Trade deficit shrinks to $593 million in July

Exports increased by more than imports did in July, which pushed Canada's trade deficit with the rest of the world down to $593 million in July.

Statistics Canada reported Thursday that Canada exported2.3 per cent more goods in July than the economy did in June. The increase was mainly due to an uptick in non-energy products.

That was larger than the 1.3 per cent increase in the amount of imports, which narrowed the trade deficit from$811million in June to $593million in July.

Exports to China jumped by 11.7 per cent, the data agency said.Exports to the United States increased2.1 per centto $34.7billion.

All in all, the reaction to the trade numbers was encouraging, coming on the heels of poor GDP data earlier this week.

"This is supportive of the hope that non-resource exports can rise on the back of U.S. economic strength and [the loonie's] depreciation to compensate for resource sector weakness," Scotiabank's economics team said in a research note after the numbers came out.