The EMU trade surplus has fallen off month to month but the recent surplus still is large. In EMU domestic demand is collapsing and with it import volume is contacting. Weaker imports have helped even weakening export trends to create a bulge in the region’s trade surplus.

The chart shows clearly that while export and import have trended to track one another, over the past three months imports have spurted and showed much greater weakness.

This month imports blipped up exceed export growth and helped to shrink the trade surplus slightly.

Export growth is still head and shoulders above import growth on all horizons. The EMU trade surplus is positioned to be in place for some time.

Currently there is enough weakness in EMU to constrict imports but EMU has enough of an export base to outside area that exports have kept up and these external markets have continued to be strong. The EMU is keeping its economies going in the ace of austerity and a now-tightening monetary policy by siphoning off the domestic demand from other countries, one of them being the US. We are back to playing that game and before long the US will be widely criticized for running a large trade deficit again. What else is new?