Global growth is trading up
- The volume of global trade is a record level of real global GDP. Despite the weaker dollar (which reduces the local currency value of non-US exports) the world's major exporters reported rising export values during the past month. These are clear signals of a healthy global economy; someone has to be buying these exports.
- Real US consumer spending growth has stabilized at a level around the post-1990 average. Real German consumer spending is growing considerably above the post-1992 average. In the Euro area the consumer is spending at a real rate that is faster than the average of the past 20 years. Even the Japanese consumer is growing at roughly twice the pace of the past two decades.
- This is the true sharing economy – developed economies are sharing better than normal growth experiences with exporters in emerging markets. Of course, the main economies are at different points in the economic cycle; Europe will moderate after the first rush of post-recession growth, while the US cycle is more established. Sentiment data has (as ever) wildly exaggerated the true story and will correct. But fundamentally, this is a tale of better trade as the world grows.