of baskets that you could pull from to—when you’re really calculating core inflation. The CPI is the most basic rudimentary thing that people understand so that’s what we’re going to go—that’s what we would go with, I’m sure—inflation.

I would say, though, that, you know, tonight I might be relegated to an anchor read and not a package, depending on the day, because what I’ve found over the last year is it’s very dangerous from, I think, a reporting perspective to get caught up in the month-to-month change in the CPI, right?

You can look at the AP’s article that they put out this morning and it points out as the headline that it’s down from a few months ago. That’s true. It’s also still up 8.3 percent from a year before.

So depending on how you write the story, to Zoe’s point about what data and what numbers you’re pulling out, you can paint a very different picture. So I think that it’s important when you’re talking about using the CPI from a reporting perspective really focusing on the parts of the report that impact people—food, energy, things like that.

That is usually your safest bet, I think, to writing a story that is fair and accurately represents what, I think, people on the ground are experiencing.

ROBBINS: So in terms of—certainly, Wall Street’s flipping out. But so it really is—it’s lower than it was but higher than people expected, given what happened in the previous month.


ROBBINS: And do you explain that in the story?

BACKOVER: Yeah. So I think that as you just put it is a very great way to put that. You know, OK, it’s—how would you—I can see it almost being like, all right, it’s reducing, right? We’re down from a few months but we’re still up 8½ percent almost from a year before. I think that would be the line that you would put in there because I think that you do want to at least reflect the reality.

If I go on television and say, oh, well, you know, inflation is getting better, it’s down a half a percentage point from three months ago, I don’t think people would really understand what I was saying. They don’t feel that when they go to the store.

ROBBINS: So, thank you for that.

Zoe—and, guys, more questions, please. You’re reporters, for God’s sake. Ask questions. If not, I’m going to start calling on you. That’s going to be the academic side of me.

So, Zoe, can you talk about the—oh, we have a question—yay—from Mike Allen.

Mike, can you identify yourself and ask your question?

Q: Hi. I’m Mike Allen with the Roanoke Times in Virginia and I just have—my understanding of economics is probably at a kindergarten level.

So I’m curious to hear about the issue that Carla brought up, actually, originally with just how people are experiencing inflation.

Why is the price of gas improving while the price of food is skyrocketing? You know, are you able to—can you discuss the factors that are playing into this?

BACKOVER: Well, if I may.

I mean, you definitely see lags in terms of energy prices compared to the rest of inflation. So I think that’s something to keep in mind. Like, I hesitate when gas prices change dramatically to immediately start reporting on them because it’s going to take a minute before you see that effect on the consumer level, right?

So, for example, food prices are still elevated because all of the harvesting that was done at the end of the season was done with diesel that was still $6 a gallon, was done with labor that still cost a considerable amount of money. So the problem is, is that you’re not going to see—there’s a disconnect for people that’s hard to explain to them. Yes, gas prices are going down but your everyday essentials are still high.

And some of that could also be price gouging, which we’ve had a lot of conversations about recently in the media. But that’s not a very clean answer, right? So it’s hard for someone like me to communicate that to people in a minute thirty. But that—Zoe, feel free to jump in. You’re the economic expert. But that is, at least, my understanding of it.

LIU: No. I think, Justin, you’re absolutely right there, and if I can just add a footnote to what Justin just described, I will say, you know, when I try to analyze market and price dynamics I go back to Econ 101, which is supply and demand.

So I always ask myself why—price changes, fundamentally, start with supply changes and demand changes. So, like, take that—use our—you use the price hike immediately following Russia’s invasion of Ukraine. So, for example, the supply—we experienced the price go up. Obviously, there are some market—the futures market movement because of expectations.

But the fundamental—let’s take a look at the fundamental, right—supply and demand. On the one hand, the supply—supply on the one hand probably reduced because of Russia’s weaponization of energy supplies and then on the other hand demand may not necessarily shrink by supply (threat ?) because in order to maintain the equilibrium supply—when you have the supply go down, in order to maintain a price equilibrium you would have to have demand go down. But demand in the immediate aftermath of Russia’s invasion of Ukraine did not go down.

Remember what happened. You know, we started to experience, you know, economic reopening. People started to travel and, you know, demand for cars—car travels, you know, private cars and passenger cars and people starting to travel internationally. Economic productivity started to go up.

So what did we experience from a very fundamental perspective, you know, regardless of geopolitics and everything like that, supply/demand? On the one hand, you have supply come down and then on the other hand you also have demand go up.

Now, economic—why we experienced price goes—started to go down? Again, eliminating all these, you know, geopolitical factors, just go back to the fundamentals. On the one hand, European Union have been doing a great job in, on the one hand, cutting down their demand on Russian oil and gas. And then on the other hand, United States have been exporting a lot of, especially, natural gas—LNG—to the European Union.

