The Recent Uptick In Global Trade Won’t Last: The Kiplinger Letter
Global trade continues to fall as economic growth around the world cools.

To help you understand what is going on in trade globally, and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
The recent uptick in global trade won’t last long. World goods trade rose 0.4% in August from July, adjusted for inflation. Trade has barely budged since February and it’s now 4.4% below its peak in September 2022. The new-export-orders component of the global manufacturing purchasing managers’ index (PMI) remained below 50 in September. This suggests that worldwide demand for exports is weak and still contracting.
Trade will continue to fall as economic growth around the world cools. Several advanced economies will likely fall into a mild recession or at least a stretch of very weak GDP growth later this year, which will weigh on demand for traded goods. With a lot of the hit from higher interest rates still to come, demand for goods, particularly high-value goods such as autos and furniture, should weaken, given that spending on such items tends to be more sensitive to interest rates.
Against this global backdrop, the Canadian economy is weakening amid mounting headwinds. Initial data show that Canada’s GDP rose 0.1% in August from the previous month, following near-zero growth over the prior six months. The main bright spot for Canada has been the labor market, which continues to add jobs, keeping the jobless rate low.

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Still, the odds favor a slowdown for Canada, not a recession. Several factors will weigh on the economy for the rest of the year. Variable-rate mortgages, which are common there, have pushed up households’ financing costs recently. Interest costs are 9% of disposable incomes, which is high by historical standards. The business outlook is bleak, as declining profit growth crimps corporate spending.
The Bank of Canada is open to further rate hikes if inflation stays too high. It stood pat in October but said it is ready to raise rates further if prices don’t cool off.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
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Rodrigo Sermeño covers the financial services, housing, small business, and cryptocurrency industries for The Kiplinger Letter. Before joining Kiplinger in 2014, he worked for several think tanks and non-profit organizations in Washington, D.C., including the New America Foundation, the Streit Council, and the Arca Foundation. Rodrigo graduated from George Mason University with a bachelor's degree in international affairs. He also holds a master's in public policy from George Mason University's Schar School of Policy and Government.
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