Still, the IMF forecasts economic growth of just 1.9 percent this year, the same as its April forecast. That would be down from 2.2 percent in 2012. And it's below many private economists' expectations that the U.S. economy will grow more than 2 percent this year.
Higher food and gas costs push up U.S. wholesale prices
WASHINGTON (AP) — A rise in food and gas costs drove a measure of wholesale prices up sharply in May. But outside those volatile categories, inflation was mild.
The Labor Department said that the producer price index rose 0.5 percent in May from April. Gas prices rose 1.5 percent last month, and food costs increased 0.6 percent. The increase last month followed a 0.7 percent decline in April and a 0.6 percent drop in March, both of which were driven by steep declines in gas prices.
Core prices, which exclude the food and energy, rose just 0.1 percent in May. That matches the April increase. The index measures price changes before they reach the consumer.
U.S. factory output up just 0.1 pct., signals more weakness.
WASHINGTON (AP) — U.S. factories barely increased their output in May after two months of declines, a sign that manufacturing is providing little support for the economy.
The Federal Reserve said that factory production rose just 0.1 percent in May from April. Output fell 0.4 percent in April and 0.3 percent in March.
Factories produced more autos, computers and wood products last month, offsetting declines in the production of furniture and primary metals. Manufacturing output has risen just 1.7 percent in the past 12 months.
Foreign holdings of U.S. Treasury debt drop in April
WASHINGTON (AP) — Foreign demand for U.S. Treasury securities fell in April for the first time in more than a year, as China and Japan both trimmed their holdings.
The Treasury Department said that total foreign holdings dropped 1.2 percent in April from March to $5.67 trillion.
China, the largest foreign buyer of Treasury debt, reduced its holdings 0.4 percent to $1.26 trillion. Japan, the second-largest buyer, cut its holdings 1.2 percent to $1.1 trillion.
Even with the reductions, Treasury debt held by foreigners is up 8.6 percent from a year ago. The gain shows overseas investors are still buying U.S. debt, despite sharp debates in Congress over reducing federal deficits.
U.S. current account deficit widens in first quarter
WASHINGTON (AP) — The U.S. current account trade deficit widened from January through March as Americans earned less from overseas investments.
The Commerce Department says the deficit increased 3.7 percent in the first quarter to $106.1 billion. That's up a revised $102.3 billion in the fourth quarter of 2012.
The current account is the broadest measure of trade. It tracks not only the sale of goods and services but also investment flows and how much the U.S. must borrow from foreigners. The first-quarter deficit was equal to 2.7 percent of the total economy, up from 2.6 percent in the previous quarter.
For the first quarter, the deficit in goods fell $3.3 billion. The surplus in services, such as airline travel, increased $454 million. And Americans' surplus in their overseas investments fell $5 billion.
By The Associated Press=
The Dow Jones industrial average lost 105.9 points, or 0.7 percent, to 15,070.18. The S&P 500 index fell 9.63, or 0.6 percent, to 1,626.73. The Nasdaq composite fell 21.81, or 0.6 percent, to 3,423.56.
Benchmark oil for July delivery rose $1.16 to close at $97.85 a barrel on the New York Mercantile Exchange.
Natural gas fell 8 cents to finish at $3.73 per 1,000 cubic feet. Heating oil added 2 cents to end at $2.96 per gallon. Wholesale gasoline rose 4 cents to finish at $2.90 a gallon.
Brent crude, a benchmark for many international oil varieties, rose 98 cents to end at $105.93 a barrel on the ICE Futures exchange in London.