The United States trade deficit was 14% lower in July than it was in June thanks to a $2.8 billion increase in exports (lead by a $2.3 billion increase in capital goods, largely civilian aircraft) and $4.9 billion less in imports (lead by a $1.9 billion decrease in consumer spending on imported goods). Disappointingly weak growth in Europe (especially in the Mediterranean region) did, however, lead to a growth in the American trade deficit with the European Union. GDP for the second quarter grew much more slowly than had been expected (estimates were revised downward from 2.4% annualized growth to 1.6% growth) largely because the trade deficit took 3.4% out of potential GDP growth. The improved trade numbers suggest that American economic growth in the third quarter could be better than expected.

Meanwhile at the Washington Post Bruce Katz and Jonathan Rothwell of the Brookings Institution use a great deal of data to argue that the story about American trade and exports is far more encouraging that it has traditionally been seen.