This is a really useful chart from Zerohedge comparing in detail the first GDP report to the latest revision, which overall was pretty good.
A few key areas nicely improved. Personal consumption and fixed investment jumped nicely. And the drag from less government spending wasn’t quite as bad as the first reading.
But look at the trade measures. Imports subtracted less than thought, and exports added less than thought. Both of those things translate into: Less global trade than previously thought.
Technically speaking, a lower trade deficit is good for GDP, as net exports get subtracted from the number. But in terms of the general trend, bigger trade deficits have been associated with faster GDP growth, since bigger trade deficits imply more global trade is happening.
And it’s not just this reading that’s showing signs of slackening global trade.
Today the IATA reported poor air cargo volumes. There’s the Baltic Dry Index collapse. And there’s the Japanese also slipping into trade deficits. Other Asian export data has been poor as well. So overall, global trade momentum is clearly fading a bit. The question is whether it’s the start of something bigger and real, or just some temporary slippage.