Our July trade deficit fell by 7.3% from June as the value of our exports rose and the value of our imports fell.  The Census report on our international trade in goods and services for July indicated that our seasonally adjusted goods and services trade deficit fell by $3.3 billion to $41.9 billion in July from a June deficit which was revised from $43.8 billion to $45.2 billion.  The value of our July exports rose $0.8 billion to $188.5 billion as our exports of goods rose by $0.6 billion to $128.2 billion and our exports of services increased $0.2 billion to $60.3 billion, while our imports fell $2.5 billion to $230.4 billion on a $2.7 billion decrease to $189.6 billion  in our imports of goods which was partially offset by a $0.2 billion increase to $40.8 billion in our imports of services.  Export prices averaged 0.2% lower in July, so the real growth in exports was higher by that fraction, while import prices were 0.9% lower, thus incrementally increasing real growth in imports by that percentage from the nominal dollar amounts reported here.

Referencing Exhibit 7 in the Full Release and Tables for July, we find that a $596 million increase to $13,275 million in our exports of vehicles, parts, and engines was largely responsible for our increased exports  In addition, our exports of industrial supplies and materials rose $303 million to $37,376 on a $348 million increase in our exports of non-monetary gold, our exports of capital goods rose $179 million to $44,298 million on increases in most line items including $462 million more industrial machines that more than offset a $738 million decrease in our exports of civilian aircraft, our exports of foods feeds and beverages rose $178 million to $10,691 million on a $263 million increase in our exports of soybeans, and our exports of goods not categorized by end use rose by $151 million to $5,632 million.  Those export increases were partially offset by a $426 million decrease to $16,327 million in our exports of consumer goods.

Meanwhile, Exhibit 8 in the Full Release and Tables shows us that a $2,609 million decrease to $47,806 million in our imports of consumer goods was largely responsible for our reduced July imports, as we imported $1,469 million less pharmaceuticals and $1,251 million less cellphones and similar household goods than in June.   In addition, our $10,525 million in imports of foods, feed and beverages were $593 million less than in June, as we imported $278 million less fish and shellfish and $147 million less meat products.  Partially offsetting those decreases, our imports of industrial supplies and materials rose by $370 million to $42,285 million on a $456 million increase in our imports of crude oil, our imports of vehicles, parts, and engines rose by $326 million to $30,003 million, our imports of capital goods rose $233 million to $49,291 million on a $576 million increase in our imports of computers, which was partially offset by a $229 million decrease in our imports of civilian aircraft, and our imports of goods not categorized by end use rose by $158 million to $6,931 million. For more details on the specifics, the two itemized lists that we referenced show the value of more than 200 export and import line items, both monthly and year to date, in table form in exhibit 7 and exhibit 8 of the full pdf for this release...

To gauge the impact of July trade on 3rd quarter growth, we must first adjust the value of July imports and exports for inflation and compare July to the similarly adjusted 2nd quarter figures.   Exhibit 10 in the pdf for this report gives us monthly goods trade figures by end use category and in total in chained 2009 dollars, the same inflation adjustment used by the BEA to compute trade figures for GDP, albeit they are not annualized.  From that table, we find that 2nd quarter real exports averaged 120,343 million monthly in 2009 dollars, while inflation adjusted July exports were at 120,725 million using the same 2009 dollar quantity index.  Annualizing the change between the two figures (ie, (120,725 / 120,343) ^ 4), we find that 3rd quarter real exports are running at a 1.28% annual rate over those of the 2nd quarter, or at a pace that would add 0.16 percentage points to 3rd quarter GDP.   In a similar manner, we find that our 2nd quarter real imports averaged 178,201 million monthly in chained 2009 dollars, while inflation adjusted July imports were at 176,933 million.  That would indicate that so far in the 3rd quarter, our real imports are falling at a 2.8% annual rate from those of the 2nd quarter.  Since imports subtract from GDP because they represent the portion of consumption or investment that occurred during the quarter that was not produced domestically, that 2.8% rate of decline would add another 0.42 percentage points to 3rd quarter GDP.  Hence, if July trade figures are maintained throughout the 3rd quarter, our improving balance of trade would add 0.58 percentage points to the growth of 3rd quarter GDP.