My views on the short term prospects for GDP growth at home and abroad were little changed (relative to this post) by the information in the March trade release. Goods imports are collapsing, albeit at a slower but still substantial rate, and goods exports are declining, with high volatility. First consider the growth rates of real goods imports ex.-oil and real goods exports.
Figure 1: Month-on-month annualized growth of real goods imports ex.-oil (bold red), and of real goods exports (bold blue); and year-on-year growth rates (respectively teal, purple); all in Ch.2000$, calculated as log differences. NBER defined recession dates shaded gray, assuming recession has not ended by May 2009. Source: BEA/Census, March trade release, NBER, and author’s calculations.
Note that imports seem to be recovering. But it’s important to look closely at the vertical axis; month-on-month annualized growth rate is minus 10.9%, and the year-on-year growth rate is minus 24.8%.
Goods exports month-on-month annualized growth rates have dropped back into negative territory — at minus 22.3%. But even the year-on-year rate is -15.4%. So here, I’m in agreement with Brad Setser’s observations ,  — trade has collapsed and there’s little evidence that there’s an incipient recovery.
Now, turning to the implications for future growth — I believe that a recorded decline in imports implies (conditional on observing other data) an increase in contemporaneous GDP, but a decrease in future growth prospects (holding all else constant).
It turns out that updating the advance release figures for imports with the actual March import numbers changes the implied GDP for 2009Q1 (to -5.9% SAAR, as opposed to -6.1% ), but does not change the overall picture regarding imports in a perceptible manner (see for instance Figure 1 in this April 27th post).
Originally published at Econbrowser and reproduced here with the author’s permission.