Trade Gap Shrunk 14% in July

The widening trade deficit was partially responsible for the big downward revision to U.S. growth in the second quarter, but July's data indicates some good news on trade. The gap shrunk by $7.0 billion, or 14%, according to the Bureau of Economic Analysis. With additional exports and fewer imports, it's pretty good news across the board.

Let's start with the chart:

trade gap 2010-07.png

It's pretty easy to see that the trade balance (red line) wasn't quite as negative in July with a $42.8 billion deficit, compared to the $49.8 in June. The major driver was the $4.2 billion decline in imports (yellow line). Exports rose as well, by $2.8 billion to $153.3 billion.That's the highest exports tally since August 2008.

The only negative thing you can really say about this report is that movement wasn't more extreme. Even though the gap shrunk to $42.8 billion, it was still the second largest deficit since November 2008. But the $7.0 positive change in the trade balance is the largest since February 2009 and reverses the gap swelling for the prior three months straight. If this new trend continues, it will be very good news for the economic recovery.

>

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In