by Calculated Risk on 8/14/2008 09:13:00 PM

From the WSJ: World Economy Shows New Strain

The global economy -- which had long remained resilient despite U.S. weakness -- is now slowing significantly, with Europe offering the latest evidence of trouble.

On Thursday, the European Union's statistics agency said gross domestic product in the euro zone contracted 0.2% in the second quarter, the equivalent of a 0.8% annual rate of decline. It marked the first time since the early 1990s that GDP has fallen overall in the 15 countries that use the euro.
...
For the U.S., economic sluggishness abroad is both blessing and curse. Weak growth is tempering the torrid rise in prices of commodities such as oil, copper and corn ... But weaker foreign economies also undercut one of the few remaining bright spots in the U.S. economy: exports.

The decoupling argument - that the rest of the world would remain healthy while the U.S. was in recession - is proving wrong. Exports have been a bright spot for the U.S. and the key is that any slowdown in exports is offset by falling oil prices. Interesting times.

Note: I'll be out hiking the next two days. Tanta and Paul Jackson of Housing Wire will be handling the posts. Best to all.