This morning, the U.S. Department of Commerce issued its latest report on the international trade gap and it was another positive snapshot of the U.S. economy. Specifically, data showed that the U.S. trade gap narrowed during the month of September, to a deficit of $41.5 billion—exports rose to $187 billion, while imports increased to $228.5 billion. That figure was significantly better than the $43.8 billion deficit recorded during the month of August and far lower than the consensus expectation of a $45.1 billion deficit.

When broken down into individual components, the trade gap figure is even just as uplifting, as several sectors of the economy contributed to the latest improvement. Specifically, the increase in exports from August to September reflected: $3.4 billion increase in industrial supplies and materials; a $0.4 billion pickup in capital goods; a $1.1 billion increase in foods, feeds, and beverages; and a $200 million increase in other goods. The only setback was in the automobile vehicles, parts, and engines category, which fell by $900 million.

The latest report in which exports rose 3.1%—a significant improvement from recent quarters—is yet another sign that economic conditions on these shores are improving, if at a measured pace right now. The increase in imports is also an indication that the U.S. consumer is buying more, which, along with recent better-than-expected reports on manufacturing and nonmanufacturing activity, are encouraging signs heading toward the all-important holiday shopping season.

By geographic region, data showed that the goods deficit with China increased from $28.7 billion in August to $29.1 billion in September, while the deficits with the European Union and Japan decreased from $11.7 billion and $6.7 billion to $8.6 billion and $4.8 billion, respectively. Going forward much attention will be given to the account balances with Europe, as recent data suggest that growth in the euro zone is likely to slow significantly in 2013. A weak Europe would likely have an effect on the amount of U.S. exports to the region, which, in turn, could affect manufacturing activity in the United States.

All in all, the latest trade gap data were an encouraging sign for the U.S. economy, and another indicator that the economy is still moving ahead, albeit at a rather pedestrian pace. 

At the time of this article's writing, the author did not have positions in any of the companies mentioned.