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Wholesale Prices In October Saw Biggest Drop Since 2020; More Affordable Prices Expected For Thanksgiving This Year; Biden, Chinese President Xi To Hold High-Stakes Meeting; Wray: Threats At "Whole Other Level" Since Israel-Hamas War Began. Aired 1:30-2p ET
Aired November 15, 2023 - 13:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAMELA BROWN, CNN HOST: OK, some good economic news coming. Today, we're getting new signs that inflation is cooling, but so is retail spending. Americans cut back last month for the first time since March.
CNN business and politics correspondent, Vanessa Yurkevich, is here to break down the numbers.
So, help us put this into context. What does this mean for the economy, Vanessa?
VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: It's good news for the economy and it's good news for everyday Americans.
Retail sales falling by 21 percent in October. That's a turnaround from the aggressive spending we have seen from consumers over the summer. They were really balking at all of these higher prices.
But what we're seeing now is consumers confronting higher borrowing costs. They're paying student loan payments again. And they're really tightening their budgets.
And that dip in October really comes because people are not spending on big-ticket items anymore. We saw a decline in auto sales and in furniture.
Now to the Producer Price Index. That also came out this morning. That's what businesses are paying. Again, we saw very high prices for producers, businesses over the summer, but we saw a better-than- expected drop in October, down 0.5 percent.
That is because a lot of businesses saw cooling of energy prices. So, trucks that move the goods and services they buy.
Also encouraging news, Pam, is businesses ultimately pass those prices down to consumers. So if producers are paying less, consumers can potentially pay a little bit less. But remember, we're still not quite there on inflation. This is good
news but we need to get prices even lower.
BROWN: Big picture, what does this mean for holiday prices and what can we expect for Thanksgiving?
YURKEVICH: A continuing trend. The National Retail Federation is expecting that folks will be spending 3 percent to 4 percent more this year.
However, that is a decline from what they were spending last year, up 5.4 percent in spending. So basically seeing folks continuing to pull back for holiday spending.
Thanksgiving dinner, good news, less expensive this year, about $61 for a family of 10, looking at 12 classic items in your Thanksgiving meal. That's coming down from about $64 in 2022, last year, when we saw a record.
You can thank cooling inflation for that. Food prices have come down a little bit. Still high but have come down a little bit.
Also, you can thank turkeys for that. This year, the avian flu was a bit more under control, and farmers added about 2 percent to 3 percent more turkeys to their farm. So turkeys really helping to bring down our Thanksgiving meal costs.
This year, I think everyone will agree that's good news.
BROWN: That's good news. I remember how expensive it was last year. So that is certainly welcome news.
Vanessa, thank you for bringing us that good news. Much appreciated.
Well, any moment, the high-stakes summit between President Biden and Chinese President Xi gets underway. Live from San Francisco, up next.
BROWN: After months of tension, the leaders of two global powers will be face-to-face for a critical meeting. Any moment now, President Biden and Chinese President Xi Jinping will shake hands in a very lovely place, we should add.
BRIANNA KEILAR, CNN HOST: It is gorgeous. They are rolling out the red carpet. And these two leaders, they haven't met in a year, so this is a big deal.
KEILAR: Since then, we've seen a Chinese spy balloon shot down after cross the U.S., close calls between U.S. and Chinese military planes, of course, a new war in the Middle East, just some of the major issues that may be discussed. So let's bring in CNN senior White House correspondent, M.J. Lee, who is there just south of San Francisco, in Woodside, California, where this is all taking place.
M.J., this is Xi's first visit to the U.S. since 2017. Just set the scene for us.
M.J. LEE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, you know, U.S. media was just transported from San Francisco to Woodside, California, just south of the city.
And this is a location that was undisclosed, even to members of the White House press corps until even just a few minutes ago, for a variety of security reasons.
You're right, months and months of planning have gone into what we'll see transpire today. In just a few moments, we'll see the officials meet and greet between the two leaders.
There will then be the bilateral meeting, really, a series of meeting between the American and Chinese delegations. And then that rare solo press conference from President Biden.
Now, U.S. officials, we are told, encountered a remarkable amount of anxiety and attention to exactly how President Xi would be treated during his brief visit to the United States.
