Exports increased to their highest level in nearly two years in July, narrowing the trade deficit more than expected.
The deficit decreased 14 percent to $42.8 billion, down from a revised $49.8 billion in June, and provided a boost to the nation's economic recovery, the Commerce Department reported Thursday.
July exports posted a $2.8 billion gain over June's $150.6 billion showing, while imports fell by $4.2 billion or 2.1 percent to $196.1 billion, down from $200.3 billion in June.
So far through July, the trade deficit is 32 percent higher than the deficit in 2009, with an annual rate of $495.1 billion in 2010 compared with $374.9 billion last year. The deficit narrowed significantly last year because the recession affected the demand for imports.
Despite an expected increase in the trade deficit this year, an improving global economy should help increase worldwide demand for U.S. products, providing a boost to U.S. manufacturers, which have been a bright spot in the nation's economic recovery so far.