Trade deficit drops to three-month low as exports hit record level

The nation's trade deficit dropped sharply in July as exports hit an all-time high, a much-needed jolt for the stagnant economy. 

The sale of cars and airplanes helped lower the U.S. trade deficit to $44.8 billion in July, the lowest level in three months and a drop of 13.1 percent from the $51.6 billion gap in June, the Commerce Department reported on Thursday. 

Exports increased 3.6 percent to a record $178 billion, up $6.2 billion from $171.8 billion in June on improved sales of industrial supplies and materials, capital goods and automotive vehicles, parts and engines, Commerce reported. 

Imports in July dropped 0.2 percent, to $222.8 billion, from June's $223.4 billion, as the price of oil dropped. 

The numbers provide greater backing for the Republican push for the White House to submit to Congress three pending free trade agreements, with Colombia, South Korea and Panama — demand from Latin America increased in July. 

Senate Republicans argued on Wednesday that action needs to be taken immediately on the trade accords to create U.S.-based jobs and avoid further loss of market share in those countries. 

The export numbers also should help President Obama, whose administration is aiming to double exports by 2014 as a way toward more job creation. He might hit on the effort during a speech later Thursday on his jobs plan. 

The decrease in goods imports was more than accounted for by decreases in industrial supplies and materials and other goods. An increase in automotive vehicles, parts and engines was partly offsetting.

Imports from China continued to tick up, rising 2.1 percent to $35.1 billion, widening the trade gap to $27 billion, the highest level in 10 months.