US trade balance was more negative than expected which is very surprising given the significant fall in oil prices. Most would expect that the key fall in imports would lead to some improvement. Imports should also fall with the decline in income. The big surprise was the decline in exports which is telling us something about the state of the rest of the world and it is not good.
The major theme in 2007 and early 2008 was the decoupling of the rest of the world from the US. The new economic engine would be emerging markets which were growing independent of the US consumer. That story is gone. The rest of the world is slowing with the US. Now this slowdown is all related to a common cause, the credit crisis, but exports were the one bright spot in the US economy.
The poor global story is confirmed by the slowdown in Chinese exports and the fall in Baltic freight rates. If trade financing is not available there will be less trade in goods. Another fall-out from the credit crisis. These numbers will not get better given the season and still early point in the business slowdown from some countries.
The major theme in 2007 and early 2008 was the decoupling of the rest of the world from the US. The new economic engine would be emerging markets which were growing independent of the US consumer. That story is gone. The rest of the world is slowing with the US. Now this slowdown is all related to a common cause, the credit crisis, but exports were the one bright spot in the US economy.
The poor global story is confirmed by the slowdown in Chinese exports and the fall in Baltic freight rates. If trade financing is not available there will be less trade in goods. Another fall-out from the credit crisis. These numbers will not get better given the season and still early point in the business slowdown from some countries.
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