IMF TO LOWER U.S. GROWTH FORECAST IF SEQUESTER OCCURS
The International Monetary Fund (IMF) has warned that if the $85 billion in spending cuts, known as the sequester, go into effect tomorrow, it will lower its 2013 U.S. economic growth forecasts. Speaking to reporters in Washington, an IMF spokesperson said that if sequestration takes place, the negative impact on the U.S. growth outlook could be at 0.5 percent or more. Said the spokesperson, “What it means is we’ll have to reevaluate our growth forecasts in the U.S. and also our other forecasts,” meaning that the sequester’s spending cuts would also damage the economic growth of U.S. trade partners due to the resulting decline in demand in this country. Meanwhile, President Barack Obama and Congressional Republicans remain deadlocked on coming up with a plan to avoid the cuts. For more information about the sequester and its potential economic impact, read the APMEX Special Report, “Three Strikes Coming Soon for U.S. Economy,” written by APMEX CEO Michael Haynes.
New data released by the Commerce Department shows that although the U.S. economy didn’t contract by 0.1 percent in the fourth quarter of 2012 as originally reported in its end-of-January report, economic growth in this country is still basically stagnant. According to revised numbers, the economy actually grew by 0.1 percent, still below the 0.5 percent predicted by analysts and well below the 3.1 percent growth seen in 2012’s third quarter. Such a small change does not affect the current economic view that GDP is too sluggish to positively impact U.S. job growth, which is seen as a critical issue for the economy. Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors, summed it up in a research note by stating, “While the revision is technically an improvement, the bottom line is that it's still bad.”
At 1:05 p.m. (EST), the APMEX precious metals spot prices were:
- Gold, $ 1,582.70, Down $15.00.
- Silver, $ 28.59, Down $ 0.43.
- Platinum, $ 1,586.70, Down $ 15.40.
- Palladium, $ $732.30, Down $ 12.40.
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