The U.S. trade deficit widened sharply in July from a four-year low the previous month as exports fell while imports rebounded, the government reported Wednesday. The Commerce Department said the trade deficit rose 13 percent to $39.1 billion from $34.5 billion in June, which was the smallest imbalance since 2009. Imports increased 1.6 percent to $228.6 billion, as autos hit a record high and oil shipments rose. Exports fell 0.6 percent to $189.4 billion from a record high in June. Despite the decline, exports of petroleum products reached a record high. Weak overseas demand, especially in Europe, has caused a decline in export growth after international trade helped to lift the U.S. economy out of the 2007-2009 recession. In July, exports to the 27-country European Union (EU) fell 7.4 percent, resulting in a record trade deficit with the bloc. Exports to the EU in the first seven months of the year were down 4.4 percent compared to the same period a year earlier. Exports to China fell 4.9 percent. China has been one of the fastest-growing markets for U.S. goods, but growth there has slowed in recent months, and exports to the country were up only 4 percent for the first seven months of 2013. Imports from China jumped 8.3 percent in July, lifting the politically sensitive U.S. trade deficit with the country to a record $30.1 billion. When adjusted for inflation, July's overall trade deficit rose to $47.7 billion from $43.8 billion the previous month. The measure goes into the calculation of gross domestic product (GDP). Trade's contribution to GDP growth in the second quarter was neutral, but economists expect it to add to growth this quarter, despite the growing deficit. The U.S. economy grew at a 2.5 percent annual rate in the second quarter, an improvement from the first-quarter's 1.1 percent pace.
