The markets were in desperate need of good news today, after a tumultuous past week where the Dow Jones Industrial Average lost 1.82%. Early in the morning, the markets received just that, when the July Trade Deficit report was released. The good news came in the form of a shrinking trade deficit and record export numbers.
The US trade gap narrowed by 0.3% in July, mainly due to a jump in exports. It fell to $59.2 billion, from a revised June number of $59.4 billion. Exports rose to a record $137.7 billion for the month. The percentage gain of 2.7% was the highest since March 2004, or more than three years. Imports also rose to record levels, inching up 1.8% to $196.9 billion.
Although imports rose significantly, the export number is very positive. In today's sluggish economy, exports are still booming, giving a lift to US corporations and the economy as a whole, despite the slowdown and pending credit crunch. Better yet, exports are not likely to decrease in the near future, due to strong overseas growth and the unceasing devaluation of the American dollar. Exports are acting as a cushion for the economy in these uncertain times, while providing a platform from which it can take off in the future.