U.S. trade deficit grew slightly to $42B in July

The U.S. trade deficit grew to $42 billion in July, widened by fewer exports to Europe, India and Brazil that offset a steep decline in oil imports. The Commerce Department reports this morning that the trade deficit increased 0.2% from June’s deficit of $41.9 billion. U.S. exports fell 1% to $183.3 billion. Sales of autos, telecommunications equipment and heavy machinery all declined. Imports, meanwhile, also dropped 0.8% to $225.3 billion. Economists note that the deficit would have grown much faster had it not been for a 6.5% drop in oil imports, largely reflecting cheaper global prices. Prices have increased since then, while demand for exports has dampened. “It won’t be long before the deficit widens more significantly as the global slowdown takes a greater toll on U.S. exports,” says Paul Dales, senior U.S. economist at Capital Economics. Dales says trade will likely weigh on growth in the second half of the year. The Associated Press has the full story here.