Everyone Is Jacking Up Their Estimates For Q2 GDP

This morning we learned the U.S. trade deficit unexpectedly narrowed to $41.5 billion, a five-month low.

As a result, Wall Street firms' GDP models are climbing.

"Trade data are always a lagging economic indicator as it takes time to get things boxed and shipped, but this is yet another sign that the economy is normalizing six years after the recession ended," Bank of Tokyo-Mitsubishi's Chris Rupkey said in a note. " The trade deficit narrowed in June to $41.5 billion from $44.7 billion in May, which may revise 4% GDP in the second quarter a little higher, not that it needs it."

Capital Economics says it now sees 4.2% annualized Q2 GDP growth, up from the initial reading of 4% .

Barclays' model ticked up to 4.3% from the 4.0% initial reading.

We're likely to get a couple more upward revisions this morning, so stay tuned.