This week’s chart appeared in the Wall Street Journal via Germany’s Kiel Institute for the World Economy and shows the rapid rebound in global trade after the pandemic-induced economic stall. As the Journal points out, World trade volume has regained half of the volume lost since the COVID-19 outbreak in three months whereas it took nearly 12 months for world trade to regain a similar drop in volume in the aftermath of the global financial crisis. While the rebound is not consistent across the globe, it is an encouraging sign that commerce is returning to normal.
What we find notable is the speed of the recovery in trade volume and consistency with our comments last week regarding the fast pace of US jobs re-creation. The causal nature of this recession was highly unusual, near universal global government-led economic lock-down, so it is not all that surprising that the recovery could be quicker than normal. Several factors could disrupt the recovery including a potential second wave of viral infections, lack of an effective vaccine or therapeutics, and ongoing trade tensions. But, improving macroeconomic trends are welcomed worldwide.