Aided by a jump in exports and an equally impressive fall in imports, the U.S. trade deficit unexpectedly shrank to $42.8 billion in July, the U.S. Commerce Department announced Thursday.

A Bloomberg survey had expected the trade deficit to fall to $46.8 billion in July from $49.8 billion in June. The measure totaled $41.8 billion in May.

July exports rose 1.8% to $153.3 billion, after a 1.3% decline in June. It was the highest export total since August 2008. Imports fell 2.1% to $196.1 billion, after a 1.3% increase in June.

Good News for Institutional Investors

Equally significant, nonoil imports -- which excludes the often-volatile energy component -- plunged 3% in July, after a 4.6% surge in June. That pushed the nonpetroleum deficit down to $33.2 billion in July from $39.7 billion in June.

Economists generally prefer that a nation run a trade surplus as opposed to a deficit because it usually implies that a nation's goods are competitive on the world stage, its citizens aren't consuming too much and that it's amassing capital for future investment.

Institutional investors who say the key to the U.S. economy's success remains the industrial sector will be pleased by July's trade report because capital goods exports rose $2.3 billion, excluding vehicles.

However, the trade deficit's three-month moving average inched slightly higher, to $44.8 billion in July from $43.9 billion in June. Also, the July data total brought the 2010 trade deficit to $288.8 billion for the first seven months of 2010, up 41.6% from $204.0 billion for the same period a year ago.

In July, trade surpluses were recorded with Hong Kong at $1.8 billion, down from $2 billion in June; Singapore at $1.2 billion, up from $1 billion; Australia at $900 million, down from $1 billion; and Egypt at $400 million, up from $200 million.

Top U.S. trade deficits were recorded with China at $25.9 billion, down from $26.2 billion in June; European Union at $9.9 billion, up from $7.8 billion; OPEC at $8 billion, down from $8.9 billion; Mexico at $5.3 billion, down from $6.2 billion; Japan at $4.9 billion, down from $5.2 billion; and Germany at $3.6 billion, up from $3.1 billion.

Finding Buyers Abroad

July's trade report represents a shot-in-the-arm for the stock market's bulls because it shows that even though domestic U.S. consumer spending has been tepid and the housing sector still hasn't stabilized, the nation's products and services are finding buyers abroad. Exports remain a bright spot in the U.S. economic recovery, and provided that the uptrend is maintained, they'll continue to add to U.S. GDP.

Rising exports also generally lead to higher revenue and earnings for the U.S. multinational corporations -- and historically, as revenue and earnings go, so goes the U.S. stock market.

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Hey World News Only, If you expect to get much if any intelligent comments on this board you are dillusional. 99% of the people writing on political message boards have no clue as to what they are saying. They hear some pundit or another say whatever and these people believe what they hear because they are to lazy or not caring enough to fact check what the heard. Instead they would rather spew hate because just maybe they do not want to know the truth because it doesn't fit with what they want to be the truth.I once wrote on a political board that I wished people would go to so thay could see the truth about all the lies being told about him. Now that is all I wrote and guess what, I got a large amount of thumbs downs on my post. This only goes to prove that these people are not interested in the truth just their own little prejudices.

September 10 2010 at 10:17 AM Report abuse rate up rate down Reply
1 reply to bookstuboo's comment

We have as word for these dimwits parroting nonsense. That word is Beckerheads.

September 10 2010 at 6:23 PM Report abuse rate up rate down Reply

We could all help lower the trade deficit and keep or in some cases, bring back jobs with livable wages if everyone looked at the labels of the products we buy. Buy American made whenever possible, even if you have to save a few more bucks to do it. If we want to get paid a livable wage, we have to be willing to pay for the work of another persons livable wage. I still believe American made goods are better than the cheap Asian imports made with slave labor. You don't save money buying cheap imported goods that prematurely fail. In one year, I bought three different coffee makers at Wal/Chinamart. They all were made in China. Finally, I spent $100 on a Bunn coffee maker that's mostly made in the U.S.A. I've had it for over a year now with no problems. I also got tired of my clothes falling apart after the first washing, so I found a website that sells only American Made clothing. Google "Justice Clothing Company" or American Made clothes if you want to check their legitimacy. These things are just an example. buying Bunn coffee makers, Kitchenaid mixers, and American made clothing won't get us out of the mess where in, but it's a start.

