When the federal government increases the budget deficit it increases interest rates on everybody, so it is like a tax increase on borrowing. What that means is that mortgages will be more expensive.
Exports are off in virtually every category. I don't see much near-term improvement for the trade deficit. The trade deficit will probably shave about 0.5 percent off of third quarter Gross Domestic Product.
Demand in the U.S. economy is reasonably strong and retailers are probably optimistic about the holiday shopping season so they are starting to order from abroad now. The trade deficit is going to take some time to turn around. It may not happen until next year.
The upward revision results from the slightly lower than previously estimated trade deficit. We've already seen in July data that trade deficit has worsened in the third quarter.