The chart below, courtesy of Stone McCarthy, shows monthly exports to Europe.Pretty self-explanatory of the mess Europe is in. Recent austerity is certainly going to send the chart to new lows in coming months.
Following consecutive monthly gains, Exports to Europe dropped a massive $4.0 billion in April, the largest monthly decline dating back to January 2005, including a $2.8 billion drop to the EU alone. In particular, Exports to Germany declined $0.4 billion in April and are now only up about 0.2% over the past year. Overall, Exports to Europe are now down 2.7% from April 2011, the first yearly decline since February 2010. The recent slowdown of Exports to Europe supports the FOMC assessment that sluggish economic growth in Europe is likely to affect trade with the US.