Another glimmer of hope for the US economy and a further boost to George W Bush's re-election campaign has come in the form of better-than-expected trade figures.

The gap between exports and imports narrowed in July by nearly 9 percent to $50.1bn (€40.7bn, £27.8bn), the Commerce Department has revealed.

Imports fell by 1.4 percent to $146bn and exports increased by 3 percent to $95.9bn, helped by an upturn in civil aircraft sales and exports of vehicles and parts.

A drop in the price of oil to $33.28 per barrel smoothed the import figures but Janet Yellen, president of the San Francisco Federal Reserve Bank, warns the dollar must rally if the deficit is to improve further.

Mr Bush's administration has less to be cheerful about when it views the trade gap with China, which has continued to widen and looks set to hit $150bn by the end of the year.

Trade representatives are continuing to press China on moving to a floating exchange rate, which they say would level the trade playing field.

Data sourced from: The Washington Post Online; additional content by WARC staff