IMF: US Economy Improving But Tax Increases A Drag
Fed policymakers will meet June 18-19 and may provide some hint of their intentions. Chairman Ben Bernanke will also hold a press conference after the meeting concludes.
Despite the drag from higher taxes and spending cuts, the IMF paints a much brighter picture of the U.S. economy.
A year ago the IMF warned that the recovery was "tepid," job growth was slow and U.S. households were still cutting debts.
Now, it sees consumers in better shape and the job market slowly strengthening. After the impact of the tax increases and spending cuts fade, growth should accelerate next year to 2.7 percent. That forecast also assumes that Congress and the White House agree to lift the government's borrowing limit later this year.Still, the IMF expects unemployment will fall only gradually over the next two years. It forecasts unemployment will average 7.5 percent this year and fall to an average of 7.2 percent in 2014. The unemployment rate is currently 7.6 percent â¿¿ 0.6 percentage points lower than a year ago. The economy is also being held back by weakness overseas, the report said, which are slowing U.S. exports, particularly to Europe.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV