The nation's international trade gap inched upward ever so slightly in July, rising from June's $41.9 billion to $42.0 billion. Lower exports were largely offset by a reduction in imports during that month. The June number, meantime, was a downward revision from the initially estimated deficit of $42.9 billion in June. Expectations had been that the trade gap would have jumped up to $44.8 billion in July. 

The decrease in exports from June to July represented a diminution in industrial supplies and materials, automotive vehicles, parts, and engines, and consumer goods. Increases in exports reflected greater shipments of foods and beverages.

The decrease in imports represents lesser shipments into this country of industrial supplies and materials and capital goods. Increases included higher shipments of automotive vehicles, parts, and engines. 

Regionally, the goods deficit with Canada increased from $1.5 billion in June to $2.1 billion in July. The goods deficit with China, meanwhile, rose from $27.4 billion in June to $29.4 billion in July. The goods deficit with the European Union surged from $8.4 billion in June to $12.0 billion in July. The European debt crisis is clearly taking a toll on our country, as exports to countries using the euro tumbled 14.5% in July, to $14.9 billion. The deficit with the euro zone caused our aggregate export total to fall by $1.0 billion in July.

Meanwhile, the volume of oil imports rose in July, climbing to 275.14 million barrels from 263.44 billion barrels in June. However, the average price for oil declined that month. Since that time, however, oil prices have risen notably, suggesting that the August trade gap is likely to widen. Taken as a whole, the report was reassuring, although it may be a brief respite from what is likely to be a widening trade gap as we wind down the year, if recent trends in oil prices are sustained. For now, though, the lower aggregate trade deficit could help growth to pick up in the third quarter, while the trade gap's downward June revision could provide a slight boost to revised GDP figures for the recent quarter.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.