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More news which confirms the soft patch

The trade deficit expanded by more than expected in May, thanks mainly to higher petroleum prices, but as Brian Wesbury notes, oil prices fell in June so this should wash out and probably have little impact on second quarter GDP. But the contribution of trade to GDP is not as important as the ongoing, strong gains in exports, which have been growing at a 15-20% annual rate for the past two years and have surpassed their pre-recession high. This is very impressive, and good evidence that the U.S. economy is still among the world's most dynamic—strong export growth is helping to offset the weakness in finance and construction. It also reinforces the fact that global economic activity remains strong.

The UCLA/Ceridian Pulse of Commerce Index has been making slow upward progress for the past six months or so, providing more confirmation that indeed the economy has been in a "soft patch."

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