Every piece of choreography, we are told, was something that the Chinese officials were very attuned to, from where the Chinese leader would sit, what he would see out the window at any given moment.
While this is not at all unusual for any foreign trip for a Chinese leader to be this closely scrutinized, we were told that U.S. officials felt like this level of anxiety going into the planning was remarkable and pretty unprecedented.
As for what the Biden administration is hoping to get out of this, they have been managing expectations. They say, in the big picture, the thing they would like to accomplish with this meeting is bringing the U.S./China relations back to normal.
Establishing those diplomatic channels and communications and relationship, again, because, in the last year or so, that relationship has so much deteriorated.
In terms of some of the tangible outcomes they are hoping for, there are a few things, including the re-establishment of military-to- military communications between the two countries.
There may be a major announcement coming between the two countries on efforts to crack down on chemical substances used to make Fentanyl.
But all in all, what they would like to come out of this meeting is to have those communications reestablished between the two countries so that they can manage their relationship and make sure there's no misunderstandings and misperceptions, conceptions between the two countries going forward.
KEILAR: All right, M.J., thank you so much. Obviously, we're keeping a very close eye on this meeting.
And now we have Evan Osnos, who is a CNN contributor and staff writer at "The New Yorker." He's the author of "Joe Biden, The Life, the Run and What Matters Now."
And Matthew Kroenig, the vice president and senior director of the Atlantic Council's Scowcroft Center for Strategy and Security. He's a former CIA and Pentagon official. He's the author of "The Return of Great Power Rivalry, Democracy Versus Plutocracy from the Ancient World to the U.S. and China."
All right. Appropriate heavy hitters here to discuss this big meeting.
Look, these things, they're not coin flips, right? These are pretty much orchestrated, choreographed down to a tee.
So what will make this a success, Matthew?
MATTHEW KROENIG, VP & SR. DIRECTOR, ATLANTIC COUNCIL'S SCOWCROFT CENTER FOR STRATEGY & SECURITY: Well, I think just the fact they're talking is a success. This is the first time they've talked in some time.
I think it's also important to put it in a bigger context. The United States and China are in a situation that some have referred to as a new Cold War.
The reason for the tense relations is not because the two sides haven't met, but because China is threatening its neighbors, systematically stealing intelligent property from the United States, and committing what many are calling a genocide in Xinjiang.
So I think it's good that they're talking but I think we also have to be realistic. This one meeting will not suddenly turn the relationship around.
BROWN: You'll remember, last year, when they met, it was basically to establish a floor.
And I'm curious, given all that has happened this past year, shooting down a Chinese balloon and so forth, what are your expectations, Evan, for this meeting and what could come out of it?
EVAN OSNOS, CNN CONTRIBUTOR: It's interesting, that language about establishing a floor or establishing guardrails, all of this physical imagery. You're not hearing as much of that from the administration these days.
Because, frankly, they've lowered the bar of expectations. They're saying, look -- yesterday, President Biden said what we want to get out of this is that they will pick up the phone when we call. That's not abstract. They actually really have had trouble
establishing permanent and reliable channels of communication. Partly because senior Chinese officials have disappeared in the last year, the foreign minister, the defense minister.
This is about saying, look, we've had a lot of trouble in the last 12 months. Let's set a new clock running and start talking about the issues for the next year.
KEILAR: Obviously, that is a recipe for disaster, when you can't get ahold of someone you're having these close military calls with.
China is so divisive. Domestically, here in the U.S., when you're talking to voters, they have strong opinions about it.
Can you talk, Evan, a little about this Fentanyl piece of this? I think that resonates a lot with voters here in the U.S.
OSNOS: Yes. I think this is an opportunity at a really tense time, as Matt described it, all of these larger issues.
This is an issue that Americans can understand, get their minds around. There are precursor chemicals that are produced in China. It's, in fact, illegal to be used there.
But they ship them to Mexico and then they can be processed and turned back into drugs and brought into the United States.
If they can do something on that, that sets a baseline expectation. And this is the key.
It establishes the idea that it's possible for these two countries, at the same time that they're competing, fighting fiercely on a number of issues, that they can still come together on things that matter.
