Unemployment in the US and Euroland overnight officially reached 9.5 per cent while the local bad news was yesterday's deterioration in the trade deficit thanks to weaker export prices - and none of that is a surprise.
Wall Street was surprised by the size of the fall in nonfarm jobs last month - 467,000 when the tipsters had predicted 325,000 - as this broke the run of ''less worse'' news. Yet the unemployment rate reaching a 26-year high was expected and it will get worse. That's what happens in severe, prolonged recessions such as the one gripping the USA.
Meanwhile any surprise or shock about the fall in Australian export income announced yesterday only shows ignorance. As the Australian Bureau of Statistics release spells out, it was mainly thanks to lower coal prices. The seasonally adjusted balance on goods and services for May was a deficit of $556 million after the coal, coke and briquettes component dropped $540 million in the month.
And that can be made to look even worse. As the ABS noted earlier in the week, May prices for coking coal were down 27 per cent from April and 40 per cent from March.
But anyone who's had an interest in such things already knew that. It's been in the Australian Bureau of Agricultural and Resource Economics forecasts for several months and has been well covered by various scary headlines about falling commodity prices.
The reality remains, though, that our key commodity exports are still pulling prices nicely above what they earned in 2007-2008, only falling from the nonsense bubble prices set last year.
That, in turn, is all about our economy being part of the Chinese and Indian hemisphere rather than the North American and European one.
Asia-centric times
That the latter's outlook remains bleak is a given. Large parts of the commentariat, reflecting its American-centric nature, still tends to think the US/European game is the only one that matters, that global economic recovery depends entirely on trade patterns returning to ''normal'' i.e. western consumers consuming ever greater amounts of stuff and emerging markets producing and exporting said stuff.
But that's not going to happen, or at least it's not going to happen for a number of years. The indebtedness and flawed structure of the US economy requires years of deleveraging that precludes a resumption of the consumption binge we came to think of as normal.
The doomsayers point to that and say the strengthening of Chinese economic growth therefore can't last because China relies on exports for economic growth. That is simplistic but it also has been basically true.
Fortunately there are plenty of signs that Beijing understands the problem and, unlike the US, is clearly working to do something about it. The switch to greater reliance on Chinese domestic consumption will not be easy to achieve - it is a massive task involving dislocations beyond the understanding of little ''lucky country'' economies such as ours. But they're working on it.
India next
And then there's India, whose finance ministry is talking about sustainable growth of 7 per cent this year and more in coming years if key reforms are enacted. Even with its present gross inefficiencies, India managed 6.7 per cent growth in the year to March.
The common misunderstanding about India is that it's as globalised as the next emerging market. It's not.
The call centres and software outsourcing attract the news coverage, but the reality is still a basically agrarian and domestic-focused economy. The plunge in global trade volumes has had a relatively small impact on the emerging Asian giant.
The upside there is the possibility that the newly-elected government will push ahead with the basic economic reforms necessary to unleash the nation's further growth potential. That is a lot of upside.
Don't worry too much about looking for green shoots in the US and Europe or be spooked by signs of them withering; it's the bamboo shoots that count. And if you've ever seen that stuff get loose in a backyard, you'll know just how tough bamboo can be.
Michael Pascoe is a BusinessDay Contributing Editor