Therefore—and on the other hand, you know, from a pure supply/demand perspective, yes, you know, you have the supply goes—supply, you know, goes up from the perspective of the United States as an alternative supply and then, on the other hand, demand started to go down because of China’s slowdown—slow economic growth as well as China’s economic—China’s lockdown and all that.

So I just—I feel like, you know, just give you an example, like, how I would think about price dynamics, I go back to the supply/demand and Econ 101. And then on top of that, I started to think about other factors that might have influenced supply and demand such as geopolitics, supply chains, and seasonal factors, things like that—winter, summer, hurricanes.

ROBBINS: So would you expect gas prices to then go up as it gets colder? I think Europe is doing a pretty good job there. But let’s face it, it’s going to get pretty cold in Germany soon, and given Germany’s dependence on the Russians—

LIU: Absolutely. Absolutely. That’s a great question.

Again, you know, winter—when winter comes. You know, I think Russia has supplied more than 60 percent of Europeans’ energy demand for a substantial period of the time and then—and when winter comes that, basically, means, you know, because of the heating, because of economic activity, demand is going to go up.

However, supply probably is going to go down because Russia threatened to—already threatened to shut down the Nord Stream supply, right? So now, in order to meet the gap of Russia’s supply, we need alternative sources, either from Middle East or from the United States.

So, holding everything else constant, if we do not necessarily see a change—a dramatic change or an increase your alternative supply, probably there is a significant chance of energy price go up, increasing the fiscal burden for European economies, especially in wintertime.

ROBBINS: Good times to come.

Ethan Steinberg from—managing editor for the Tufts Daily.

Ethan, can you ask your question?

Q: I think you may—I asked a question. I’m Ethan Baron from the Mercury News. Not sure I’m the one that you’re—

ROBBINS: You’re the wrong—we have the wrong name up there. But hello.

Q: Hey.

ROBBINS: Are you from the Merc?

Q: Yes.

ROBBINS: You are very sad about Jerry Ceppos passing away.

Q: You know, I haven’t been there that long.

ROBBINS: Oh, yes. He’s your former editor and your former publisher.

Q: Oh, geez. OK.

ROBBINS: So he was, truly, a wonderful human being. You should find out about him.

Q: I will do that.

ROBBINS: (Inaudible)—you.

Q: Yeah. Thanks.

So, anyway, just to keep Carla happy and not get us all, you know, in hot water here I’ll ask two questions. And so my first one is, like, so we have these small changes in the Consumer Price Index. The underlying issue for, you know, our news consumers is that prices are higher now than they were two years ago by a lot. How do we not tell the same story every time just with different people talking?

And then my other question is, you know, the effects of inflation hit the lower income people disproportionately harder and particularly in a market where, you know, we have fairly wealthy readers, at least for the Merc, relative to other markets it can be hard to get people to care about, you know, hardships that are affected by—that are affecting people that aren’t affecting them in the same way.

And so how do you get kind of wealthier news consumers to care about the harsher impacts on people who are not like them?

So those are my two questions. I have another one but I don’t want to hog up all the time. I’ll ask it later if there’s time. But thanks.

ROBBINS: Right. Thank you, Ethan.

So, Justin?

BACKOVER: Well, I would say that you asked a question that I ask myself almost every day, how do you get people to care? I would say short of—you know, the region I report on, right, we have extreme poverty next to extreme wealth and I think people can tangibly see it.

So when you go out and you tell the stories of those who are being disproportionately affected—I know that that’s not maybe the best answer but it is, in my opinion, the most effective way to try to get people to care about it—the more you put it in front of them the more they take to it.

I don’t—I think that empathy is, really, just something that in a lot of people almost needs to be repetitive, like training someone, in a way, which sounds kind of nihilistic. But you really do—I find, you know, if I get hung up on am I going to impact everybody the way that I intend to then I probably wouldn’t do anything, right?

So I just wake up every day and I say to myself, all right, there’s a problem. There’s a woman in Allentown who has five kids. Her rental assistance from COVID is expired. She can’t put food on the table. I’ll tell her story, and then I’ll tell someone else’s story who’s experiencing something similar and, hopefully, enough people listen and care after a while.

But I don’t have a good answer. There’s not one thing I’ve done that I have found has made somebody care more than something else.

ROBBINS: Zoe, I suppose I have a question, which is how do you get people to understand the relationship between the global economy and the domestic economy in a way that they don’t turn off and—which is—since it’s all related to each other? I mean, it’s easier, given Russia right now because everybody knows how bad Russia is. But how do you do that?

