The trade balance, better known as the trade deficit, widened out in May to -$45 billion in the preliminary report, and now the June report shows that the trade deficit came in much lower at -$34.2 billion. What has happened in the report from the Commerce Department is that exports rose by 2.2% to $191.17 billion and imports fell by 2.5% to $225.4 billion in June, making it a perfect storm. Bloomberg had the consensus estimate as -$43 billion, taken from a range of -$48.3 billion to -$38 billion from its polled economists.

Capital goods, consumer goods and industrial supplies being exported made the difference here at a time when auto parts and cars were weaker. The good news is that rising exports may signal that the slowing in Asia and the weakness in Europe are continuing to base out and perhaps even be improving. Petroleum imports were at the lowest reading in two and a half years.

The International trade balance is made up of merchandise and services, broken down as imports, exports and trade balance.