By now everyone’s seen the headline about the revised fourth quarter growth numbers. They’re now saying we shrank at a 6.2 percent annualized rate. This explains the semi-mysterious fact that the U.S.-originating global recession seemed to be hitting Europe harder than it was hitting the United States. Now it just looks like we were undercounting the extent of the downturn. At the point, we all seem to be pulling each other down:
A wider trade gap than previously reported — that is, fewer American goods being purchased abroad — also pushed G.D.P. further downward. Exports fell at an annualized rate of 23.6 percent last quarter.
U.S. exports are falling, it would seem, because economies abroad are shrinking. And those economies, in turn, are shrinking because they were previously dependent on exports to the United States. New demand is going to be needed.