LIU: Right. Thank you, Carla, for another very interesting question.

You know, it’s a(n) issue that I struggle with every day. It goes back to the earlier question by Ethan and goes back to Justin’s answer.

You know, first of all, I really count out a pair of sympathetic ears—you know, people who actually care about this issue and genuinely curious about it because, you know, sometimes—and, you know, as a researcher myself sometimes I do have this issue and I wish—and I have been trying to deal with it for a long time, which is do not have—do not impose too much cost on my audience.

The idea is, you know, do not assume that everybody would be equally interested in what a sovereign wealth fund is and how sovereign funds perform during economic recessions and all that.

But the way that for me to try to engage with broader audience and that’s, you know, a lot of things here at the Council. You know, everybody here tries to do is to try to explain to wider audience why this matters, and why this matters really depends upon who you are talking to.

So if I talk—I explain economic matters and how China—the Chinese economy slowdown may have an impact on the U.S., if my audience is policymakers I probably have to focus on the policy implications—you know, what the Chinese have been doing and all that.

But if I’m talking about, you know, at the day-to-day level—let’s say—for example, if I go to Utah and attend a conference in Utah I probably would want to explain to the local audience and say, hey, how much Chinese tourism bring(s)—how much revenue Chinese tourism bring(s) to Utah in normal times and, hey, during pandemic that, basically, means $1 million every year tourists’ money is gone. And if you explain to people from their local perspective—you know, just match the number with the local constituencies—probably they would be very much interested.

And then on the other hand, you know, obviously, the impact of the global economy on different states here in the United States will also be different in the sense that not every state here in the United States are equally export-dependent. And when people talk about the impact of strong dollar, that is also going to have a different impact on different households because not everybody is going to go to Europe and spend money on a Louis Vuitton bag. For those who go, obviously, that’s good news. They are able to spend more and—but then for people who are—for households, you know, especially for those who live on fixed income here in the States, high inflation is probably going to make those people suffer the most.

So I guess, you know, I really do have a lot of sympathy to our—to journalists and the way that journalists have to do the reporting because it really depends upon who you are talking to and in order to—it goes back to Justin’s point, really, it’s—I would start with, you know, understanding your local constituencies and getting people familiar with—interested in some of the things that we are familiar with.

BACKOVER: Yeah. And I would also just add really quickly, based off of what Zoe was saying, you know, you want to try to find as many connections as you can to whatever it might be, right?

So if you’re—most people didn’t know that most of our wheat came from the Ukraine until the last year or so. I have a responsibility to explain that to our viewers and, hopefully, that gives them a better understanding of why we’re all kind of touching hands and holding hands in this economy.

Just as talking about extreme poverty, I would want to find a way to relate to, let’s say, a wealthy business owner that these are your employers. This is your community. I think this idea—I mean, these are your employees, rather. This is your community.

So I think that when you try to make sure that you’re walking into it with a sense of just how can I explain all the different ways that all these different people and all these different industries touch each other and where they touch each other, that helps humanize it a little bit more than just laying out facts.

ROBBINS: That’s great. Thank you.

So we had Britney McGee (sp) who had her hand up.

Britney, are you still with us or did you have to go and write? Britney may have fallen out. So I think maybe if Britney comes back we will have Britney ask her question.

While we wait—and, Ethan, we’ll go back to you in a minute—while we wait, just if people want to—you know, everybody’s running a deadline all the time and, particularly, now you guys have deadlines all the time. I lived in a world in which I did write during the internet. OK. I don’t want to—(laughs)—I did have a computer. It wasn’t all typewriters.

But given that, where do you guys go for, you know, quick hits on data? If you want to just get—you know, I mean, is it—are there good government websites? Are there good, you know, think tank websites? You know, just give us, like, good ways to get information really quickly.

BACKOVER: I mean, I would say that I don’t find it, personally, to be easy but it can be done, right?

So I’m always looking at the Department of Labor. I’m always checking—because I’m covering Pennsylvania I’m always looking at the state data. I’m always making sure that that’s updated. At least in the state of Pennsylvania, they have a pretty robust set of data that they put out.

I would say that also my best friend is, like, a Google news search where I’m putting in, you know, a specific keyword and I’m finding as much academic work as much that’s been published. I mean, often, right, from the local broadcasting perspective, it’s not like I’m getting a report handed to me before it’s published by whatever organization.

So I do find that, you know, you really—I kind of have the internet work for me, in a way, now. I have it alerting me to when things come up and I am immediately digging into it, and then just trying to stay as up to date as I can on my own with just the federal and state policy websites that kind of would help inform, maybe, some of those decisions.

ROBBINS: And on the state policy website do you look at the state Department of Labor or the state—you know, which parts of those—?

