From our mailbag, Bob Hall offers a guest post, “The ‘Made in China’ Content of the Federal Reserve—A Rebuttal”:
 
You may have noticed that the Fed's "Economic Letter" included in its calculations American consumer spending on services, which the Fed claims accounted for 66.9% of personal consumption expenditures, or PCE.  (How comforting that 66.9% of our money, or so the Fed claims, goes to services that do not create wealth.  How predictable that the Fed doesn't say this a problem.) 

Because Americans buy Chinese products (which creates Chinese wealth), not Chinese services, this trick was clearly designed to manipulate the headlines and, of course, the public.  If we accept the Fed's catchy claim that "goods and services from China accounted for only 2.7% of U.S. personal consumption expenditures in 2010," we can at least drop the "and services" baloney and revise their figure from 2.7% to 8.2%.

Good grief, according to the Fed's own report, this is more than twice what Americans spent on motor vehicles (3.4%), more than what we spent on food (8%) and almost half of what we spent on housing (16.6%). 

"Made in China" is suddenly more alarming than the Fed wants us to believe.