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| IMF cuts US growth forecast as it urges minimum wage hike | IMF cuts US growth forecast as it urges minimum wage hike |
| (35 minutes later) | |
| The International Monetary Fund (IMF) has slashed its US growth forecast, urged policy makers to keep interest rates low and raise the minimum wage to strengthen its recovery. | The International Monetary Fund (IMF) has slashed its US growth forecast, urged policy makers to keep interest rates low and raise the minimum wage to strengthen its recovery. |
| The crisis lender said it expects 2% growth this year, down from its April forecast of 2.8%, after a "harsh winter" led to a weak first quarter. | |
| However it expects 3% growth in 2015. | However it expects 3% growth in 2015. |
| It also said the US should increase its minimum wage to help address its 15% poverty rate. | It also said the US should increase its minimum wage to help address its 15% poverty rate. |
| "Given its current low level (compared both to US history and international standards), the minimum wage should be increased," the IMF said in its annual assessment of the US economy. | |
| It said a hike in the minimum wage would raise incomes for "millions of working poor" and help to create "a meaningful increase" in after-tax earnings for the nation's poorest households. | |
| The IMF said it only expected the economy to reach full employment by the end of 2017, with "muted" inflation pressures. | The IMF said it only expected the economy to reach full employment by the end of 2017, with "muted" inflation pressures. |
| It said this meant interest rates could stay low for longer than the mid-2015 date, when a rise is expected by markets. | It said this meant interest rates could stay low for longer than the mid-2015 date, when a rise is expected by markets. |
| "Labor markets are weaker than is implied by the headline unemployment number," the IMF said, saying long-term unemployment remained high and wages were stagnant. | "Labor markets are weaker than is implied by the headline unemployment number," the IMF said, saying long-term unemployment remained high and wages were stagnant. |
| "With better growth prospects, the US should see steady progress in job creation. However, headline unemployment is expected to decline only slowly," it added. | "With better growth prospects, the US should see steady progress in job creation. However, headline unemployment is expected to decline only slowly," it added. |