China reports weaker-than-expected economic data

BNP Paribas U.S. Economist Yelena Shulyatyeva discusses Chinese economic data as the country's stocks near a bear market.

Video transcript

- All right. Let's-- switching gears for a moment. JPMorgan Chase CEO, Jamie Dimon, is in China this week. He said in an interview on Bloomberg that the bank will continue to operate in the country in good times and bad. It seems like the global power could be falling on some hard times-- economic data showing signs of a shaky recovery.

Just for a quick comment on this, and then we're going to turn back to some other issues. Let's bring back in Yelena Shulyatyeva, BNP Paribas US economist. So just quickly. I'm curious. Even though there's a lot of talk about decoupling, we obviously still have a big relationship with China. Do we need to worry in terms of US economic growth that the economy there is slowing? Will we see fewer Chinese tourists in the US, for example?

- It's just one other piece of the puzzle. I think the US economy is slowing regardless. We are having depletion in excess savings, and the US consumer is going to slow down in spending and so on. I think the way the global economy affects us is through the markets to the main degree. This is how it percolates into the US economic story.

We're still quite a big of a domestic economy, and what drives economic growth is consumer spending. But definitely, that could also just deliver that additional nudge and push us further into the recession story.

- And so even as we think about a few of the elements within the employment situation that have larger economic impacts, payrolls is something that you're also tracking as well. Why is that?

- So this is key data. This is key economic data ahead of the June FOMC meeting, and I think it will. All dimensions of this report, whether it's payrolls growth, unemployment rate, average hourly earnings will have a say in what they will do at the June meeting. I think it's a live discussion. It's still a live decision. It's not been decided what they are going to do.

If it's a strong report, I think it will send quite a strong hint that they will have to go. But as of now, I think we will see. Our projection is for some slowing in economic growth, in payrolls growth, a little bit of an uptick in the unemployment rate in the upcoming report.

- We in the media like magic numbers. What is strong? What's the number that they can't ignore? They're going to have to raise?

- I will give you a strong number. So 250 will put the three-month average on an unchanged pace relative to the recent history. So I think anything above that would be considered very strong.

- Anything above 250, a rate hike is more likely. Yelena, thanks.

- Nice. Yelena Shulyatyeva, who is the BNP Paribas US economist. Thank you so much for taking some time.

- Great to see you. Thanks for coming in.

- I really appreciate for inviting me.

- Come back soon.

- Great conversation.