Trade Deficit Shrinks Again as Exports Soar to Record

- The Trade Deficit for July shrank to -$59.2 billion versus estimates of -$59.0 billion and -$59.4 billion in June.

BOTTOM LINE: The US trade deficit narrowed in July as exports jumped by the most in three years, Bloomberg reported. The inflation-adjusted trade deficit, used to calculate growth, shrank to a three-year low. Exports rose 2.7%, the most since March 2004, propelled by sales of aircraft, automobiles and telecom equipment. Imports rose 1.8%, reflecting higher prices for oil. An improving trade deficit, lower inflation and inventory rebuilding should help boost US GDP growth to around 2-2.5% on average though year-end, despite all the imminent recession calls.