International Trade Balance
The U.S. trade deficit in goods and services narrowed to $44.8 billion from $48.9 billion in June. Exports rose 3.6% to $178.0 billion and imports declined 0.2% to $222.8 billion. The trade deficit in goods narrowed to $60.6 billion and the trade surplus in services rose $0.3 billion to $15.8 billion in July. Despite weakness in the global economy, we expect exports to continue to rebound in the next few months and for imports to gradually rise as well.

ISM Nonmanufacturing Index
In August, the Institute for Supply Management’s nonmanufacturing index rose to 53.3 from 52.7 in July. The index remains above the threshold of 50 for an expanding economy. Moreover, all but one of the index components were above 50 as well. Although survey respondents indicated that uncertainty was rising and consumer demand was flat, overall, this reading is consistent with an economy that is slowly improving.

Consumer Credit
In July total consumer credit grew 5.9% at an annual rate, or $12.0 billion, to a total of $2.45 trillion. The rise in consumer credit was due to an increase in non-revolving credit, which offset a decline in revolving credit. Revolving credit fell 5.2% at an annual rate to $792.5 billion, after increasing at a 3.9% rate in June. Non-revolving credit increased at a 11.2% annual rate after increasing at a 6.4% pace in the previous month. Consumer demand picked up a bit in July as rates have dropped, but consumers are continuing to pay down their credit card debt.