September 10 2010 at 7:44 AM Report abuse rate up rate down Reply

I think Borat O'Bama should blame this on Bush. If the numbers are good and they are meaningful, they are probably a result of the Bush Administration!

September 10 2010 at 7:39 AM Report abuse +1 rate up rate down Reply
1 reply to Randy's comment
mitch rochelle

stupid is as stupid says

September 10 2010 at 8:29 AM Report abuse rate up rate down Reply

I do not beleive the numbers. More propaganda from the Obama camp. Ironic all the good news 2 months before the mid terms. Can't wait to see next months.

September 10 2010 at 7:13 AM Report abuse +3 rate up rate down Reply

Get to the basics. Start making somthing what other people would buy.

September 10 2010 at 6:53 AM Report abuse +1 rate up rate down Reply

With 41.6% increase in US trade deficit you mast be kidding that we are heading in positive direction

September 10 2010 at 6:50 AM Report abuse +2 rate up rate down Reply
Frank G

We're talking about the TRADE deficit here people!!!

September 10 2010 at 3:15 AM Report abuse +3 rate up rate down Reply

They must of had some LSD before making that report.

September 10 2010 at 1:49 AM Report abuse rate up rate down Reply

13 Trillion is the number according to some economists.

September 10 2010 at 1:02 AM Report abuse +1 rate up rate down Reply
2 replies to jm2100's comment

What's another Dime ?

September 10 2010 at 1:46 AM Report abuse +2 rate up rate down Reply
world news only

God, don't tell me these people do not know the difference between a budget deficit, which is in trillions, and the trade deficit? Folks, no wonder you believe anything you read or hear as long as it is something or someone you can hate, you don't know enough yourself, obviously about anything, to make a sensible statement. The article is about the TRADE DEFICIT, THAT IS THE DIFFERENCE BETWEEN AMOUNT OF GOODS WE EXPORT AND THE AMOUNT OF GOODS WE IMPORT!!! Get it? when you buy at Walmark, and when you buy goods made in other countries, you are adding to the TRADE DEFICIT. The BUDGET DEFICIT reflects the amount of money the government spends over the amount of taxes they are able to collect. Get it? At least, learn to understand what is written, because at no time did this article mention budget deficit! The Multi-national corps. make more more when the US has more exports than imports, but it also increases stock market prices; of coursse if you do not own any stocks, then you do not profit, nor are you hurt either way. Unless of course the multinational corps use that incrase in $ to hire new workers, which they stopped doing a long time ago and has nothing to do with Obama and Bush. Educate yourself, you will see a whole new world out there, and maybe can respond to an article and make a statement about what the article is talking about at least.

September 10 2010 at 5:16 AM Report abuse +6 rate up rate down Reply

This doesn't seem correct. If it was trillions - it may be right. Lets hear the results after the Health Care taxes kick in over the next decade. Grandchildren will be up their eyeballs, too, with more costs than we can afford. The USA needs a good bookkeeper that says "whoa" when we spend more than we have - seems like a fantasy, but there was a bill introduced some years ago by a Republican to outlaw deficit spending.

September 10 2010 at 1:00 AM Report abuse -6 rate up rate down Reply
1 reply to jm2100's comment
mitch rochelle

to jm2100 read world news only post it will help u understand what the article is about i know it hard to pull yourself away from fox news but will help you lemming republicans to understand what there talking about

September 10 2010 at 8:35 AM Report abuse -1 rate up rate down Reply