Made in China: 2.7%

With a wicked trade deficit, you'd expect just about everything to be 'made in China,' but according to the just released San Francisco Federal Reserve report The U.S. Content of Made in China, only 2.7% of all US personal consumption spending was for products made in China while a whopping 88.5% of spending was for American-made items.

Say, what? Everything seems made in China, from Apple iPads to dish towels. The Fed's got it backwards, right?

Not exactly. The kicker is the category called 'services' -- mechanics, hair stylists, accountants, truckers, and so on. They are all US businesses, so when the Fed tallies personal consumption expenditures, these come under 'US' perview...hence the statistical disparity. Of course, statistics exist to be used and abused.

When you buy a $20 toy from China, not all $20 goes overseas -- parts go to the retailer, distributor, trucking company, etc., etc., etc. Services, which make up about two-thirds of spending, are mainly produced locally. On average, of every dollar spent on an item labeled 'Made in China,' 55 cents go for services 'produced' in the United States.

Then there are the other two kickers: gasoline and groceries. Food remains mostly US grown, and although the US imports half its oil from other countries, China is not one of them. About 90% of gasoline used in the US is refined in the US.

Thus, the US produced the vast majority of goods and services sold in the US. In 2010, imports were about 16% of US GDP. Imports from China amounted to 2.5% of GDP. Chinese imported goods consisted mainly of furniture and household equipment; other durables; and clothing and shoes. In the clothing and shoes category, 35.6% of US consumer purchases in 2010 were for items with the “Made in China” label. Over the last 10 years, the overall import content of US consumer goods remained relatively constant while the Chinese share doubled, indicating that Chinese gains have come, in large part, at the expense of other exporting nations.

Cold statistical comfort for shoppers facing shelves full of goods labeled 'Made in China' when they want to buy 'Made in the USA.' As Abraham Lincoln once noted, when you buy goods made overseas, you get the goods and they get the money. When you buy goods made in the USA, we get the goods and the money.