IMF says U.S. economy poised to accelerate

June 16, 2014
ECONOMY
IMF says U.S. poised
to accelerate in 2014

The U.S. economy is poised to accelerate after a dismal start to the year even though the job market won’t return to full employment until 2017, the International Monetary Fund forecast in a report Monday.

The IMF noted that steady job gains and other recent data suggest the economy is rebounding. Employers have added 200,000-plus jobs for four straight months, and the unemployment rate has fallen to 6.3 percent. Auto sales and factory activity are increasing.

Yet growth this year isn’t likely to top last year’s lackluster performance, the IMF said. The Washington-based organization foresees the U.S. economy growing a modest 2 percent this year, below its previous estimate of 2.7 percent. That would be nearly identical to the 1.9 percent growth last year.

The IMF blamed the lingering aftermath of a brutal winter and a sluggish recovery in home sales. Years of disappointing growth mean the economy might not reach full employment — which many economists define as an unemployment rate between 5 and 5.5 percent — for three more years.

Christine Lagarde, the IMF’s managing director, suggested at a news conference that the past winter showed that another wild card — climate change — might be holding back the economy and could make predictions more difficult.

“Extreme weather occurrences have repeated much more frequently in the past 20 years than the previous century,” she said. “That’s a reason to wonder about climate change and how to deal with it.”

Yet the IMF is optimistic that a “renewed dynamism” will propel growth for the rest of the year, partly offsetting what many analysts think was a contraction of up to 2 percent last quarter.

— Associated Press

ENERGY
LNG exports may
violate federal law

Sen. Edward J. Markey (D-Mass.) said Monday that permits for exporting natural gas may violate the Energy and Policy Conservation Act of 1975, which banned overseas sale of oil or gas.

An executive order by President Gerald R. Ford in 1976 delegated rulemaking and exemption permits to the Commerce Department. Markey, a foe of liquified natural gas exports, said Commerce has not issued such guidelines.

Markey said the Energy Department’s seven LNG export permits and licenses for gas exports to Canada and Mexico through pipelines could be open to a lawsuit under the Administrative Procedure Act.

— Steven Mufson

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