Trade Balance improves - Nothing good in the numbers

We should be excited with an unexpected improvement in the trade balance but a close inspection will provide only limited bright spots. Yes, it did improve and oil imports continue to decline, but the rest of the report show that global growth is declining. Call it the incredible shrinking global economy. Exports have declined jut over 15% and import showed significant slowing at down 20%. Hong Kong, Singapore and Malaysia all showed import declines of over 20% YOY. Exports to places like Taiwan have fallen by over 30% YOY.

Imports are a function of income so as the US retrenches, the import will decline. Exports will be related to income in the foreign country, so improvement in trade may be related to faster declines in US growth relative to the rest of the world.