Global Trade and U.S. Exports Are at Record Highs

No sign of recession based on record world trade volume in May and record U.S. exports in June.

According to perma-bear Gary Shilling this week, "We're already in a global recession," and ECRI's Lakshman Achuthan said in July that "the [U.S.] economy is in a recession already."  

But if the U.S. and world economies are in recession, why are merchandise world trade and U.S. merchandise exports at all-time record high levels, see chart above?  The CPB Netherlands Bureau for Economic Policy Analysis is reporting that world trade increased by 2.5% in May to the highest level on record (see blue line in chart).  May's increase in world trade volume was the highest monthly gain since December 2009.  The slight decreases in Europe's exports (-0.1%) and imports (-0.3%) in May were more than offset by strong gains in Asia's exports (5.1%) and imports (7.8%).  Of course, the CPB reports comes out with almost a 2-month lag, so world trade might have declined in June and July. 

Separately, the IMF's latest World Economic Outlook points to downside risks in Europe and the U.S. that could stall the global economic recovery, but the IMF is still predicting world GDP growth of 3.5% this year and 3.9% next year.  Both of those growth rates would be above the 3.2% average annual growth in global GDP since 1980, and far from the negative growth rates in 2008 Q4 of -7% and -6% in 2009 Q1 during the worst of the global slowdown.        

The BEA reported this week that both total exports ($185 billion) and goods exports ($133 billion, see red line above in chart) reached new record highs in June.  June merchandise exports were 10.6% above the previous peak of $120 billion four years ago, and 61% above the cyclical low of $82.5 billion in 2009.  Similarly, world trade is 6.5% above its previous cyclical high in 2008 and 33% above the cyclical low in 2009. 

Bottom Line: Based on the ongoing increases and record highs for world merchandise trade in May and U.S. merchandise exports in June, and the IMF forecasts for above-average growth in 2012 and 2013,  it seems like it would be hard to make a strong case for either a global or U.S. recession.      

Update: The 174,148 loaded export containers shipped in June from America's largest sea port - Los Angeles - set a new all-time record high for the month of June, and was an increase of almost 7% above the same month last year.