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Foreign trade in a V-shaped recovery

As the first chart shows, foreign trade has yet to return to the peak levels of 2008; indeed, we are still well short of reattaining those levels. But as the second chart shows, the rebound from the bottom has seen the fastest rate of growth in exports in decades. Imports are up at a 37% annualized rate in the six months ended in November, which marks by far the fastest pace of growth in imports in many decades. Exports boost our economy, but they are also a good proxy for the health of global economies. Imports "subtract" from GDP growth, but their strength is a direct reflection of the strength of domestic demand, which in turn is a good proxy for the general health of our economy. By either measure, things are turning around impressively.

This was a severe recession, but the rebound must surely be categorized as "V-shaped."

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