US trade gap narrows following export boost

787 Dreamliner Exports of aircraft helped narrow July's trade gap - Boeing hopes its yet-to-be-delivered 787 Dreamliner will keep up the flow

The US trade deficit was smaller than expected in July, figures have shown, as exports reached their highest level in almost two years.

US Commerce Department figures showed the gap between imported and exported goods fell 14% to $42.8bn (£27.8bn).

Exports rose by 1.8% as US-made goods such as aircraft, industrial machinery and computers proved popular.

Imports dipped 2% as consumer demand for items such as clothing, televisions and toys fell.

The fall in imports reflects the slowdown of the US economy, with consumers and businesses spending less.

The trade figures marked a turnaround from June, when the trade gap had reached a 20-month high.

However, despite July's better numbers, the trade deficit is running at an annual rate of $495.1bn, 32% higher than the $374.9bn deficit for 2009, when imports fell significantly due to the global slowdown.

US stock markets opened higher following the trade figures. Stocks were also boosted by separate data from the US Labor Department that showed the number of first-time jobless claims fell last week.

The stubbornly high unemployment rate in the US continues to worry investors, but the latest numbers offer hope that there might be some improvement in the labour market.

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