BACKOVER: Yeah. Well, the Department of Labor is definitely helpful. There’s also—you know, in terms of, like, jobs, there’s—you know, we have WARN notices. We have studies that are done by DNL. We have—I’m kind of blanking on all the acronyms for all the organizations.

But generally, you know, I start with both departments of labor and work my way out from there.

ROBBINS: And, Zoe, to get—you know, obviously, the Council on Foreign Relations is a great source and, you know, we are a think tank and we have—you know, CFR and Foreign Affairs are great sources as well.

But where else can you recommend to people if they want to find something quickly and also find a diverse set of voices?

LIU: Yeah. Thank you, Carla.

You know, yeah, as you correctly pointed out, the Council is always a good source and, you know, for everybody here, feel free to reach out to any one of us at the Council anytime. We are all happy to answer any of your questions as much as we can.

And in addition to our website and our think tank fellows, I would—in terms of economic indicators I would also go to U.S. Bureau of Labor Statistics because, you know, the unemployment number and the inflation number and all that is also very—they are very authoritative.

And then in terms of just macroeconomic data in general, I would also go to the St. Louis Fed. They have—the St. Louis Federal Reserve—they have a lot of, you know, macroeconomic data dating all the way back to probably around—before World War I. And they have—from my understanding, you know, they provide the longest documented varieties of U.S. data on macroeconomics, oil market, and all that.

And then if you want really specialized data from a foreign government, for example, you know, the ECB is a good one. Bank of England is a good one. And people tend to not necessarily trust the Chinese data, but I would just say I would want to give the Chinese, especially the PBOC, some credit because—especially if you can use—

ROBBINS: Bank of China, yeah.

LIU: Yes. The People’s Bank of China, the central bank of China. They publish a lot of data actually very on time, but the English version might have some lags there. But you know, a trick that I—I bypass that. Not everybody reads Chinese, right, and so the trick that I tell people to bypass that is to, you know, you install a Google Translator, the Google extension, and then use the translator translating the website. I tried that and it’s actually very good. So if you’re wanting to—if you’re curious about what is going on in China, I would say that is the—you know, try that out. Probably you will be surprised.


So we want to go back to Ethan Baron one more time since he had one more question, and I’m not sure we fully answered your other questions because I jumped in.

So, Ethan, you have two minutes. Go fast.

Q: OK. Thanks.

Well, so the question I had that wasn’t answered probably is, like, you know, the big issue is, like, prices are a lot higher than they were two years ago. And so when you’re dealing with a story—you’re going to do whatever story on a particular, you know, change in the Consumer Price Index or whatever—how do you not tell the same story every time, you know, just switching the people that are talking about it?

ROBBINS: Good question.

BACKOVER: Yeah, that’s a really good question and it’s—I would say that, at least what I tried to do and I’m sure often it might feel like it’s the same story, the point that I try to do is parse out different aspects, right?

So maybe one CPI report I’m focusing on energy. Maybe one CPI report I’m focusing on food. Maybe one CPI report I’m focusing on whatever it might be.

What I try to do is—because I, personally, working in television and limited in how much I can get to, I try to break it up and not try to do how do we digest all of this in one, you know, compact story.

So I think that the way, at least, I try to vary my reporting is to just parse out different aspects of it every time because we know the numbers are going to come out every month, and take it from there. So I’ll leave it there for time purposes.

ROBBINS: So, Zoe, we have only a few—half a minute left. What’s the most important thing that reporters should know for tonight, given the news that just came out on the CPI?

LIU: I would say recognize that CPI is limited and always look for things that are relatively closer to people’s life. For example, CPI removed of oil and gas or energy and food, or just focusing on food index or just focusing on housing market. That might get people interested. And explaining the trend of inflation better.

ROBBINS: Great. Thank you so much, both of you. It’s been fabulous. And I’m going to turn it back to Irina. And thank you, everybody, for your questions and, particularly, thank you to Ethan.

Q: Thank you.

FASKIANOS: Thank you all. I share Carla’s thanks and I just wanted to send you off—to let you know that we will send a link to this webinar recording and transcript after the fact and until then you can follow Zoe on Twitter at @ZongyuanZoeLiu, Justin at @Backover2u, and Carla at @robbinscarla.

So, as always, we encourage you to visit CFR.org, ForeignAffairs.com, and ThinkGlobalHealth.org for the latest developments and analysis on international trends and how they are affecting the United States. And, of course, please do share your suggestions on how we can be a resource for you and for speaker and topics for future webinars. You can email us to—send the email to [email protected].

So, again, thank you all for being with us today and to all the great questions. We appreciate it.

ROBBINS: Thank you, guys.

LIU: Thank you.

FASKIANOS: Take care.


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