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Economics

A Shrinking U.S. Trade Deficit—Brought to You by Fracking

A tanker being loaded with oil products in Corpus Christi, Tex.
A tanker being loaded with oil products in Corpus Christi, Tex.Photograph by Eddie Seal/Bloomberg

Almost entirely on the back of stronger exports, last week the U.S. Commerce Department revised upward its economic growth estimate for the second quarter, from 1.7 to 2.5 percent. Exports from April to June grew at their fastest pace in two years, pushing down the U.S. trade deficit to 2.7 percent of gross domestic product. That’s less than half what it was at its peak of around 6 percent of GDP in late 2005.

Most of the boost in exports came from tangible stuff sold abroad: goods, rather than services. The biggest among them were petroleum products refined from all the crude oil the U.S. is producing—unlocked by fracking. Through June, the U.S. has exported an average of 99 million barrels of petroleum each month over the past year. That’s roughly quadruple the amount the U.S. was exporting a decade ago.