Evan, you had mentioned, hey, we just want them to pick up the phone when we call, right? These are two superpowers.
I wonder, as you look back, you know, since the military communication was cut off by China after the visit to Taiwan by Nancy Pelosi, what the consequences of that are? And do you expect that the military communications will be restored after this meeting, Matthew?
KROENIG: Well, it's the Biden administration's hope that the military channels will be reestablished.
It's interesting I think that the two sides see this differently. The United States would like to have the military channels. I think many of us, it seems obvious that we want to be able operate in the region without accidents.
I think China sees it differently. They don't want the U.S. operating militarily in the Indo-Pacific safely. So I think China benefits by not having this communication channel. They would like the U.S. military to just go home. Another point that I would make, in terms of these possible agreements
over Fentanyl, we have to remember that Trump and Xi made an agreement over Fentanyl several years ago. China didn't really follow through.
Xi promised Obama in the Rose Garden that they wouldn't militarize islands in the South China Sea, and then they went ahead and just did that.
So I feel like I'm being a pessimist here but, even if they make some agreements, I think there are questions about will China really follow through.
KEILAR: Track record, meaning --
BROWN: Yes --
BROWN: Very important context.
KEILAR: Matthew, Evan, thank you so much to both of you for being here.
OSNOS: Thank you.
KEILAR: We appreciate it.
And coming up, new warnings today about individuals who may try to exploit the Israel-Hamas war to carry out an attack on U.S. soil. What the FBI director just told members of Congress. Stay with us.
BROWN: As the war intensifies in the Middle East, FBI Director Christopher Wray warns it could spill over onto U.S. soil.
(BEGIN VIDEO CLIP)
CHRISTOPHER WRAY, FBI DIRECTOR: Since October 7th, we've seen a rogue's gallery of foreign terrorist organizations call for attacks against Americans and our allies.
Hezbollah expressed its support and praise for Hamas and threatened to attack U.S. interests in the Middle East.
Given those calls for action, our most immediate concern is that individuals or small groups will draw twisted inspiration from the events in the Middle East to carry out attacks here at home.
(END VIDEO CLIP)
BROWN: CNN's Evan Perez is here with more from today's Capitol Hill hearing, a worldwide threat to the homeland.
Evan, you've done reporting on how the FBI, in particular, is stepping up resources, scrutinizing potential Hamas operatives in the U.S.
Today, Director Wray had a stark warning about the threats and the tips coming in, in the wake of the Israel-Hamas war.
EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Right, I mean, part of it is this idea that there is concern that there's going to be this spillover.
One thing he mentioned is that there are people associated with Hamas who are now under investigation as part of this reassessment that you and I first reported on just a few weeks ago.
We knew that the FBI was going to take a look again at some people they knew were supportive of Hamas in the United States, a lot of them associated with financing of the group, and to see whether they need to, you know, be concerned about potential attacks here.
It's something that is very much on their mind. You heard it from the director and from the Homeland Security secretary.
Especially because there's been so many threats against -- anti- Semitic threats against Jewish-Americans and against Arab-Americans and Muslim-Americans as well.
BROWN: And there's also the overarching concern of lone wolves, right, other terrorist groups --
BROWN: -- that could be inspired by Hamas and Hezbollah and threaten an attack in the U.S. related to this war.
PEREZ: Right. We saw -- you and I have spent so much time covering some of these very same similar types of threats from people who were inspired by ISIS just a few years ago. So that's the marker that they're looking at.
Again, they're trying to see whether people who might be driven by the images they're seeing coming out of Gaza, people who are very passionate about what's happening over there, could decide to carry out an attack here.
That's always the concern. And it's very heightened because of just the number -- the skyrocketing number of threats they're seeing.
BROWN: It's so hard for law enforcement for protecting and trying to decipher what is an actual threat versus what is just online rhetoric, right?
PEREZ: And the biggest thing is they have to be right every time.
BROWN: They do, absolutely, because lives are on the line.
Evan Perez, thank you so much.
Be sure to stay with CNN NEWS CENTRAL as we watch for a very critical meeting between President Biden and Xi to get under way.
We'll be right back.