U.S. Treasury Secretary Expects Strong Economic Data in Second Half
U.S. Treasury Secretary Expects Strong Economic Data in Second Half
U.S. Treasury Secretary Jack Lew said Wednesday that he expects strong economic data for the second half of the year after lackluster growth in the first quarter.
"After a harsh winter that restrained growth in the first quarter, we are still expecting the underlying strength of the economy that was evident last year to result in a strong second half of this year," Lew said in a speech in Jerusalem at a conference of the U.S.-Israel Joint Economic Development Group.
Lew said recent economic data supports his optimistic outlook. In May, the U.S. economy added 217,000 new jobs, after similar job growth in the previous three months, although unemployment in May remained flat at 6.3%. Inflation has also been picking up, with the consumer-price index rising 0.4% on the month in May.
In the first quarter, the U.S. economy grew just 1%. This recently caused the International Monetary Fundto cut its growth outlook for the U.S. economy in 2014 to 2% from 2.8%.
Lew's comments came hours before the U.S. Federal Reserve is scheduled to issue an outlook on the economy as well as comments on monetary policy.
Lew spoke along with Israeli finance minister Yair Lapid at an annual meeting of Israeli and American economists and policy makers.
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Gold Falls on Strong Dollar
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Gold for August delivery, the most actively traded contract, was recently down 0.7% at $1,178.10 a troy ounce on the Comex division of the New York Mercantile Exchange.
The dollar rebounded after several days of declines Thursday, as U.S. economic data showed retail sales in May increased in line with expectations. A stronger dollar tends to dent prices for gold, which is denominated in dollars and becomes more expensive for foreign buyers when the buck rises.
The Wall Street Journal Dollar Index, which gauges the dollar against 16 currencies, was recently up 0.5% to 86.50.
“Gold is being pushed around by a stronger dollar,” said Frank Lesh, a broker at Futurepath Trading.
In the longer term, “there is not much interest in gold at the moment. It just hasn’t been a very good performer, and other assets have been more rewarding,” Mr. Lesh said.
Expectations of rising interest rates have weighed on gold in recent months. Prices are down more than 4% from May highs, while assets in the world’s biggest gold exchange-traded fund, the SPDR Gold Trust, have dwindled to 704.22 metric tons, their lowest level since September 2008.
“As long as ETF outflows continue, the gold price is unlikely to make any significant gains,” analysts at Commerzbank said in a note.
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